Here are 6 passive income strategies to help you generate consistent monthly income for your online business. Use our guide for your main business or as a side business.
Switching over from a job to being an entrepreneur can be rewarding.
It could benefit you in ways you’d never have seen coming.
However, one of the most common pain points for entrepreneurs,
Is that income is not always consistent.
Have you ever found yourself wondering if it is time to close your business and go back to looking for a job?
I’m sure that quitting your job to start an online business has brought in a similar struggle for many of you.
In this article, I’m going to address how you can triumphantly deal with this problem – and no, it’s NOT the time to go back to a job.
Why do you want to have a monthly passive income?
In my experience, I have observed that a monthly passive income gives you a sense of security because you can plan out your short-term and long-term expenses.
Especially when planning to save funds for investments or your retirement.
A regular paycheck allows you to comfortably plan chunks of larger spending.
Like taking a vacation from time to time!
If you have an online business and you find yourself worrying about the consistency of your flow of money a lot, you are not alone.
However, while this is completely normal (and even common),
I want to highlight a few important things that you should keep in mind when doing business digitally.
It has been said, very often, that you need to focus on marketing your business right,
but that’s not the only thing you need to focus on!
After all, if you’re going to market your business perfectly, you’re going to need a business that is perfectly marketable.
Here are a few pointers you should remember before we jump into a step-by-step guide on passive income strategies:
Tip #1: Treat everyone that interacts with your business like they’re already a customer
This is important.
Despite having a business that’s purely online, where your prospects and customer could be just numbers on the screen.
You need to treat all of your customers – potential or actual – as people who already have their solution solved, thanks to you.
Think about the whole ecosystem around their needs and problem, not just what you’re solving.
That makes them want to actually buy what you’re selling.
Make people buy feel you understand them in the most profound way, not just try selling your product!
Tip #2: Integrate traditional business practices into your online business
While going digital is quite essential today, I have noticed often that when you focus entirely on digital business, you lose touch with the fact that human interaction still matters.
Things like phone calls still do play an important role, because they’re quick;
So while it is tempting to just have a WhatsApp number where someone can text you, it can help to have a phone number where people can call you.
If they aren’t exactly digital natives yet.
Tip #3: Target the audience that’s most valuable to you
Having an online business means that you can reach out to masses of people.
Pretty much wherever you want to find them;
But as with any business, it is crucial for you to identify those audiences that are valuable for your business.
I have noticed that new entrepreneurs, when working on their online business, often try to reach out to a broad set of people.
The problem is,
It’s difficult to convince a large number of people that they need a product – if it’s not solving their immediate problem!
Narrowing your target audience can help you focus on those people that will actually buy your product or interact with your business positively.
Tip #4: Focus on lead generation
In the online business world, there’s one big advantage you can give yourself over a regular business;
Which is a consistent lead generation.
I’m sure you’ve put in a lot of time and monetary investment into getting your website to have a well-designed SEO strategy
You probably update your social media regularly too.
So, what could be the reason you’re not generating enough leads?
One reason is often that the people interacting with your brand are not giving you any information about themselves.
Information that’ll help you get in touch with them.
You need to reach out to a subset of your audience that actively expresses interest in your business.
There are different ways to generate leads but the main idea is to offer them something in return for their contact details.
Tip #5: Build a system to convert leads into customers
It is important to have a procedure that helps you convert the leads you have into actual customers.
A lead should show interest and commit your business (in the form of email and name) for it to actually be valuable to your brand.
I will talk about this more in detail in my strategy below.
Tip #6: Be realistic and patient
You need to steadily build your business.
It takes some time to get the steps mentioned in this guide in a fashion that is organized.
But it will happen.
You just need to continue focusing on your goals.
Setting short-term and long-term goals is helpful, and often helps you look at it realistically.
But be ready to change your goals if you find that the market has changed or you have a better problem to solve.
Let your audience dictate your path.
Now that I have taken you through a few things that you should definitely keep your eye on,
I’m going to take you through you a step-by-step strategy that can help you generate consistent passive income from your online business:
Step #1: Create a service and educate your customers
It’s always good to test different products and business opportunities.
But the key is to educate yourself and your prospects about the main service you’re giving.
You need to know your product or service better than anyone else does.
Knowing the ins and the outs of your business can do wonders when you’re working on establishing a good online business,
Because you can use different channels to educate your audience about what you offer them.
So, action Items:
- Break down your offering into simpler chunks and tell your leads what your product is all about.
By educating your leads about your product you can turn them from leads into customers.
Step #2: Choose the right pricing, and experiment
Choosing the right pricing can be tricky.
It all depends on how you quantify the things that go into it.
