It's the ultimate dream; making money while doing next to nothing. So how can you leverage your expertise to create passive income?
Many people are starting their own business in a bid to free themselves from traditional employment and even make more money. Indeed, there’s never been a better time to take that daydream or idle shower thought and turn it into a legit income stream.
However, many business owners end up right back where they started: After all, when you’re billing by the project more work = more money. So many end up overworked, struggling to grow revenue beyond covering day-to-day costs and feeling like they can’t step away from their desk without losing money. And ultimately may end up asking:
How can I build revenue without spending every moment in front of my computer?
The answer is simple: yes you can, with passive income. Simply put, expertise-driven passive income is about building products once to sell to multiple customers. When implemented successfully, you no longer trade time for dollars. Instead, you spend time creating products, attracting an audience and making sales.
It will take a lot of work to create an asset that creates ongoing demand. But the business owners that are willing to make the investment can reap huge rewards. Here’s how you can use the expertise you sell to clients to build a new, hands-off stream of income:
1. Identify Your Marketable Skills
The best passive income ideas develop from building on your existing skillset and teaching others how to enrich their lives through them. For example,
- A professional home organizer could create tutorials to help people outside their geographic area to organize their home
- A photographer could sell Lightroom presets to Instagrammers looking to up their game
- An interior designer could offer styling cheat-sheets or templates to clients who cannot afford full-fledge design services
The common thread here is that they’re all taking their core skill and relating it to a larger audience. It’s clear that that audience would not be in the market for their core service (you don’t want to cannibalize your own business). So, take a few moments and identify the skills that you’re selling to clients.
It’s these skills that will serve as the foundation of your product. A professional home organizer could sell a video course called, How to Completely Organize Every Room of Your Home in 60 Days or Less.
2. Understand the Types of Passive Income
There are several types of passive income, ranging from investing to renting out a room in your house. But for today’s article, I’m focused on using your expertise.
I want to talk about things that can directly impact your business, increase your authority and influence in the industry. And that’s where these passive income streams come into play:
- Write an eBook
- Create a Course
- Host Online Workshops
- License Music & Graphics
- Sell Stock Photos
- Promote Affiliate Products
- Display advertising (e.g. on YouTube videos)
When executed well, each of these income streams can build your brand and bring in additional revenue for your business each month.
3. Align Your Skills, Strengths and Audience
Residual income isn’t as simple as half-heartedly creating a product. To truly succeed, you’ll need to put in some effort at the beginning. And if you really want the best bang for your buck. So find the overlap between the skills you have, your personal strengths and what your audience needs.
For example, a freelance writer may not feel very comfortable on video. So, it wouldn’t make sense to create a video course. But she could very comfortably write an eBook about how to write great blog posts, or develop a written course, or even promote writing/editing software as an affiliate that would interest her target audience.
Just as with your main business, it’s essential to have a clear idea of who your audience is for your passive income product(s). Your audience could overlap with your existing client/customer, but with most passive income endeavours you can have greater reach and tap into a market with a lower price point.
Let’s go back to the home organization example:
If you run a business that helps people organize their homes, you have lots of authority on this topic. And – let’s face it – almost everybody could do with help organizing their homes at some point. But not everybody can afford to pay professionals to do the job. And indeed, some people simply don’t know where to start.
In this example, the audience for your How to Completely Organize Every Room of Your Home in 60 Days or Less video series could be people who don’t have the budget for professional organizers but are very motivated to organize their homes.
Presto! You’ve taken your skills, come up with an offering and honed in on your target audience. Now you’re ready to think about how you build this into a passive income stream.
4. Develop the Passive Income Stream
What many people don’t realize is that you need more than just the product. A truly remarkable stream will be supported by:
- Email sequences
- Marketing collateral
- Partnerships (especially for distribution)
- A well-crafted landing page
Let’s stay with the home organization example: You’ve mainly built an audience on Facebook, but you also have several email subscribers and Instagram followers. You’re comfortable on camera, so you decide to create a video course called How to Completely Organize Every Room of Your Home in 60 Days or Less. So you can just throw that up on YouTube and watch the dollars roll in, right? Wrong!
To be ready for a strong launch, you’ll need to:
- Produce the video series and make sure the content stands apart from similar videos
- Create a landing page with strong action-oriented copy
- Write an email promotion drip for subscribers
- Develop an engaging email autoresponder to follow-up and educate buyers on your cornerstone services
- Setup the product delivery method
- Design promotional images and videos to share across social media
- Reach out to industry partners and ask for their help to spread the word
And these are just the top-level points. A lot of people think passive means “easy”; it’s not and there’s a ton of work upfront. It’s important to note that if content is going to pay for itself over and over again, it has to be high quality so people vouch for it, share it and demand stays high. However, once you do this, you can sell the product over and over – meaning you’re no longer trading time for money.
5. Create an Optimized Marketing Funnel
Learning how to gain clients through marketing is a bit challenging. But with passive income, you can create an automated funnel that runs itself once you set it up.
Using a different example (a webinar, for example), here’s a funnel that you could use:
- Outline a webinar idea on a related topic to your product
- Use Facebook ads to promote the webinar
- Record your live webinar and include a pitch for your product at the end
- Direct leads to a sales landing page
- Use email marketing to deliver the product
I really like making sales with webinars. It’s like pitching to 20-100 potential clients all at once. And it’s not just someone like a marketing coach that can benefit.
Use your expertise to teach some simple tactics to entrepreneurs. And by adding that value, it’ll be easier to convince them to purchase your product. This same foundation can crossover into any type of service-based business.
Ready to Launch Your Passive Income Stream?
With each of these elements in place, you can create a profitable stream of income for your business. It’s just a matter of following these steps, making a highly valuable product, and promoting it to your audience in the right way.
Before you know it, money will come pouring in without any regular maintenance. And that’s the real beauty of using your expertise to create passive income.
Now, I’d like to hear from you… What is the name and type of product you plan to create? Share your feedback in the comments below.
This is an archived post from the FreshBooks Blog, which has been updated. This post was originally published in April 2016.
about the author
Chelsei Henderson is a content marketing consultant helping freelancers and entrepreneurs build successful companies in the digital world.