Does a truly passive income business model really exist? And if not, then how do so many people manage to earn money while they sleep? We bust the passive income myth.
In the world of business models, the passive income is the holy grail. Let’s face it, who wouldn’t love the idea of a business that required NO work, and yet made you lots of lovely profit?
But as The Launch Queen Emma Holmes reveals, all is not as it seems – and ‘passive’ incomes are usually anything but.
Why the idea of a passive income is just a myth
If there are two words that really get me going, they’re ‘passive income’. Why? Because people have, in recent times, got the impression that there is an ability in this world to do absolutely nothing, diddly squat, and get paid MASSIVE amounts of cash for it.
But that’s just not the case. In fact, as my mum would say, “If it seems to be good to be true lovely, work it out!”
I earn a ‘passive’ income
That’s not to say you can’t earn money when you’re not working. I have a wonderful business and I make money around the clock. I can even make money while I’m on holiday because I don’t need to be tied to my computer 24/7.
So that’s pretty much a passive income then isn’t it? No! I don’t do nothing for my income. I don’t just sit by and suddenly hear the ching of payment notifications hitting my email account.
But I prefer the term ‘leveraged’
So, if not passive then what is it? I like to think of my business as ‘leveraged’ and I work with lots of lovely ladies to help them to achieve leverage too.
Leveraging means that I am taking one hour of my life, and putting together a product or programme that I am able to sell over and over and over again. I do need to continue to market that product, but I will never need to put the work into preparing it again.
No business requires zero effort
There is no business model I have come across yet that requires no input whatsoever. The example that is often raised when I point this out to people is the business model in which people recruit team members to work with them, and make a percentage of all their sales.
But is that really passive? No! These people have to spend time, effort and energy recruiting team members who they then need to train. And if they want to have a good, loyal team then they need to continue to work with them.
They will also have a fall out of team members, and others who are not active within their team, so will then need to seek to replace these. So there is input in exchange for the profit, which equals leverage.
A leveraged business model enables you to earn more
By leveraging your business, you simply increase your earning capacity. In my business I provide advice, consultancy and support to female business owners.
Traditionally my role would have involved me working with individual business owners on a 1-2-1 basis. I would have been trading time for money, and would have worked really, really hard (probably heading towards burn out) as I built my business.
Then, poof, I would have ran out of hours. There would have been no hours left in the week to sell, in effect placing a glass ceiling on my earnings. Yes, I could put my prices up to earn more money, but I couldn’t magic up any more hours in the day.
I sell one hour’s work again and again
Instead, what I do is take one hour of my day and leverage it – sell it over and over again in the form of products and programmes.
I am still able to help my clients in MASSIVE ways, but for me it doesn’t matter if 10 people want my help or 10,000, as I can take that same hour and sell it over and over again. Time zones are not important and diary slots don’t matter; leveraging allows flexibility and freedom.
And so can you!
So beware of offers of opportunities to make money from doing ‘nothing’, or ads claiming to promise a 100% passive income. Please be mindful that in reality, 9 times out of 10, this won’t be the case. It will take a level of input – cash won’t just fall into your bank account.
Remember instead that leverage is the key! Identify what resources you have to help others, then take your time – use your one hour to help more than one person, and make money out of it again and again, just like me.
Emma Holmes is The Launch Queen, and if you are thinking of taking your passions and knowledge and turning them into products, then she has the ideal programme for you – First Profitable Launch.Emma Holmes