Owning your own business is a wonderful, exciting, and exhilarating experience. It can also be a simultaneously deflating, depressing, and financially challenging experience. You may have expected to be able to spend your days focusing on the skills you love using your innate talents. Instead you soon discovered that you spend the majority of your time running your business, rather than doing business.
This often means spending hours trying to manage cash flow and try to determine how youâ€™re going to make your nearly empty bank account stretch to cover your expenses. Now of course if youâ€™ve been in business for more than a few years youâ€™ve learned how to master cash flow and maximize your time so you do have more time to spend doing what you love. However, after a few years in business you may also be ready for more money and less work. The solution for the new business owner and the seasoned entrepreneur is to create a secondary income â€“ a passive income.
What is a Secondary Passive Income?
Quite literally, weâ€™re talking about generating another source of income. Ideally, this is passive income. This is money that is coming into your bank account on a fairly consistent basis. You can set it aside for financial emergencies or you can use it to boost your bank account. Your choice. Passive income is income that is earned without doing extra work.
One of the best examples of passive income is writing a book. You write the book. You create the systems to market and promote your book. Then you sit back and enjoy the royalties and profits from sales. The majority of your systems are automated which means that you donâ€™t spend much of your time, if any, thinking about your book. You can continue earning money from your book for years.
Passive Income Ideas and Business Models
There are two basic types of passive income models. They are the residual income model and the leveraged income model. The book example is a residual income example. It could be a residual income model if you were to employ affiliate to sell it for you. Youâ€™re earning income from the work they do to promote and sell your book. Other examples of passive income might include creating a membership site, a video series, a seminar that you record and sell.
Passive income doesnâ€™t need to be directly related to your business model. It can be something that is entirely separate. For example, a virtual assistant might decide to write a book about creating efficient systems for entrepreneurs or the VA could create a crafting video series and sell that. The idea of creating a secondary passive income is to make it easier on you to feel both financially comfortable running your business and more confident about being an entrepreneur.