Alex Okell

Is passive income really possible?

When we think of passive income, I think alarm bells start going off. We start thinking scams! Bro marketing! Bullshit! And I hear you. We’ve all seen those YouTube and Facebook ads of someone on a beach with a laptop saying that they work 1 hour a month and can afford Lamborghinis.

And I call BS on that, it’s 2023’s snake oil. But there is such a thing as semi-passive revenue streams. And I truly believe that every business’s revenue should be split across semi-passive and active revenue streams. Because having diverse revenue streams is what makes a business sustainable. Let’s talk more about whether passive income is really possible.

This is a transcript of episode 2 of the By Invitation Only Podcast. Listen to the full episode here.

Active vs. Passive Revenue

Active revenue streams are the services in your business that require an exchange of your time for money. This is usually seeing clients on a 1:1 or group basis for calls or sessions.

Semi-passive revenue streams are products or services that you create once and can then be sold again and again, on an unlimited basis. This would be PDF downloads, books, eBooks, self-paced courses, paid private podcast feeds, webinars, memberships, masterclasses and affiliate marketing…any form of make-once, sell a limitless amount.

If you only have active revenue streams in your business then, to grow and scale you have two options: increase your prices or grow your team. And these both can be great ways to expand your business and grow your revenue.

But there is a cap on how high you can put up your prices. I know not everyone is going to like that idea, with this concept of abundance and charging your worth but let’s be realistic – if you are someone who gives a shit about your clients you aren’t going to want to increase your prices endlessly and price yourself out of the market.

You can grow a team, but not everyone wants to manage a team. Or maybe you have a team already but still want to grow your impact and reach more people who may not be in a position to have 1:1 or group coaching, for example.

Why do we want to include passive or semi-passive income in our business?

And we should talk about why you would want to grow your business and why you want to scale using passive or semi-passive income. Well, most people start their own businesses to have more time to do the things they love. This might be travelling, spending more time with their families or just having a flexible schedule away from the corporate world.

But so often we create business plans or business models that mean we are stuck doing 1:1 calls all day, and we enjoy the work we are doing but we quickly lose that.

I know the people who I attract into my world are helpers. We want to support people. We want to create radical change in our industry. We want to shake things up and change the narrative. But instead, we get burnout, overbooked and resent the clients we have seen – trust me, I have been there.

We need to make a business that also prioritises our own well-being, allowing us to be the best coaches, experts or educators we can be. Rather than giving everything to our clients and leaving nothing for us, our business or our families and friends.

So this is where our semi-passive income streams come in. A lot of people would call them passive income streams but like I said earlier, no revenue stream is truly passive.

Semi-passive income: affiliate marketing

Affiliate marketing is the closest thing to passive income I know. And that’s because someone else is creating the service or product for you. If you don’t know what affiliate marketing is, it is the process of recommending products or services to your community, audience or clients and receiving a small commission if they choose to purchase.

So rather than doing the marketing and creating the product, you’re just doing the marketing. And that can look like an email campaign, creating affiliate blog posts, building resources pages on your website that you drive people to… and SO many more ways to market an affiliate product or service.

For more tips and tricks for getting started with affiliate marketing, unlock my free beginner’s masterclass on affiliate marketing.

Semi-passive income: digital products

Other passive income streams we can dive into include diversifying your product suite with things like digital products. This can truly be anything from PDF handouts, eBooks, self-paced courses, masterclasses, webinars and memberships. It’s the switch from 1:1 to 1:more. I know that a lot of people think that 1:1 time is the most valuable way for someone to work with us. Or the way that someone is going to be able to achieve their goals in the shortest amount of time. But we forget that people are at different stages of their quote-un-quote journey, and require different levels of support and different resources.

And, not everyone can afford 1:1. So just sticking to a 1:1 or group call model, we aren’t reaching as many people as we can. Creating a diverse product eco-system that is well thought out and strategic doesn’t only expand your income and impact, but can also work to move people through the process of finding you and working with you more quickly. When someone finds us online, via our website or social media, it’s a big jump from finding you and enjoying the free content to paying for a £1000+ coaching package for example. It may take a lot of time, a lot of nurturing, showing up and warming people up to convert those people into clients.

Whereas if we have this diverse product eco-system, strategically curated to meet people where they are at with products and services they need, then they can get to know you, and your style of teaching, and maybe even move further along that journey so they can be at a place where it is actually time to work with you.

Why you need traffic or an audience to create semi-passive income

Whatever type of semi-passive revenue you want to build into your business, there is one thing that is true – you need traffic going to your site or an existing audience on social media or on your email list. So many marketers try to claim that anyone can start making passive income online and I truly call bullshit on that. To be able to sell digital products, grow a membership, sell affiliate products or services, you need interested, relevant and ready people to buy from you – that’s a fact.

You can’t produce things and just expect people to come to you. This is why diversifying your revenue streams works so well for people who are already established in business. You can create digital products and create a membership and sell affiliates from the start of your business but just know that it isn’t going to make up a significant portion of that revenue stream pie just let. You need to sell a lot of 1:more products and services compared to 1:1 services to make the same amount of revenue – this why it works so well for those who are already fully booked and busy.

Growing your audience via SEO, on social media, by guesting on podcasts or memberships, by networking is an essential not only one of the first steps, but a continuous thing you need to be doing in your business to really see growth.

Key takeaways: is passive income really possible?

So, is passive income possible? Well, as always, there is nuance. It is possible but in more of a semi-passive way and you need an audience to truly make passive-ish income. It doesn’t mean it’s easy, but it is so much more sustainable, scalable and secure way to run a business – giving you the ability to take off away from your business or continue to grow your bottom line without getting on more Zoom calls.

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