Should you add a passive income stream to your business? Let’s talk!

Jun 23

Hey there and welcome to another episode of the Simplify Your Sales podcast!

Today I wanted to talk about passive income– because while I love my baby headband business and all the many opportunities it has given me– I mean, I wouldn’t be speaking to you today on this podcast without it– over the past couple of years, passive income has become SUCH an integral part in not only MY business model, but also an integral part of how I see my business evolving even more in the future– teaching women-and the few men that follow along– how to earn the financial freedom that they are 100% capable of.

But as I’ve been talking more and more about this in my emails and the Facebook group, I’m seeing A LOT of people that LOVE the “idea” of passive income, but don’t see it working for THEIR business in THEIR lives.

And today I wanted to talk a little bit about maybe why you’re feeling that way and help you realize that yes, if you WANT to add a passive income stream to your business, it’s totally possible. Even if you’re a busy mom juggling a million kids. Or working a 9-5. Or a full-time student. Or just have LIFE obligations that keep you busy and a Netflix habit that you’re not sure you are ready to ditch.

What is passive income:

But before we can dive into all of that, I want to take a couple steps back and talk about what passive income actually is so that we’re on the same page here and you aren’t thinking something completely different than what I am thinking.

And this isn’t some random text-book definition of it or anything– but what I view passive income as. So passive income, to me, is income that you earn in your business on a regular, consistent basis that requires very minimal effort to maintain it.

Okay, so maybe that sounded a little text-booky. But basically, it’s the idea that you have a product– some type of digital product– that you do not have to be actively involved in the order fulfillment of to make money.

So you create a digital product ONCE (be it a digital printable, ebook, online course, WHATEVER), and then sell it over and over again. You’re not having to create a new product every time one sells– you can sell it ONE time or ONE HUNDRED times and it’s still going to be the same amount of work.

And that’s just not something you can get with physical products if you’re hand-making each and every one and shipping them out.

4 reasons why passive income is awesome

Okay, so that’s what passive income is, but why should YOU consider it? What’s in it for you?

And I know just how much of a hangup this is for people– the idea of adding ANOTHER thing to your plate–even considering adding another thing to your plate– can be EXHAUSTING.

But there’s a reason why SO many people have jumped on the passive income bandwagon:

BENEFIT #1: NOT HAVING TO TRADE TIME FOR MONEY.

I used to offer one-on-one coaching sessions. And while I still take on the occasional client, back when I was coaching, if I wanted to earn any money from it, I had to dedicate 1 hour of my time to being on a call, and then another 1-2 hours typing up notes and sending them an action plan because I’m an overachiever like that. So about 2-3 hours per client.

If I wanted to earn more money, I had to take on more clients. That was 100% the way things worked. Yes, I could raise my prices (and I did), but there comes a point when you can’t realistically raise your prices any more.

Okay, and the same goes with my Etsy shop. Every time I wanted to make MORE money, I had to sell and create MORE headband sets. I remember going on vacation to Disneyland one year because hello, Disney family, and selling over 150 sets of headbands in the 5 days we were gone. And it felt INCREDIBLE. We essentially paid for our vacation while we were on vacation.

But then the reality hit when we got home– and I realized I now had to complete 150 orders of headbands. And yes, I had a couple people helping me with orders, but it was still 150 headband sets that I had to fulfill in order to “earn” that money.

Now, I’m not saying this to be ungrateful in any way– I am SO thankful for those orders and the financial blessings that running LittleHighbury had for my family.

But it is HARD coming home from a vacation (or any degree of time off) and suddenly working until 2 am in the morning trying to fulfill orders as quickly as possible for the next week (while still fulfilling orders that were coming in daily).

Passive income changed the game for me in this respect.

When I created my first major digital product– Mastermind Your Marketing— and I sold 70 spots the first time I introduced it to my audience, I realized that whether I had sold 1 or 7 or 70, the amount of work was the same– and it had (mostly) already been completed. Now, I added in a few coaching calls for that first group and obviously that isn’t 100% passive, but the delivery of the program? 100% automatic.

And that’s a HUGE reasons why I’ve been able to grow my revenue with each and every time that I open the doors to enroll– because I’m not having to create a brand-new product from scratch– I’m able to focus 100% of my efforts on marketing and sharing the program.

And then on a less business-y note, not having to trade time for money also meant that I could spend MORE time with my daughter and husband. We could take off for a week up to Idaho without having to haul all of my sewing and packaging materials and trying to find where the closest post office was.

