How to Make Your Small Business Passive: 5 Steps To Freedom
Updated: May 24, 2022
Statistically, 90% of start-up businesses fail within ten years. Due in part to lack of funds, lack of marketing savvy, overwhelm, and burn-out to name a few. By building passive income strategies into your small business you can experience reduced stress, increased revenue, and ultimately lead yourself to a profitable financially stable retirement.
Discover the 5 steps to make your small business passive in this episode with host Lindsay Sutherland. Business consultant and evergreen marketing strategist.
Howdy Pie Tribe and welcome back to another episode - I’m your host Lindsay Sutherland, business consultant and marketing strategist serving small business owners and today we are talking about how to make your business passive.
Many small business owners profess that since starting their business they feel overwhelmed, over their head, overworked, and ultimately a loss of passion. In fact, here are some startling statistics from Investopedia.com…
In 2019, the failure rate of startups was around 90%. Research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year.
According to business owners, reasons for failure include money running out, being in the wrong market, a lack of research, bad partnerships, ineffective marketing, and not being an expert in the industry.
Ways to avoid failing include setting goals, accurate research, loving the work, and not quitting.
And I would add to that developing passive revenue strategies with effective evergreen marketing to create a stream of income that can relieve a lot of pressure and help make serving your customers a pleasure again.
“If this solution is so simple, what keeps business owners from walking the passive income path sooner?” You may be wondering.
The answer to that is simple too - either they haven’t considered it, or they have gotten so sucked into the demands of their business they lack time to focus on building passive revenue.
When I’m working with clients I often try to steer them to the passive income route as quickly as possible so they can always be thinking of the big picture. For example, my most recent client Alison. After leaving her job last year she decided to take a few months off. When we connected she was thinking of leaning on her years of business management experience to start a consulting business. Initially, I felt a twinge of angst in my gut because on one hand I didn’t want to derail her enthusiasm and motivation, but on the other end, I also knew that she could easily get herself stuck in the cycle of chasing clients and servicing them that feels like a never ending merry go round ride.
I was thinking 5 years ahead and because I know Alison well I could see that that road would be sufficient in the short term, but was not sustainable for the lifestyle she wanted to be living 3 to 5 years from now.
In our second session I voiced my thoughts and asked her if serving clients in 5 years sounded like something she wanted to be doing as her primary source of income.
The answer was a hard no and gratefully she was open to exploring other options.
What is even more awesome is how as her passive product unfolded it is so insync with her personally. She mentioned the other day how this business finally feels like her.
I was elated!
If you are in the beginning stages of your business, you likely have the time to start building out passive products a lot more easily than if you have been in business for a while.
To illustrate what I mean, let me share with you about another friend of mine who owns a digital agency. Even though he has an incredible team of people working for him, he is extremely busy and constantly feels the demands of work that is lined up, clients to serve, people to hire and manage, and all of the other aspects of running a thriving business.
I’m sharing this because it is easy to dup ourselves into thinking that “once we get to point x y or z we will have time.” “Once I hire enough people, once the economy settles down, once the ____,” fill in the blank with a thought you have had.
The point is, this once-this-then-that-scenario inevitably prolongs the problem causing ongoing frustration and burnout.
This is the reason I am so passionate about helping small business owners. Those of us that are doing the dance every day - immersed in that love-hate relationship with our business, demands, and schedules.
I want more small business owners to have a means to an end. And that my friends, is found in passive income.
Today I am giving you the road map - the treasure map if you will - with the exact recipe to follow to get your business in a place where you can love working on it (Key word ON it) and have time to walk away without carrying the many burdens weighing on your mind with you.
Step 0: Commit - Commit yourself to create this passive revenue stream no matter what - commit to seeing it through until it is successful - no exceptions. Just like Investopedia said in the list of ways to avoid failing - NOT QUITTING. I’ll be straight with you - developing passive income is not a get-rich-quick process. It requires ongoing commitment and it builds on itself. It’s something that, if done correctly, can ultimately lead to a financially secure retirement. Ok, so say it with me, “I am committed to creating a passive income stream in my business so I can live a happier stress-reduced life.” Great job! Nothing can happen until we commit, friends, so if you committed in your heart you already took a huge step forward.
