Passive Income Goal: Near Miss and New Plans
Nearly a year ago I wrote about a goal to create passive income of $500/month. In that post I outlined 4 different things that would contribute to the goal. Over time those changed, but the result is that only one of them counts at this point. Our investment portfolio is, for the purposes of this goal, creating a passive income of $426/month. None of the other projects led to any income which means that I fell short of the goal. All of those projects eventually ran into obstacles that I didn’t feel were worth overcoming so they are currently on hold.
Good Leads On New Income Sources
As I mentioned before one of them did lead to another product that is more promising. My first attempt at selling it didn’t get me any results. Since then I have updated it to look a lot better and do a bit more and I expect the first sale this week from someone I have been talking to a bit. So far I have earned an hourly rate somewhere under $1 for this project based on the time put in but I am now working on promoting it to get more sales. If that generates even minimal results it should easily bring in at least $100/month soon, putting me past my original goal. Unfortunately that product is in an area where I don’t know enough to practice all the marketing techniques I have been learning about.
But the good news is that I have come up with another service where I can do most of those. Once again I saw a comment on a blog hinting at the need for it, and within a week I had created something for it and replied. In this case my strategy is to create a free version that does some basic tasks and then later sell additional services if there is enough interest. I have spent enough time researching the market that this service is for so I can do quite a bit of marketing. The fact that I’m giving something away for free makes it easier to get attention. And if that makes a good impression it will make it easier to sell something later.
I’ve also come up with some other ideas recently that I’m starting to test. Following my past experiences I am focusing on the first big step of getting potential customers on board before actually building the thing. I’ll spend a little money and time to try this but I’ll cut off the projects quickly if they are too hard to promote.
Two of these projects are e-commerce websites which are somewhat related. Usually when you hear about someone launching an e-commerce website to build passive income it tends to be pretty hokey. But these websites are based around things I would like to be able to buy more often, and I know what it takes to make them high-quality (if there is enough interest) and create lots of value in the market. To test these websites I am planning to set up very simple pages advertising 1-2 products and then try to get a few interested buyers. If that works I will build them up from there. Within hours of having the ideas I came up with some pretty extensive marketing plans that I can roll out in stages if things are going well.
Another project is a sort of affiliate site with a twist. It’s a comparison shopping site that’s focused on finding the exact product you want in a certain category. That part will probably have to be free but I could build some affiliate deals for the products it recommends. This site is also something I would personally want to use for purchases so I know how to make it better than anything currently available. To start with I will set up a website that shows the first search page and see if I can get people to try using that. If that works I will set it up to actually find the right products and then once that starts getting enough people using it I can work on affiliate deals.
Putting It All Together
If all of these projects work out it will give me experience with a variety of businesses. I would have one software product, one online service, two e-commerce websites, and one affiliate website. Setting up that range of businesses could take a lot of work up-front. Many people struggle to operate just one business. I think my past business experience, my constant study of other businesses successes, as well as my current energy and focus can take me further than the average person but it will still be challenging.
My strategy is to test the big obstacles early and kill off the projects that don’t overcome it. If they do work I want to quickly get them to a point where they can sustain a very minimal level of revenue without taking up much of my time. From there I can go around and focus on whatever looks like the biggest opportunity to build revenue. I will do everything myself at first but start outsourcing or hiring when it can be done profitably.
All of this has to be done on the side of my main business. Fortunately that business has improved a lot this year so I can take more time to do things like this. One big part of this was to “productize the services” by setting certain limits and requirements on them so that I can sell them more like products without having to spend as much time doing everything differently for each customer. That has made things simpler for me and my employees. Another part is a marketing plan that I’m rolling out now to get access to more customers. Combining a simpler business plan with more customers is always good 🙂 Even though all these side products and websites aren’t directly related to my main business, each one is an opportunity to practice things that can be re-used in other businesses and in many other ways that I can’t even see yet.
Based on this I think I can create a passive income of $750/month by the end of the year. One component of this will be the investment portfolio. With regular additions alone I expect this to count for about $500/month at year-end. The other part will be results from my recently-launched product and service as well as the new projects. I will only count the income net of any expenses so they need to create a profit of at least $250/month in the next 6 months.
Even getting to that low level of income will take a lot of work. But based on some things I’ve been reading recently and changes made this year, I am already working actively to get things started. I’m more interested than ever before in my main business so this isn’t about retiring to a beach. I just want to find the right combinations to create even more profitable assets. This chance to practice marketing skills and build more businesses is very motivating for me right now.