Do you want to find out how to create your first passive income stream?

As a business owner, it is vital that you make money. You can generate money in many ways. Income can be described as passive income or active income. And then you can accept one-off payments or recurring payments.

You can have a successful business using any income model, however, there are a lot of people who are keen to create a passive income stream for their business.

A passive income stream is where you aren’t actively involved in the delivery. This means essentially someone can buy something and you get paid without having to do something once the purchase has been made.

However, don’t be fooled into thinking you don’t have to do anything. In most cases, a passive income stream will need work initially to get off the ground.

Below you will find 3 different ways to create your first passive income stream in your business.

AFFILIATE INCOME

One way to create a passive income stream is to become an affiliate. As an affiliate, you receive a commission when someone else buys via you. When it comes to affiliate marketing there are so many ways to get started. You can become an affiliate for products, services or software.

Here are a few ways you can get started with affiliate marketing:

Become an Amazon Affiliate

With so many people buying through Amazon it is a great way to get started. As someone who recommends lots of books, this was my entry into affiliate marketing. You can find out more about being an amazon affiliate and apply by clicking here.

Join an affiliate marketing network

There are a number of affiliate marketing network. You can open an account with a network and then be able to search all of the affiliate schemes they run and apply as necessary. An example is Commission Junction.

Check for affiliate schemes for your favourite tech solutions and softwares

A large number of Software as a Service (Saas) products will have an affiliate scheme. Type into Google a software you use and then affiliate or referral scheme. They exist across a wide range of softwares from emails service providers, website hosts, social media schedulers,

The pros of affiliate income

There are so many ways to get started with affiliate income – Due to the wide range of things you can become an affiliate for there is likely to be something for you no matter what your business is.
It is easy to get started – You aren’t responsible for making a product, service or software. This means you can quickly get started.

The cons of affiliate income

You have to ensure the quality of what you are recommending – Whilst you are responsible for making the product, service or software, if you are recommending something then people will trust you and therefore you need to ensure you only recommend things you wouldn’t mind your name being associated with.
You are reliant on someone else – If the business decides to make a change to their affiliate programme (anything from changing the commission to cancelling the scheme altogether) there is nothing you can do about it.

DIGITAL PRODUCTS

Another way to create a passive income stream is to start selling a digital product, such as an e-book, a course, audio training etc. In order for it to be passive the key is that someone can buy and receive your product without you having to do anything. It is delivered automatically be electronic means so you have no involvement.

Now even once you have decided on what you want to make there are two options: to sell on your own platform or to sell on someone else’s platform.

For example, if you have an e-book you can choose to sell via the Kindle Store or you can create a download on your website.

The pros of selling digital products

You are in total control – If you make your own product and host it on your own platform then you are totally in control. You set your pricing and can ensure the quality of what is delivered.
It can be an income stream as well as support your other products/services – If you create an introductory digital product (like an e-book or course) then it can act as a great way to position yourself as an expert within a niche. This can act as an introduction to you and what you do and then you can encourage those buyers to work with you further by buying your other products and services.

The cons of selling digital products

It takes an initial investment – Unlike in affiliate marketing you have to create something to get started. This will require an investment in terms of time, energy and possibly money.
You have to look after the ongoing maintenance / relevance – Depending on what you create there may be a degree of maintenance involved. Apps have to be updated as Apple and Google change their software. Courses may need updating if there are changes within your industry.

DROP SHIPPING

I have included this as a third option because it is an option, but since I specialise in supporting service-based solopreneurs and small business owners I don’t have much experience in drop shopping.

With drop shopping, you can sell physical products, but you are not involved with keeping stock, fulfilling the order or dealing with customer service. This means that once someone clicks buy someone else is doing all of the work for you. You pay a fee for this, which will mean you profit is less, but you aren’t having to do everything so it all depends on whether you are looking for more money or more time in your life right now.

The pros

A great way to get experience in selling physical products – For some people they dream of adding a physical product into the business mix and drop shipping is a great way to get started
Scalable – Because the business isn’t reliant on you fulfilling the orders in the first place it means as more orders come in the responsibility to fulfil the orders are still with your selected partner. This means the pressure is on them to ensure they can keep up with the demand.

The cons

You are reliant on a fulfilment partner – The customer doesn’t know that you are using a middle man so it is important that use someone who meets your standard.
Reduces profit – The downside of using someone else to deal with your fulfilment and customer service is you have to pay a fee, which reduces the profit you will make.

THERE YOU HAVE IT! 3 DIFFERENT WAYS TO CREATE YOUR FIRST PASSIVE INCOME STREAM.

In the comments, I would love to know what passive income streams you already have or what stream you are interested in pursuing.