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Importance of Passive Income for your Business

Regardless of the type of business you run, having a passive income should be high up on your list of goals. Earning money while you eat, sleep and play sounds like something from a fairy-tale, but it certainly is achievable.

Here at MBP, we’re constantly looking for ways to help our clients achieve their business and financial goals. We find that by spending time now to set up a passive income source can provide significant future benefits. So, we’re discussing the benefits of doing so and making some suggestions for ideas you could try or adapt to develop a passive income for your business.

Benefits of Creating a Passive Income for Your Business

Being able to earn money even when you are not working is what many of us strive to achieve. With time being finite and what little we have being split between work and personal commitments; a regular income not dependent on your actions is essential.

The benefits of spending time and effort in setting up a passive income stream for your business include:

  • Less financial stress – you know that you have more than one way to bring in an income. This leads to lower stress levels when one avenue starts slowing down.
  • Promotes freedom – we’re not saying you can run away from your business, but rather that you may be able to give it less of your time and attention. This frees you up to do more of the things you want to do – a bit like outsourcing.
  • Jump of income potential – the sky may be the limit when it comes to the amount of income your business could achieve. If you don’t need to do a lot to bring in the cash for one thing, then you can work on other avenues and ways of increasing your income.
  • More opportunities – the extra income your business generates provides you with additional opportunities to grow and promote your business.

You will need to do some research into ventures you could use to develop this income stream. We’ll give you some ideas which you may wish to investigate next.

Passive Income Ideas for NZ Businesses

It’s always better to have income coming in from multiple streams. Should the economy crash, a product sells out or a natural disaster occur, if you only have one income stream, your business could be under significant financial hardship. That’s where developing and trialling different passive income ideas comes into play, such as:

  • Writing and selling eBooks or guides – is there a burning question or topic your audience is always wanting to learn more about? Creating the ultimate guide and then selling it via your website or through online eBook resellers is an option. An eBook doesn’t need to be hundreds of pages long to be successful. Also, if writing isn’t your thing, you could even pay a ghost writer to do the job for you.
  • Monetising your YouTube channel – if you’ve got some great skills in the video department, grow your business’ YouTube channel. Once you have a significant number of followers, you can use it to start to bring in an advertising revenue. Start by applying to YouTube, and if you meet their criteria, they will start placing advertisements before, during and after videos on your channel.
  • Create an online course – you know enough to be considered knowledgeable or even an expert in your industry. Why not teach others what you know so they can benefit from it too and charge them for doing so? You could either sell the course through your own website or use one of the many online course resellers (who will take care of the marketing and hosting for you – at a price).
  • Affiliate marketing – as an affiliate marketer, you recommend online products or services to your audience. When they take up your suggestions, you receive a commission from the original seller. This is done by applying to the seller to become their affiliate. You are then given a piece of code that needs to be positioned within your website or a specific link to share. The seller’s software tracks the use and conversion rates of the links and will know when you have directly resulted in a sale for them. This is then paid to your bank account. It is good manners to tell those who may click on these links that it is an affiliate link you will benefit from.
  • Build a sales funnel – ah, the old sales funnel strikes again. But if you have got a process going to move your audience from your social media feed or Google search, build a relationship with them and eventually get them to buy something from you, this is the ultimate in passive income generators. Often a pre-written newsletter series is used to do this, as is retargeted marketing. A sales funnel usually requires that you obtain the prospect’s email address so you can follow up with them too.
  • Create an app – if your skills lie in the technology world, create an app and then on-sell it. Obviously, it would be useful to be related to your industry, as then you could market it to your existing and future followers. An app could be sold via your own website, but also through app resellers, which would help you reach a wider audience.
  • Investments – we wouldn’t be bean counters if we didn’t recommend investing, now would we? While the returns for most businesses won’t blow your socks off, interest is a genuine form of income. We suggest chatting with a financial advisor, and we can point you in the right direction if you don’t already have one.
  • Monetise your blog – if you have a blog which has high levels of traffic or are prepared to put in the efforts to achieve one, you could monetise your blog. This would involve either selling ad spaces in text and image formats on individual pages. You could even sell sponsored blogs, where you create content specifically targeted at achieving the aims of your sponsor, and then publish it on your website.

Obviously not all these ideas will work for your business, either financially, time or industry wise. That’s where using the services of a business advisor can help. Our business development services can assist you with the planning required to establish successful income streams within your business. We’ll make sure that your ideas fit within your core values and help you to identify if they have a solid chance of being successful.

Make today the day you start growing your income streams. Get in touch with our team of business advisors and let’s make a time to chat about developing passive income opportunities for your business.

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