And, I’m really glad you did because the next steps are a little trickier.
Step 1 - Dedicate Time - Oh man - I can hear your scoffs from here friends. I know this sounds easier said than done, but it is possible. It is possible to carve out 90 minutes a week to dedicate to this project. It is possible to make this a priority in your life. If you truly want change, this is crucial.
Like I said earlier, passive income development - specifically marketing- builds on itself. Starting and stopping, or being wishy-washy will not be effective. That I can promise you.
Here are some tips you can do to find this time.
Block off your schedule. Tell your team and your clients you are simply unavailable for the time you have allotted. Listen… if your kid was in a play, you would be there. If your mom was having surgery you would be there. If your best client needed you at the last minute for a big project, you would be there.
Listen, friends, It is time to give yourself the same level of dedication and loyalty that you give everyone else. And remember, by doing this you are literally making time later because you can take fewer clients and give them more of you, or you can afford to hire more people to offload some of the rocks in your backpack. The point is, this passive revenue stream will benefit you and the people you are loyal to.
Evaluate your systems: My good friend Emily with PubNapkin Partnerships is going to be on the show this month to talk about workflows and how she helps small business owners streamline their back office to free up time. I’m going to link her website below that way if you want to reach out to her sooner you can. One example she has done is to help people automate invoicing. I didn’t realize how many small business owners are chasing money because they forget or run out of time to create and send invoices. Emily has solutions to this problem so you can get paid and free up your time!
So evaluating your processes and finding ways to automate or reduce your tedium are some great ways to carve out time that you can put towards building your passive product.
Another great resource for solving the dilemma of not having enough time is outlined in the book The Big Leap. Recently, in episode 65, I spoke about my experience reading this book and applying its principles, but I didn’t talk about one of my favorite pieces. Einstein time. Einstein taught us about the theory of relativity and that we experience time relative to the situation. The example from the book is 5 minutes with our hand on a hot stove would feel like an hour while an hour without beloved feels like 5 minutes.
The author Gay Hendricks, goes on to say that in essence, Einstein’s teaching illuminates that humans create time. Even though I’ve listened to the book twice, I still don’t quite understand the physics of it, but I did try out the lessons the book offers to create time. The first was to stop complaining about time and lack of time.
I began replacing phrases I said with alternatives and also noticed how much I was complaining about time. That alone was surprising. Secondly, I began saying to myself, “I create time. I arrive at the exact moment.” Or “I have exactly enough time I need to accomplish the things I want to do today.”
I have had some incredible experiences using these techniques and more importantly, I have been able to curb overwhelm and the suffocating anxiety that can creep up inside my throat when I start thinking about all the things I have to do. I will link the book in the description if you want to check it out. I strongly recommend it.
Although it has been a little bit of a challenge. It definitely brought awareness to how much I talk about, think about, and complain about time. And that alone has been transformational.
I wanna get back to the steps to making your business passive. Okay. So we talked about committing ourselves. We talked about dedicating time. The third one is to pinpoint profitable products. Now, you may be asking how do we know what will be a profitable product?
A quick Google search and you can probably come up with 20, 25 different products or passive ideas. But to know which one is going to align with your brand to know which one is going to most likely be profitable, knowing where and who to target.
There are so many moving pieces that go into that. I have created a mini-course. It's just $99. You can find it on my website thepassiveincomeexaminer.com under resources. It teaches you how to pinpoint a passive product.
So that is one way you can do that. That is step three. The next step is market research. This is so crucial. And quite frankly, a lot of people don't even know how to do it. This can involve getting a focus group together, getting people to give you ideas, feedback, polling, your clients, polling perspective, clients going back, and reaching out to people that you lost to find out what you could have done differently. I mean, there are so many different ideas on how to do this and there are ways to do this not involving our clients. So if that idea just does not sound good to you or appeal to you whatsoever you can certainly do keyword research and there are tools that you can use to strategize and figure out what is being done out there.
