The Passive Income Myth Exposed
by Debbie Jenkins
Published on this site: July 15th, 2005 - See
more articles from this month...
In theory the idea of generating additional (and passive)
business revenue from books, CD programmes and eBooks couldn't
be simpler. Find a market. Create a product. Watch the money
roll in while you play golf, pamper yourself, shop for shoes,
go fishing or enjoy a little R&R.
The reality though is a lot different.
To make income from products genuinely passive there are
steps in the process that you can't afford to miss out. In
fact the first phase of setting up your passive stream of
cash requires hard work, persistence and intelligence. You'll
have spent a lot of time, effort and money before you can
truly say the money coming in is truly coming in of its own
accord.
So here's the myth:
Passive Income Is Easy Income
This dangerous myth has been shamelessly propagated by (almost)
all the people selling "Passive Revenue How To Products"
out there. What's worse is that they promote this myth in
their own interests. You see, if they told you the truth.
If they actually said that implementing their fool-proof programme
means working your nuts off and taking a financial risk then
they wouldn't sell so many of their programmes.
The truth is - us humans love the word EASY. "Easy"
sells. But nothing really worth having (as life often proves)
comes without a price. So in this case, unless you're extremely
lucky, you're going to have to push that passive income vehicle
up, an often, very steep hill before you're going to enjoy
coasting along watching the money roll in.
It's Not Really All That Passive Anyway.
In the diagram here.
http://www.leanmarketing.co.uk/champions/passiveincome-01.gif
you'll see that there's a lot of effort involved to get your
product off the ground. During this time you (or your publisher)
will be spending time and money. But even after you reach
the top of the hill (the tipping point) you still need to
be active to a certain degree in order to profit. When you're
coasting along at full speed you need to steer clear of obstacles.
If you forget about looking after customers or collecting
the cash then your income vehicle will crash. And you can
forget about making any money!
The Active Steps
- Gain Real Experience
Despite what people may say - if you're planning on producing
a "how to" information product you'd better know
what you're talking about. This does not mean attending
courses or reading books (which means you'll just be regurgitating)
but actually knowing (from hard experience) what it is you're
talking about. If you're ethical, authentic and genuine,
then you wouldn't even dare to claim you know something
when you don't. But plenty of people still do it!
How many people do you see selling "Get-Rich-Quick"
programmes who are flat broke? How many tell you how to
make a fortune on the Internet when they can't even do it
themselves? Too many!
If we can see through their lies then it goes without saying
that if you bluff it you'll get caught out eventually too.
So rule number one. If you don't know about it (from real
experience) then don't write about it!
- Identify An Opportunity
It amazes me, but some people even forget (or skip) this
vital step and wonder why they never make any money. You've
got to find a community or group of people who will share
the problem your product can solve.
It's your job then to identify a genuine NEED and market
for your product. What pain relief can you bring with your
knowledge? What expert information can you share on a popular
hobby or pastime? What challenges, problems or dreams do
people have that you can genuinely help them with?
- Create A Valuable Product
This is the point where you leverage your experience, expertise
and knowledge by turning it into a system which can then
be recorded and delivered without you needing to be there.
You can convert this system into a book, eBook, audio programme,
video etc.
A valuable product must be able to deliver on a promise.
It must be well put together and it must be unique. What's
your unique spin on the subject? What results can people
genuinely expect from applying your knowledge?
It's also a false economy to create audio (thinking that
it's easier) for a "how to" product, with steps
to follow, when a more appropriate media would be a book
or eBook. Audio is great for motivation or self-help. But
not so good for step-by-step stuff like DIY, Car Maintenance
or How To Draw. So don't think in terms of what's the easiest
thing for you - think in terms of what's the most effective
way tocommunicate what you know.
Also, forget the "Interview An Expert" model.
It's just a cheap (and blatantly easy) way to make a quick
buck without coming up with a single unique thought yourself.
- Promote It Like Mad
Even if you've been published by someone else - it's still
your responsibility to get the word out there. For instance,
if you have a mailing list then tell them about it. Your
publisher is unable to do that for you. If you're communicating
using blogs, chat rooms or forums (where your knowledge
is being openly displayed) then mention your book. If you're
still trying to sell higher-value products and services
then use this as your lower-cost way in. For lots of idea
on promoting things like mad on a budget buy The
Gorillas Want Bananas or Lean Marketing Toolbox.
Don't get lazy when it comes to promotion whether you're
doing it yourself or being published. If you're not making
any money and you're doing very little about it then you
only have yourself to blame; your publisher can only do
so much on your behalf and is likely supporting another
100 people just like you. What's your excuse - you only
have yourself to look after.
The So-Called Passive Steps.
- Collect and Account for Money
It doesn't matter how great the product is, how hot the
market is or how much promotion you do. If you don't have
a system for collecting money then you're not making any
income (passive or not). Be sure to have systems in place
from the outset and account for everything. You don't want
to lose all your profits to the tax man.
- Deliver Excellent Customer Service
Again, your job is not over until you have a happy customer.
What extras and bonuses can you give? Have you got the basics
right? Is your delivery process as slick and efficient as
it can be? Unhappy customers will want their money back
and will tell their friends to steer clear so don't crash,
due to a sloppy business model, when it should be plain
sailing.
It's Never Passive Forever
Eventually, after all your hard work is done, sales will
decline. So make it a habit to keep on promoting. It never
stops. To mistake "passive income" with "passivity"
is to see all your hard work come to nothing. Take responsibility
and make it pay. This diagram illustrates the point. http://www.leanmarketing.co.uk/champions/passiveincome-01.gif
Debbie Jenkins, Can you really get more business success
by doing and spending less? The Answer Is Yes! Get FREE Lean
Marketing eBooks worth £24.95 http://www.leanmarketing.co.uk
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