If there’s one thing I constantly hear side hustles talking about, it’s passive income.

Of course, it makes perfect sense for us side hustlers to be talking about this hot topic; we don’t have the same 40 hours a week like most other small businesses, and so naturally, the idea of somehow working less while still making consistent money is appealing. (It’s all about working smarter and not harder!) But as great as passive income is, a lot of us tend to overlook just how much time, money and effort it requires upfront.

Speaking from my own experience, I’m learning this in real-time as I build my website template shop. This is my first dip into the world of passive income, and although I knew it would be a huge lift, I’ll admit that it’s been, well…a labour of love. I’ve been working behind the scenes on this new offer for a few months now, and it’s consumed most, if not all, the time I usually have in the week to devote to my business.

My Showit website template shop is my first dip into the world of passive income.

 

As I’m learning firsthand, passive income is rarely passive — in reality, it’s a ton of work, and it’s not necessarily as easy as it sounds. But all that said, I still think it’s necessary to working better in your side hustle and ultimately scaling it into a profitable part-time business.

So, if you’ve been considering creating passive income (and if you haven’t, here are some ideas to get you inspired), this blog post is for you.

First things first: What is passive income?

In a nutshell, passive income is money you make without having to constantly work for it. It’s the idea of “set it and forget it” — instead of trading hours for cash, you put in the effort upfront — like creating a product or service — and then keep earning from its sales over time with little to no extra work.

Aside from the obvious benefit of making money in your sleep, there are lots of reasons to invest in a passive income stream. When they’re successful, passive income brings in consistent and steady cash, making businesses less dependent on one-on-one services or sales. And when businesses are able to spend less time on 1:1 services, they have more freedom and flexibility, and are less likely to face burnout. For side hustles in particular, passive income is often a huge step towards becoming a profitable side business.

Although it has a lot of benefits, creating passive income isn’t as simple as it’s often portrayed to be. As much as I’m still in the thick of building my Showit website template shop, I’ve already learned so much about what goes into creating this additional revenue stream — here are my three biggest takeaways so far:

Your time and finances will likely take a back seat to passive income (for now)

As I mentioned before, building my template shop has consumed most, if not all, the time I usually have in the week to give to my business. Other than this branding project that I wrapped two months ago, I’ve had to really step back from taking on any new 1:1 projects.

Of course, there are pros and cons to this: On the one hand, fewer 1:1 projects has allowed me to better manage my time, which means less stress overall. But on the other hand, this has also meant a steep drop in my revenue.

As much as I knew I’d have to scale back my 1:1 services, the reality of it has been pretty jarring, especially given that my business still costs money to run. It’s forced me to take a closer look at my finances, and I’ve even had to pause (or in some cases, cancel) certain software and apps to cut down on my recurring costs. I see this as a temporary sacrifice, though; I’m one person, and contrary to what I like to tell myself, I’m not Wonder Woman. I can’t do it all, and sometimes, some things have to give.

So, if you find yourself in a similar situation, don’t be too hard on yourself — building a profitable side hustle is a journey, and it’s rarely linear!

It costs money to create passive income

Regardless of what you’re selling, to make passive income, you’ll need to have some sort of automation or workflow in place that can manage your entire sales process, from start to finish (without you having to lift a finger!). This is known as your sales funnel.

When it comes to choosing your funnel, there are plenty of options, including Etsy, ThriveCart, Shopify and Flodesk Checkout, but they all have one thing in common:

They cost money.

The exact price will probably depend on how complex or detailed you want your workflow to be, but you should be prepared to pay on a monthly basis, at least. (And if you’re a Canadian business like me, you should also be ready to fork out some US dollars.) I strongly suggest pricing out your sales funnel ahead of time so that you can factor in the cost as part of your monthly money management. (Also, if you’re curious about sales funnels and are unsure which one could be right for your business, feel free to reach out and ask — I’d be happy to make a few suggestions!)

With passive income, marketing is everything

One of the biggest misconceptions around passive income is the idea that “if you build it, they’ll come.” Time and time again, I see side hustlers put so much time, effort and money into their passive income idea just to launch to crickets. Why? Because they were so focused on building their offer that they completely overlooked marketing it.

Even though passive income is meant to run with little effort, it won’t sell itself — at least not at first. You need marketing to attract the right audience, drive traffic, build awareness and most importantly, sell. And depending on what you’re selling, marketing will also be key to making sure your offer or product stands apart from your competitors’.

There are lots of strategies you can use, from blogging to email marketing to social media and even paid ads. The main thing to remember, is that marketing fuels passive income, and it shouldn’t be an afterthought. As a matter of fact, you should continue marketing your offer or product long after it’s launched, so that you can constantly reach new buyers, keep your offer top of mind and of course, sell.

Final thoughts

Even though I’m still building my template shop, there’s so much that I’ve learned about passive income already. And if there’s one thing I’m definitely taking away from this process, it’s that passive income is rarely passive; not only does it require a lot of time, effort and resources, but it’s also very much a long game. But despite those hurdles, I still think it can be a game-changing investment for every side hustle.

If you’ve been thinking about creating passive income but aren’t sure where to start, I’d love to brainstorm some ideas with you and give you my recommendations. Book a 1:1 consultation call here, and let’s chat!