Less than 25% of my business income is passive.
That statement may surprise you, considering my working role in the world. Most of my work is one to one with awesome people who need guidance around what passive income streams could work for them, and creating a detailed strategy on how to put that into real-life action.
These awesome people are business owners; they know, like the back of their hand, what they do and who they do it for. They’re good at it and they love what they do. But the chances are, they’re a bit too busy and need some of that all-important time freedom that they promised themselves when they started their business in the first place.
So, because of the nature of what I do, people assume that my business should be earning through passive income streams more than active work. You’ve got to practice what you preach right? But to what extent?
For my business, there’s a skewed balance between the passive and active sides of my work. A fully passive business teaching about passive income? That isn’t the case. But there is an important rationale behind why, and in order to get to know and trust me, I think it’s really important to be transparent about my own business financials.
So, here are the really good reasons why passive income isn’t making up 90+% of my income…
Reason 1: Business owners rarely prioritise their own business and rarely take their own advice
As with most people in professions, I’m too involved in my own business. And whilst I can look at anyone’s business and spot exactly where they can be making passive income, because that’s what I love doing, that’s where I put my time and that’s what I want to work on.
Therefore, when the times comes when I should sit down and work out marketing plans for my own passive products, I don’t – because I’d rather be working with clients, telling them how to do it. So they can go off, have a lovely passive life and give me their money, which they’re happy to pay, and the lovely testimonials, that they’re more than happy to write.
I Imagine if you’re a copywriter, your own web copy is probably bottom of the list. If you’re a designer, tiny branding tweaks you’ve been meaning to make (that no one else will notice but annoy the hell out of you!) won’t be a priority – your client work is.
Passive income isn’t just about the idea (here’s an idea, go off and make loads of money from it!) I also put in all the support to help with the strategy behind the decisions my clients make, the creation, refinement and development of the product.
It’s a bit of a misnomer in a way because your product is only passive when it’s been faultlessly designed and crafted. There is a lot of work that needs to go into a passive product before you start reaping the rewards. And that is where I love to work with my clients and not do it for myself!
Reason 2: Practicing what you preach – legitimately
As I mentioned in the intro, practicing what I preach in terms of helping my clients to generate passive income is important to me. It’s important for clients to understand that they’re not going to be millionaires overnight because of the work we do together. It’s important for clients to know that from the outset; your business will benefit exponentially from a passive income stream, but it doesn’t have to take over or outweigh what you already do.
I teach my clients to create passive income aimed at the ‘periphery’ customers of their business, not to replace their active work with existing clients. The two are not the same, and creating a divide here allows my clients to reach new customers, as well as serving the existing ones in a way that is already working.
I do exactly the same thing in my own business. My passive products are designed for one ‘avatar’ type (in marketing terms) and my active work is designed for another. And it works.
Reason 3: One size doesn’t always fit all
Most passive (read, digital products) can provide a framework, a how-to guide or a more general learning environment for the customer. It takes a customer from point A to point B without a scenic stop off at point C or an essential refuel at point D.
90% of your customers will benefit from that A to B trip, but some may have really needed the drive thru at point C to make sure they made it to the end. A passive product cannot do that in a completely tailored way. They can’t provide a bespoke and tailored approach to specific businesses, people, personalities or circumstances.
In a nutshell, generic stuff doesn’t work for everyone and can only ever go so far from a teaching perspective. Because this is what I preach, it would be crackers for me to go against that and treat all of my clients in the same way, assuming all of their circumstances are the same. That is what I’d be doing if I only sold passive products in my business.
On the positive side of passive products, you can absolutely nail down the principals of something, a template or outline, and maybe even the how-to from a digital course, download or similar product. You can gain A LOT from the productisation of someone’s brain. But, on the other side, speaking with a person about your specific circumstances will always give you greater results as a customer than more general advice you might get from a course, for example.
One size doesn’t fit all, so the personal touch is often the difference between success and disappointment when commencing a passive project.
I don’t believe that the solution, therefore, is in a one-size-fits-all bottle. I believe in diversifying the way and the medium in which we teach or present important information so there is a methodology suitable for everyone.
Much as the school system is still insisting on teaching everyone in the same way (teaching fish to climb trees in some cases), passive products can only teach a certain type of person up to a certain point. It cannot and will not work for everyone, and therefore it would be wrong of me to only offer passive products in my business that don’t allow for my customers to have tailored solutions if they need them.
Variety is the spice of life, and to truly have positive impact from your business, you need to have range in your offers that enables inclusivity in delivery method and cost. This is the one piece of advice I give out that I do take myself, so my offers range in both price and medium of delivery, to give the best possible experience to my clients, whatever their circumstances.
Reason 4: I don’t believe in showing you ‘look what I did’… you can do the same.
I don’t subscribe to flashing screen shots of Stripe accounts, six figure bullshit or to those people charging thousands with the claim of THE SINGLE SOLUTION to a seven figure client base. It’s all damaging nonsense, and quite frankly, gag-inducing.
I appreciate those people out there who are creating passive empires, and I truly believe it is possible to leverage your existing stuff, and bottle your brain to maximise your impact AS AN ADDITION to what you already do as a service or product provider.
But, I believe that should be tailored to the business and personality of the client, therefore my business model will look different to client A, and client B will be different again. It would be wrong of me, in that case, to instil a sense of comparison-itus by flashing my own passive success under the noses of my clients – after all, I’m selling something different to them aren’t I?
Additionally, I really love what I do (like I’ve said) so would never want to scale to a point where I can’t have one to one interaction with my customers and make sure they achieve maximum results from their time with me. My business gives me flexibility and freedom with the balance I have, and that balance is a personal choice for each of us.
Reason 5: Most of us aren’t as motivated as we think we are
Big sweeping statement there, I get it. But I know many business owners out there will resonate with what I’m about to say.
Unless there’s a deadline on the clock or a cheque waiting to clear, our motivation can be fleeting. We (me included!) often need accountability and structure to make things happen that aren’t going to provide us with immediate gratification or at least something celebratory on the horizon.
We need a reason ‘why’ and a motivator to run towards (or a scary thing to run from!) in order to take action. Because of that, humans in general often wait until our backs are against the wall before we take action – pivoting to accommodate a global pandemic, as a wild example!
In my line of work, clients come to me for unabashed clarity. They arrive with either a) a head full of ideas or b) a desire, but no clues. My job is to untangle the mess and provide a structured, achievable and sensible approach to the project at hand. I regularly save people time, effort and money through that strategy, as well as giving them ideas they may not have considered themselves.
And often, my job is to kick people up the bum and hold them accountable to see it through. Without me, those inklings would probably remain just another item on the dusty list of ‘nice to have’s’ and ideas for later that you’ll never get around to.
So, in summary, I guess what I’m saying is that ‘selling an outcome you’ve achieved for yourself’ isn’t always the right thing to do in business, because everyone is different and needs something different. Especially when it comes to passive income. It is my humble belief that clients should always come first, and a good businessperson designs their business around said customer. And that, my dear reader, is what I’m doing.
So, if you’re considering a passive project of your own, then know it will take work and it will take some unravelling of complex ideas and priorities. You will have to make decisions that you’ve never made before and plan things outside of your usual comfort zone.
There is no doubt that having someone to hold your hand through that process will help you exponentially, and that’s what I can do for you. It’s completely up to you if you want to make more passive income than I do, but I do strongly suggest you start making it from at least a small part of your earnings.
Want to know about the many ways in which you CAN do this with your business? It all starts with a (completely free) Creative Cuppa!