Usually, you would include your labor cost into a physical product.
If you offer a service, you need to quantify expertise and time into a cost and then decide the final price of what you’re selling.
I truly believe though, that the best way to price a product is through experimentation.
A few common pricing experiments to boost sales are:
- Anchor pricing – when you put one product next to another which is more expensive – a customer may be likely to buy the cheaper one.
- Bundle pricing – this can allow you to offer customers ‘added-value’ through putting together related products and selling them at a ‘package’ price.
- A/B pricing – Much like split testing for advertisement, A/B pricing is when you compare the reactions of customers to different pricing and see what works out better.
- Charm pricing – An age-old trick, if something costs $9.99, people are more likely to buy it than if it costs $10.00.
- Competitive pricing – Take a look at what your rivals are doing and price your service in a way that makes people want to switch to your product!
These pricing strategies may not necessarily work for you, but it is important to experiment to see what your customers want!
You may be in a price-sensitive market where someone is willing to buy your services if they are cheaper.
Or you may be operating in a market where customers view a high price as a measure of good quality.
And the best way to really understand it is by experimenting with pricing.
It does take a little bit of trial and error for you to get it right, so stay patient, and stay vigilant to see what works.
Step #3: Create payment plans for individual and recurring services
One of the most brilliant things about having an online business is the flexibility of payment.
People LOVE being able to decide when to pay.
Some prefer to pay a one-time charge for a year’s worth of service, and some people prefer to pay per month for the same service.
In fact, you can and should also offer a subsidized rate for those who want the service every month.
For instance, it always costs less to have someone maintain your website every month than to have someone build a website for you.
When people choose to opt-in for your recurring services, you are essentially guaranteeing that you’ll have a certain income every month.
This flexibility also allows the customer to pick the pricing that makes more sense to them.
According to their expense goals.
Step #4: Set an income goal every month
I stand by the idea that you should set short-term goals.
Not sure why? I’ll tell you.
Setting a monthly passive income goal can help you determine where to focus your efforts.
It helps you understand how much you need to sell to achieve your passive income goals.
Let me give you a very simplified example.
Suppose you have a monthly goal of $100.
You have 5 people paying $10 each because they subscribed to your services and pay you that money per month.
So now you know for sure that you have $50 coming in.
What about the rest of your income goals?
Now you can focus on the acquisition of customers.
What can you offer to the leads you’ve generated?
Maybe you can focus on volume sales, and provide your services at a discount.
It could help, for instance, if you offered a discount on one-time services;
Or even offered to give a month’s worth of services free if they subscribe to your yearly plan.
Trying to meet your income goal can be stressful, of course.
But it is always good to have realistic projections of the minimum amount you want to make in any given month.
Step #5: Test your services and gather leads
I wrote about how gathering leads is important, but it is also important to test your services.
Send out feedback forms to your customers.
If your business has an app, ask for a rating on the App Store or on Google Play.
You can also have people give you feedback right after you have delivered service.
With the help of a quick rating system on your website.
In fact, a satisfied customer can also help you gather leads, with some referral programs and rewards.
Step #6: Create an effective sales funnel
Now, you should look at creating an effective sales funnel.
What is a sales funnel?
It is a flow of pages or steps that you set for your leads to take in order to ensure they buy your product.
Basically, it’s a sales machine.
This is important because you can grow your online business and regularize the income you get.
When setting up a sales funnel these are some tips you should keep in mind:
- Analyzing your audience’s behavior is important – Understand what users are likely to do, at what touchpoint and what matters to them when making a purchase. Spotting areas in the funnel where users are likely to never get converted can help you target your efforts on closing up these holes.
- Good content is crucial to attracting customers – This requires you to find out what the users are searching for, what they want, and how you fit in.
- A great landing page – with a clean user interface that enhances the user’s experience when they end up on your website is important. In short, your business’ landing page needs to wow your customers, and direct them carefully to the next action you want them to take.
- Use emails – Keep in touch with your leads through newsletters regularly (but not every single day!) and let them know what your business has been up to. Show them what’s happening, and let them know about any offers currently on your website.
- Keep in touch with existing customers – Give them a reason to stay loyal to your business. Offer them discounts, loyalty-codes, special access to new services, and so on.
It has become much easier to track the success of an existing sales funnel,
Using data, you can also tweak your sales funnel accurately when it’s required.
It’s important for you to know how to have a business that generates a monthly passive income.
By focusing on what matters, by creating a sustainable and well-priced service and ensuring you have a sales funnel in place you’re on your way to a successful path.
But remember this: Rome was not built in one day!
Comment down below to tell us about your online business and your experience with putting our strategy to work.