BENEFIT #2: YOU CAN TAKE TIME OFF AND STILL EARN MONEY

And that leads into my NEXT benefit for passive income– you can take time off (yep, a full on VACATION) and still “earn” money. And no, that’s not sleazy or unethical– that’s SMART business.

Now I don’t know about you, but I was always fully-blown SCARED to put my physical product shop in vacation mode. I was worried it would mess with my placement in the search algorithm and it would be hard to bounce back from and I’d never recover. Even though I had a marketing system in place, it’s just not a good thing to lose your placement in Etsy search if you can help it. So I would leave my shop open even if we took a family vacation.

Which, as I just shared above, left me with A LOT of orders I had to fulfill when we got back and made me basically a miserable human being to be around for the week after vacations.

The same was with weekends– if I didn’t work Saturday nights– like if we had friends over for dinner and games or something because we are BIG board game people– I was snippy and anxious the rest of the weekend.

PASSIVE INCOME ALLOWS YOU TO TAKE TIME OFF– VACATIONS, THE WEEKEND, WHENEVER IT IS– AND STILL EARN MONEY.

This has ALSO been incredibly important as I deal with challenges in my mental health. I’m pretty open about my struggles with postpartum depression and anxiety– in fact, I go into great depth about it all in episode 5 of this podcast if you want to learn more about that– but essentially that means that I’m not at my best everyday. I’ve gotten better at finding ways to work with it, but some days I still just can’t show up for my business. Passive income allows me to still run my business even on the days when I am not emotionally or mentally able to be present.

And this is a HUGE deal because it means I can take time for myself– time to HEAL and recharge and rest and then come back better than ever.

So yes, having a business that allows me to take time off when I need it? GAME CHANGER.

BENEFIT #3: PASSIVE INCOME IS EASILY SCALABLE

So scalability refers to the idea that you can grow your income bigger and bigger and bigger without maxing out your capacity to earn it– even as a team of ONE (which I definitely started my passive income journey as!)

So, for example, with a physical product shop, if you sell more, you have to do more, right? We’ve been talking about that this whole time, haha.

Which means if you want to SCALE your shop– and build it even bigger– you have to do even more– spend more time, make more product. Or hire people to help you, which can take a MAJOR cut out of your revenue.

But with digital products and passive income– I sold them 100% on my own as a one-woman show with a full-time working husband and a little girl for over 1 ½ years before I finally brought on a VERY part-time assistant to help.

And during that time that it was *just* me, I ran a multi-six figure business. 100% by myself. And yes, I saw my family on a regular basis. I’ll be honest– I’ve never been very good at working a typical 8 hour day, so I actually would work for 1-2 hours/day while my daughter napped, and then 2-3 hours in the evening, which is actually kind of my genius working time– I do really well at nights for whatever reason, so I chose to embrace that, haha.

I’m here to tell you that that is just NOT possible with physical products. I had to bring on help MUCH sooner, work MUCH longer hours, and never get the time to enjoy a weekend or a holiday because those were when I was slammed with products to create. I was so busy trying to fulfill orders that I didn’t actually have TIME to think about scaling my business– I was just trying to keep up.

AND FINALLY, BENEFIT #4: PASSIVE INCOME ALLOWS YOU TO MAKE A GREATER IMPACT.

I don’t know about you, but I am at my best self when I am NOT overly stressed with my business. I love running a business (or I obviously would have given up YEARS ago!), but I don’t love it when my business runs me.

Because believe it or not, I *do* have other interests. For example, I minored in culinary arts in college. I absolutely LOVE to bake and take desserts to people. And dinner. And basically just take food to people when they need it. That’s my jam. I love it. And having a passive income business model allows me to have the time to do that– to really get to know my community and connect with them in a way that I can’t if I’m stuck in my studio all day, everyday, frantically filling orders.

On the online side of things, passive income allows you to have a greater impact because you can reach more people with the same amount of work. Not the same work– it’s a different business model, obviously– but you’re not increasing your workload by reaching more and more people. Because remember– you create a product ONCE and it’s the same amount of work whether you sell it to 1 person to 5 to 50 to 500– you don’t have to do any additional work!

Now if you’re ready to get started with passive income but not sure how to plan things out, make sure you download the awesome free resource I’ve got over in the show notes for this episode– it’s the Passive Income Planning workbook and it’s the perfect first step to getting started designing the perfect passive income product for YOUR unique skill set + audience!

Alright, thanks for joining me for another episode of the Simplify Your Sales podcast. If you found this episode helpful, I’d love it if you’d head over to iTunes and give it a review to let others know– this helps more people see the awesome resources on this podcast and use them for themselves!

See you next time, same time, same place, here on the Simplify our Sales podcast.

Morgan Nield