Generating new income in the last year has been a challenge (to say the least) for small businesses and solopreneurs. The Covid-19 pandemic has seen the economy come to a standstill with many struggling to make ends meet. 

But there is hope! Passive income can help you generate an extra revenue stream aside from your day-to-day income with very little input or time on your part. Sceptical? Read on…

What is Passive Income?

Active income is very much about the amount of revenue you see following all your hard work to achieve your business objectives. Every hour you work is an attempt to generate active income. As the name suggests, passive income is the opposite – a revenue stream that is generated following just an initial investment of time and sometimes money. Essentially, it is a branch of your business tree that needs little maintenance once the seeds are sown, but one that can bring you great reward if left to work its own magic.

Passive income can be generated in a range of different ways – renting your assets and property, investments, retail of digital products or even affiliate marketing. All of these options could generate a healthy passive income for you.

It is important to note that passive income is taxable, albeit at a potentially smaller rate than your general ‘active’ income. The differentiation is determined depending on how you’re generating your passive income and how much you’re earning from it. Trust me, it’s worth investigating if you want your smaller business or venture to grow beyond a standard business capability. You can find out more about the rules here.

What options are available?

Depending on your business and how much money you initially want to invest, there are several good options available. Here are some ideas to get you started:

1. YouTube videos and Google Adsense

Creating YouTube content is a great way to generate passive income. If you create engaging content, an audience will follow you. You can share your industry expertise and opinions alongside advice and tutorials whilst utilising Google AdSense as your passive income option. You set the video up with advice from Google Ads about runtime, choose your audience criteria (considering variables like age, location, interests) and then set a budget so you’ll never overpay on your monthly or daily budget. Easy, simple and effective. 

The benefits:

• YouTube is the second most popular social media site in the UK with an adult reach of 35.6 million. 35% of the population actively use the video social media giant meaning your videos teamed with Google Adsense will be seen by a wider audience.

• You do not need a product to sell to your audience. As long as your website has relevant information you will be able to generate revenue with Google Adsense on your YouTube videos.

• Google Adsense is a low maintenance solution. Set it up and sit back.

• It’s quick and easy to set up so non-techies are in good hands.

2. Photography

You may be a talented photographer, always taking photos of your products or your service in action. But did you know websites like Shutterstock will pay you for top quality images? This is a great way to make passive income from a passion. This can also extend to stock videos and footage you’ve created. A good tip to remember is the more niche your subject (with some clever keyword tagging), the more money you stand to make – these days, users are looking for some obscure imagery, so get yourself established on these stock image sites and the income will follow swiftly. 

Don’t upload too many of the same types of images – give yourself some variety. To begin, you normally upload a simple portfolio of photos and wait for approval from the powers that be. Once you’re in, just keep uploading as and when you can. 

The benefits:

• You can use images from your portfolio to sell back to others for a steady passive income.

• You can use smartphones to create high-quality images now – no expensive camera equipment required.

• There are several good stock image and video platforms available.

3. eBooks

Journalist Christopher Hitchens once said, “Everybody does have a book in them, but in most cases, that’s where it should stay.” On this one, I have to disagree with Mr Hitchens and say, if you have a good knowledge of your business and a way with words, an eBook might be a good way to make passive income. You write it, upload it to Amazon Kindle or another eBook hosting platform, place a modest price tag on it, market it on your website and wait for the sales.

The benefits:

• You can blog or use content marketing to promote sales of your book without any excessive marketing costs.

• You can set up ‘tripwire pages’ on your site that provide offers and discounts for a limited time only to help you generate renewed interest in your book. Everyone loves a discount.

• Set up costs are cheap on eBook platforms.

4. Blogging

You are able to create passive income on a blog you create or one you have purchased with an established following. Much like YouTube videos, you can use Google Adsense to market products on the blog and generate passive income. Generally, if you purchase a blog with good existing content, your initial investment will be repaid sooner than if you start afresh. If the content is ‘evergreen’ – for example, how-to or beginner guides – then you will see a steady stream of passive income from these posts where Google Adsense is most effective. Simply set up a blog or purchase the domain for an existing one and utilise Google Adsense to generate your passive income.

The benefits:

• If purchasing an existing blog, you are likely to regain your initial investment.

• Using Google Adsense, you can set bespoke audience criteria to target them with appropriate advertisements.

• You can use affiliate marketing on your blog (see below)

5. Digital products

If you’re in a competitive industry, but hold a strong reputation with your clients and audiences, it might be worth introducing digital products like online master classes or courses to help generate passive income. You can use YouTube again, but be sure to look at places like Udemy.com. Once you’ve recorded the class and uploaded it, anyone signing up can pay and review your class or course and help you generate a source of passive income. 

The benefits:

• You can offer different digital product packages – short courses or a series of classes which can have different price points that cater to everyone regardless of budget.

• You don’t have to attend and teach – you simply record and upload. No bookings or time commitment required.

• You can provide a range of different types of digital products – how-to, step-by-steps and tutorials which might not be available in person. 

6. Affiliate marketing

If you have a blog or a website, this one’s for you. With affiliate marketing, you sign up to promote products or services that align with your business and in doing so, you’ll receive a percentage of sales gained from the advertising on your website. It’s not that difficult to set up – you find a platform or service that offers affiliate marketing programs, such as Amazon Associates or eBay Partners, and sign up. 

It’s worth spending some time investigating this one. Be aware of the split of sales and how the passive income is paid. Some commission is good but other times you’re not likely to make a sizable return if the marketing is ineffective. Also, if there are lots of different products, you may have to sign up to market them individually creating a potential minefield.

The benefits:

• You negotiate and control which programs you want to join.

• You can earn sizable passive income if your marketing is successful.

• Once set up, revenue is paid regularly. At times, your initial few months is worth double commission.

Passive Income – Now or Never?

With the economy cogs slowly restarting post-pandemic, passive income is a great way to generate extra revenue. It can be affordable and rewarding, provide financial security and also help with your brand awareness. Give it go, secure your business, and don’t be passive (unless it’s income-related!).

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