How To Build An Online Business & Generate Passive Income
Passive income has become a bit of a buzzword among digital entrepreneurs. From automation tools and online courses to hacks and shortcuts — everyone wants to get easy money fast.
The truth is, the route to passive income is tricky for most people, and the whole concept of ‘passivity’ can be misleading. In reality, you often need a lot of budget, skills, or time to succeed — or all three. There are office costs, staffing costs, brand development costs — digital entrepreneurship may look easy and glossy from the outside, but it’s hard graft.
That being said — it’s not impossible. Some lucky people stumble on a niche and make the most of that for awhile. For most, online income is far from ‘passive’ at first, but once you figure things out — you can have yourself a nice little earner.
Recommended Reading: Brand – Building Case Study – Building a Large eCommerce Store
Decide on what to sell
Most sales fall into these three categories: selling products, selling services, or selling leads on to other businesses.
You may also make ancillary income from advertising or sponsorships — which may eventually become your main source of income. A clear vision, financial goal, and sales funnel will keep your business on track.
- Think about your strengths, and follow them. It will make generating an income that much easier and simpler.
- Selling hours is tough — you may want to package services as a product instead. Productization of services is very common, and can help provide clarity for clients and customers. A tool or a product often genuinely arises from the work that you do, and you start selling that. Marketer? Why not sell a course and ebook, as well as your consultancy services? Start thinking in terms of products to make the switch to passive income.
- Lead generation sites are great for SEOs, but you need to able to build sites up fast and then rank them effectively. If you do, however, crack lead generation websites, this is a good little money spinner.
Monetize your content
One of the most precious online commodities is content. To be great at the digital game, you need shed-loads of quality content, including standalone pieces of evergreen content or ‘wow’ pieces. Valuable content resources can be anything from calculators and quizzes to databases and downloadables.
There are a lot of different types of content you’ll need in order to build your online business and start raking in a passive income from it:
- Product reviews and guides – These are ripe for affiliate marketing. Just sign up with the vendors’ affiliate programs, and watch the money roll in. You can even manage your affiliate revenue from a central dashboard. Remember, some brands will be pickier than others when it comes to who they allow on their program. You won’t be able to get by with low quality, spammy review content. Top tip — in-depth video reviews are great for users, search engines, and brands, so don’t be shy!.
- Offering sponsorships on your website, whether you run a blog, news portal, or online store, is a great way to make money from advertising. Of course there is always Google AdSense, but sponsorships can be a more steady form of regular income, especially if you have a niche audience.
- Ever considered creating a closed ‘members only’ portal? People join a vast number of online groups and sign up for subscriptions every day. If what you’re offering is good enough, why not take this route? There are loads of easy ways to manage membership sites — it’s no longer a huge, techy feat. Monetizing knowledge is hugely valuable.
- Ecommerce can extend beyond physical products to digital content too. A health food store may sell online recipe books, or create a meditative podcast. A lifestyle brand may create sellable guides, or a blogger create stylized worksheets and memos. The sky’s the limit when it comes to productizing your content.
Content monetization is all about striking a balance between making money, and serving the needs of the user. If you are taking over an existing business where people have been used to accessing resources for free, there may be a certain amount of kickback if you start to charge them. At the same time, online newspapers and journals are resorting to the same tactics, and consumers are generally aware of the costs of creating quality content. After all, the best things in life aren’t always free.
Build your brand
Design and branding work is expensive, and you’ll pay a premium to get a topnotch digital brand. However, getting your branding right is essential if you want a stable and desirable online business that can provide you with a long-term passive income.
Here are some things to consider when building your brand:
- Start with research — establish your niche market and look at what elements are already doing well (and why). Audience surveys are great, but they can also be a bit of a ‘lazy’ way of getting brand intel — try actually talking to people.
- Spend time getting the design of your website right. You can test the waters with WordPress Themes and simple ecommerce builders on a trial basis. This allows you to work out how to visualize and build your brand before you go fully custom and make a long-term commitment.
- Use freelancers and agencies to help with your branding — they have both the creative vision and the required experience.
- Consistency is a branding cornerstone, so make sure your brand has a consistent message and identity.
- Time and announce your brand launch with an offer, deal, or event to make the most of this PR-worthy news.
Go back to your audience
Don’t try and sell products that one wants — start with the basics and find out what your audience reallywants from you by engaging with them in the following ways
- Keyword research – this is an absolute essential, and you need to approach it with a ‘deep dive’ approach. Proper keyword research can take days, and you will have to organize and categorize all your keyword data so that you can make the most of your newfound audience insights.
- Focus groups & surveys – these can also give you valuable data on any upcoming trends or ‘hot’ niches. Spend time on Quora and Reddit in order to get into your customers’ heads.
Go all-out with your SEO
SEO is an absolute mainstay of any online income. Organic traffic has better ROI than most other forms (paid, social etc), and SEO skills themselves can be easily monetized as products or services.
Keep SEO in mind when evaluating a niche, and spend time auditing your new business’ SEO from every possible angle. Content, backlinks, on-page, local SEO — really go at it and cover all bases to make the most of your existing online footprint
Use smart tools
Automation is an online business lifeline. Email, social media, website monitoring, customer interactions — all can be made smarter, safer, and more efficient with online tools.
There are a ton out there to choose from, so it’s worth learning from pros like Pat Flynn. Read their blogs, follow their journeys, and engage with their online audience on forums to data-mine and find out what’s worked for others. You want to find smart tools that integrate with each other and don’t cost the earth.
Be careful with high subscription fees — they will quickly eat into your passive income margins.
Don’t fall for any scams
There are a lot of people out there in the passive income world who will use OTT statistics and case studies to try to sell you their latest course or webinar. Be very conscious of why someone is pushing a certain tool or solution on you. At the same time, don’t believe people who say it’s an impossible dream either!
Passive income is a great way to futureproof your online business against sudden fluctuations in the market (or your time), but it will take dedication to get there.
Start with the pointers laid out in this article but don’t stop there. Find other great articles, watch expert training videos, and speak to people who have been in your starting position and then created their own successful passive income sources.
Keep hustling and learning, and you should be able to steadily build up a credible income that will become more and more passive as time goes on.
Kayleigh Alexandra is a content writer for Micro Startups — a site dedicated to giving through growth hacking. Visit the blog today to get our latest thoughts on startups, and entrepreneurs, along with charity insights from top experts around the globe. Follow us on Twitter @getmicrostarted.