A passive income strategy can give you a steady source of cash flow.
While the thought of making money doing little work may sound too good to be true, it’s a reality for some small business owners using passive income to supplement their work.
By developing steady passive income streams, some business owners are letting their money work for them. That extra cash flow provides a real boost to a small business, or a nice financial cushion for when times get tough.
What is Passive Income?
Passive income is generally revenue gained with very little effort or upkeep and may come in the form of royalties, affiliate links, or online ads on a video or blog. It could also be online courses, programs, or e-books. For NFIB member Shad Hall of Shad’s Custom Countertops Inc. in Windham, Maine, it’s rental income.
A few years after moving in to the building where his business is located, Hall bought the property and building. When the opportunity came up to buy an adjoining property a few years later, Hall couldn’t pass up the chance. Hall outgrew the storage in his current location and knew the property could be an incredible investment.
“It came with an office space I wouldn’t need, so I knew I could rent that out,” he says. “Now that rent covers my mortgage.”
That extra rent income also allows Hall to pursue new opportunities. Aside from covering his monthly mortgage payments, he contributes some of the extra rent money to a high yield savings account instead of keeping it in his business checking account. With the extra income out of sight and out of mind until it’s needed, the high yield account pulls double duty and grows the company’s savings even more.
Think Digitally
Of course, renting out real estate requires an ability to invest, and that isn’t always a viable opportunity for all business owners. The good news is that there are other ways to generate small passive income streams that require far less capital. Writing an e-book, cultivating a blog, or creating an online course—and charging customers for it—can all be ways to create additional revenue without much extra effort or expense.
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Expand Your Network
Hall is exploring some of these other options himself. When an acquaintance he hadn’t spoken to in some time asked about his recent vacation, something he’d learned about from Hall’s personal Facebook, Hall realized he had a built-in online audience of several thousand people. “I post a lot to Facebook, but I didn’t realize how many people follow me,” he says.
Now, Hall is expanding his reach, beginning with a digital refresh for his website, starting a blog, and revitalizing his business’s social media presence on Facebook and YouTube with the hope that some new content will draw in more customers, income, and exposure.
