Have you heard the claim that many millionaires have as many as seven different sources of income, or, in some cases even more!?
Of course, this translates into seven distinct possibilities for them to make money each month. Take a look at your circumstances now; how many different sources of revenue do you have?
Do you have that many? Would you like to earn more? How about passive income?
If you answered yes to any of the above, then maybe it’s time to unleash the creative side of your brain and generate additional sources of money. As I alluded to above, passive income products are one such alternative.
“Passive income” is a bit of a misnomer in this context. Work is still required when developing items or establishing other sources of income. However, the difference is that these sources of income can continue to work for you for years to come, almost entirely on their own.
Advantages of Having a Passive Income
The first big advantage of passive income is that once a stream has been built up it will increase the amount of money that goes into your bottom line almost without an additional effort on your behalf. This is the most obvious benefit, but it’s still worth mentioning because who doesn’t want to make more money than they already do?
Consider passive income vs a more traditional way to earn money such as for example, one-to-one coaching. Restricting your efforts to one-on-one coaching might be a “feast or famine” situation whereas the ability to generate passive income streams can assist you in getting through difficult times.
However, even during “feast” periods, your income from 1:1 coaching is limited by your ability to handle the number of clients you have. Passive income streams can assist by removing the “income ceiling” and establishing a financial cushion.
Reclaim some of your time in the day.
Wait a minute… As I said earlier, developing products and other sources of money takes time. But, stay with me for a moment and consider the back end of the process, after your income stream is totally established and all of the upfront work has been completed. You can easily earn money from these passive income streams even while you sleep if you have a solid marketing strategy in place. You will be able to leave work a little sooner or take a whole day off for personal reasons because your “passive” items will continue to generate income.
Helping more people will increase your credibility.
Consider passive income as a means to share your knowledge with a growing number of people who are interested in your field. Take the image of a snowball at the summit of a mountain, which represents you and your inner circle of coaching customers. As the snowball rolls downhill, it gathers more and more snow, eventually growing to be enormous in proportion. The same can be said for you. In order to reach more and more people while providing advice through your books, webinars, or courses, you must gain greater exposure and word of mouth in order to leverage your knowledge and exhibit your skills to a larger number of people.
All of this can lead to greater sales as well as an army of people that are enthusiastic about your work. As a result, the snowball effect is a really beneficial thing (at least in this instance).
Making a Plan for Your Passive Income
Now that I’ve hopefully persuaded you of the benefits of having passive income streams in your business, it’s time to figure out what those streams should look like. Affiliate marketing, membership subscriptions, and authoring a book are all good examples of passive sources of income. Although creating courses or digital products based on your coaching specialty is quite time-consuming and difficult, it is by far the most popular and engaging (not to mention the most profitable) option.
You can use digital products to help other people solve their difficulties from the comfort of their own homes. And, your consumers receive answers to their specific issues relatively immediately, and in a format that is convenient for them—whether it’s on their own computer or smartphone.
“The income potential of a great digital product is virtually limitless, and there are dozens of examples of successful digital marketers earning millions of dollars each year from products they launched several years ago,” says the author. – C.M. Burns, BigHappyProfits.com Founder and CEO
Consider what your career and personal life could be like if you had your own online course, for example…
- Students who are enthusiastic about learning from you
- Working fewer hours while making a greater impact on more lives (and without exhausting yourself with 1:1 clients)
- Establish your credibility and establish yourself as an authority in your field.
- There will be no more income restrictions.
Creating an online course will ultimately give you the opportunity to build a significant business asset that you can publish and sell time and time again.
Developing Your Own Product
There are many, sometimes complex, processes required when making a product, but after you’ve completed one, it will be much easier to build others.
Making a digital product that is relevant to your primary area of interest should be your first priority. So, if you are a health coach, you want to make sure that your product relates to a health issue rather than a professional one.
Additionally, you may want to refine it even further by asking your target audience what their issues and requirements are. This is something you can quickly find out by conducting small surveys or simply keeping note of the questions they frequently ask in online forums such as Quora or Redditt.
Following that, you must validate the product, making sure it is the correct one by checking it twice.
Ask potential clients about whether it would be beneficial and/or relevant. Post questions about it in discussion forums. You can even conduct a pre-launch with a select group of clients to ensure that the product meets their expectations. I have a colleague to whom I provide my products in exchange for her honest opinion on them, and she is really grateful (and I get some great feedback!).
After that, you’ll need to actually develop the material for your product’s debut and promotion, and then you’ll need to figure out how much to charge for it.
Taking Your Product to Market
When releasing a new product, you should develop a compelling series of anticipation emails as well as a number of launch emails to get the ball rolling.
1) Emails aimed at building anticipation help to generate excitement and create a buzz around your product launch. In order for them to be effective, you should be educating your audience on a subject that you are enthusiastic about (and that is linked to the course you are selling). Additionally, provide them with a teaser about the goods.
2) Send out emails announcing the deal. These emails, as the name suggests, announce that the product is complete and direct customers to a location where they can purchase it.
The following is how one marketer explains it:
“With my launches, I built up excitement over a period of weeks rather than months or years, as other competitors do. Every time I bring it up, the potential purchasers become more and more enthused about it. After that, I provide a specific date for when the product will be launched and made available for purchase on the market.
“A thorough email is sent out to my subscribers the day before the launch, providing them with all of the information they need in order to make a purchase. This email discusses the advantages of the product, pricing information, and even answers to commonly asked questions (that haven’t been asked yet but will be in the future).
“The only thing that is missing from the email is a link to the product’s purchase page. As an alternative, I inform them of the exact time the product will be released (8:00 a.m. Eastern tomorrow) and that they should expect an email from me at that time.” – Nathan Barry, Founder and CEO of ConvertKit, Inc.
If your launch is scheduled to last five days, you will require at least five emails. I’ve been on certain mailing lists where they sent out two emails a day, often the same email with various subject lines, and it was annoying. That seems excessive to me, but it all depends on your target demographic and how often you want to email them. Please keep in mind that they most likely do not read all of your emails. So it’s not a bad idea to send out many messages.
Creating a Sense of Urgency
Here are four simple strategies to persuade customers who are on the fence to make a buy right away:
- Have a special or promotional pricing offer that will expire soon.
- Make the product available for purchase for a short period of time only.
- Offer an additional incentive that is only available to the first x number of people who purchase the product.
- Set a limit on the number of items that can be purchased.
Choose one or two of these tactics that you believe will resonate with your target market. The sense of urgency in your launch emails can help you increase sales if you plan ahead of time.
Working with clients one-on-one is a wonderful experience, but it should not be the primary focus of your business. Aside from your coaching program, you must have additional sources of money to augment your income. After all, how many times have you gone through a month without gaining any new customers? That predicament is less painful if you have a second source of income to fall back on.
If people haven’t met you yet, it’s unlikely that they will spend $1000 on a coaching program. For something that costs them $50 or less, however, they may be ready to take a chance on you due to the low risk involved for them in dealing with you.
The good news is that you CAN generate passive income from low-cost digital items, and if you need assistance, you can turn to experts.