What are other people doing in your industry that they're offering that you could piggyback on or change it or spin it your own way? Obviously, I'm not encouraging you to copy anybody else's work, but it's a great way to generate ideas and just to see what the market's doing, plus, it's a great way to see what the price is, what people are offering and how much they are and all that jazz. There's a lot that goes into market research. Maybe even doing some research on market research could be a good idea also, but that is step four, essentially. You really want to test your product before you put all the energy and the processes behind it. Because one thing I can tell you is building a passive product, involves creating a funnel and a pipeline, and there are emails, there's tech that goes into this. It can be labor-intensive. So you're gonna wanna do some research on that as well. And there are just so many layers I can, yes, is the best way I could explain it that once you get into it, it can feel overwhelming and you might feel like you really need help. You might feel like it is more than you can handle especially if you're not very techy, maybe it makes sense to hire this out. I mean, there's a lot of things you can do to make this work.
But if you don't have a product that the market is interested in there is no sense in putting your energy and time into the funnel creation and the emails and all of that, the landing pages, it is just simply frustrating and a waste of your time and energy. So definitely make sure you do quality market research and you feel confident about your product before you go to market.
And then step five is to market it. What do I mean by that though? It isn't to launch it into the market, although that's part of it, but it's to have an effective content strategy that will drive traffic to your product automatically.
Okay. So this is obviously a condensed version of the five steps to making your business passive. This is something you could probably do on your own. You can Google, you can research, you can YouTube, you can do all those things, or you can hire somebody to help you. Okay?
And this is gonna lead me into da, da, da.
I have an eight-week mastermind in case you didn't know this is coming up in April. Right now we are taking applications because it's going to be an intimate group of rockstar entrepreneurs like you, who are ready to scale their business with passive income.
Hence the name of the mastermind scale is your business with passive income. So we go through all five of these steps. Obviously, you have to do number one without me and that's to commit, go check it out. The website is www.thepassiveincomeexaminer.com/mastermind.
I outline everything that we're gonna go into, but just to give you a synopsis, the five things we just talked about, how to dedicate time. This is what's so exciting. I told you Emily's coming on the podcast later this month, she's participating in the mastermind. You'll get one on one time with me and with her to help streamline your back office so that you can carve out the time you need to get this done. We go through how to pinpoint that passive product. We talk about market research. You get to practice it. You get my, my eyes on your business.
As you are growing, we go into market research. In fact, this is one of the most exciting parts of this whole thing. And the thing I think has the most value is that not only is it an intimate number of business owners to start with, but we're going to put you into small five groups of five or six. I'm calling you pods. Okay. And the coolest thing about this is you'll get to bounce ideas off of each other, do the homework together. It becomes like a mini focus group. This is what makes this program so unique. Not only is there training and not only is there accountability from me and from Emily, but then there's accountability also from each other, and you get to help each other through this, people will create lifelong friendships. And sometimes, you know, it's true. Being a business owner feels lonely because people don't get you.
They don't understand what you're going through and the stress of what you have. So it's easy to feel alone. And this alone is one reason why this mastermind is so worth it friends.
So once again, go check out thepassiveincomeexaminer.com/mastermind.
Right now you can fill out the form to apply. We will be reviewing the applications and only a select few will be allowed to participate. So check it out. If you have any questions, definitely reach out to me. They're on Instagram at the passive income examiner or, via email, which also is on that worksheet. So feel free to check that out.
All right, friends, I hope this was helpful. At least you have a roadmap for the next steps you can take. If you do wanna embark on this, on your own, by all means, pay, subscribe to this podcast, because we are going to go into these steps in more detail over the next couple of months on the podcast. And I'm excited to help you. I'm excited to see what happens. So definitely connect with me on Instagram @passive income examiner, share with me your wins, and until next week bye for now.