Passive income business systems

Future of Work, Future of Work - Money making ideas

30+ Passive income business system ideas

Passive income can be generated on auto-pilot when you own a business system. These systems can either be offline (bricks and mortar business) or online (an Internet business).

Bricks and mortar, offline business

If you love to deal with people face-to-face, you could own a brick and mortar, a traditional street-side business, or a retail store with a physical location that sells products or services. You hire employees to work for you. They follow systems and processes that have been developed by you, as the business owner.

Pros and cons

One of the biggest advantages of owning a brick and mortar business is your physical location. It actually serves as marketing in and of itself. If you pick a good location, people will drive or walk by your store or business.

For many businesses, the location combined with good word of mouth is all the marketing they need.

Having a physical presence increase the legitimacy of the business. People are more willing to trust businesses that have a physical presence so that they can walk into. Being able to speak with your potential customers face to face can be helpful as well.

The expense for rental, employees’ salaries, fit-outs, and inventories can lead to much higher startup costs for brick and mortar businesses. If you are just starting out, perhaps you should consider trying out lower-cost alternatives to test the market.

Another disadvantage is that brick and mortar business owners usually work super long hours, at least in the beginning (or maybe as long as they own the business). Most likely, you cannot own this type of business on a part-time basis whilst working as an employee somewhere else. It’s more likely a full-time commitment for you.

The key to avoiding this is to be able to delegate responsibilities to your employees and trust them to make the necessary decisions. This could be the hardest thing to do for any business owner.

Vending machine operator

If you have money to invest in vending machines that can sell virtually anything, you can start small and build your operation as you generate cashflow.

The key to a profitable vending machine is the location. This is followed by the type of products you sell using these machines.

Apart from vending machines at train stations or shopping centers, most machines are in offices. A busy office tower where people don’t want to go downstairs to get a snack is perfect for your business. If it’s a manufacturing or industrial area location, it’s ideal when the location is slightly isolated.

Coin laundry, or laundromat

If you have money to invest in a laundromat, this could be a part-time business venture you can embark upon whilst keeping your full-time job.

Laundromats run themselves. Customers provide their own labor. Aside from washers, dryers, and plumbing for these machines, there are not many things to invest in.

Online Internet business

If you have time and a bit of money, start an online business that uses the Internet to sell products, services, or advertising. You can be a part-time business system owner whilst in full-time employment.

Like any other business venture, it takes time and effort to have a profitable and sustainable online business.

It’s very common that people contemplating starting an online business to ask these questions:

  • How fast can I launch an online business?
  • How ‘well’ can I launch my online business?
  • How long after launch is it going to take to make money?
  • How can I add value to my niche and target customers? (You must have something unique to offer your customers. Otherwise, don’t even bother with starting an online business. Focus on doing something that is difficult, hard or time-consuming. If it’s hard for you, it’s probably hard for everyone else as well.)
  • How hard is it for someone to copy or replicate my business?
  • Do I want to be able to run my business from anywhere?
  • How much time and effort can I consistently devote to working on my online business, especially after a long days work?
  • Do I want the business to scale easily once it grows to a certain level?
  • What is the long-term viability and sustainability of my business and revenue streams?

Remember that an online business is NOT a get-rich-quick scheme.

Pros and cons

The low start-up cost is a good reason to get into an online business. You can get a simple website up and run for a few hundred dollars. In fact, you don’t even need your own website to get started.

Amazon, eBay, and Fiverr are just some popular online marketplaces where you can immediately sell products or services without any large upfront investment in technology. They are inexpensive to try out.

If you fail, you didn’t risk that much upfront expenses, to begin with.

Working at home (or anywhere you want) is another great perk of owning a web-based business. It offers convenience and freedom that you don’t get from running a brick and mortar business. Not having to commute saves a lot of time and money.

In this kind of business, it will go on as long as you want it to and as long as you are able to put your fingers on the keyboard. You’re not forced to retire at a certain age, unlike certain jobs.

No technical expertise is required. These days you can launch an online business at the touch of a button.

You can hire virtual assistants to do stuff for you. Here are just some of the things you can hire a virtual assistant to do for you:

  • Customer Service: Answering emails and phone calls from customers.
  • Social media management: Curating content, replying to comments, and other community management tasks.
  • Research: Looking for a list of bloggers or influencers to reach out to or curating stats or examples you can use in a piece of content.
  • Store management: Order fulfillment, inventory management, running sales for you (you can find VAs that have experience with Shopify, specifically).
  • Data-entry: Bookkeeping or inputting data from different sources into a spreadsheet.
  • Cold calling: Making cold calls (usually provided with a script and canned responses to common questions), and scheduling meetings between you and prospects.
  • Personal errands: Getting flowers bought and delivered to your mom for Mother’s Day.

One of the biggest drawbacks is that you cannot benefit from people finding out about you through a physical location. You need to actively market your services, products, and website. Otherwise, no one will know you exist. The Internet is a very big place.

Blog publishing

Short for ‘weblog’, blogging refers to a list of entries posted on an Internet page. Anybody who knows how to create and publish content or information on an Internet page can publish their own blog.

Find a niche that you have practical solutions to solve your reader’s problems and write about it. By solving their pain points, your blog will attract readers and Internet traffic. Your readers will require well written, valuable, and knowledgeable content.

Pick a small but well-searched-for section of the market. Write specialised content about it. By doing this, you attract a loyal group of followers interested in your content.

With Internet traffic and loyal followers, come the opportunities to earn money from your blogging activities. Traffic is the lifeblood of your blog. Without traffic, you can’t make money.

You could monetise your blog by selling your own products and services, affiliates’ products and services (affiliate marketing), and advertisement. Remember that not everyone is going to click through and buy your products. Only a small percentage that will do so.

To generate a large audience takes time, commitment and a lot of hard work. It can take a couple of years before your website has enough content and viewers to make a reasonable income for you.

Key questions to ask before starting a blog

If you’ve ever thought about starting a blog, you must ask yourself these questions:

  • Do I like to write?
  • Can I stick or commit to a regular blogging and writing schedule?
  • Do I like to market and self-promote my content and website?
  • Do I like interacting with and reaching out to people (e.g., commenters, influencers, competitors, etc.)?
  • Will I continue blogging even if the blog doesn’t make money?
  • Do I have solutions to solve peoples’ problems or pain points?

Word of caution: A lot of people recommend starting a blog. Unless you absolutely love writing, blogging may not be a viable business for you.

The Internet and social media marketing

If you are good at marketing, advertisements, and sales, Internet marketing can be a good source of income for you.

Internet marketing, or online marketing, refers to advertising and marketing efforts that use the Internet and emails to generate traffic and convert them into sales.

It overlaps with affiliate marketing to some degree because affiliates offer services or products on the Internet for you to sell to your customers.

Internet marketing compensation methods:

Here are some sites you can sign up to become an affiliate:

Pros and cons

Internet marketing has low start-up and operating cost. If you can automate your business and its processes, customer acquisition and sales will basically be on auto-pilot.

Because all internet marketing can be tracked using tools like Google Analytics, people can be more responsive to your marketing efforts over time as you test and modify your approaches to generate sales.

Internet marketing builds communities around responses, which drastically increases repeat sales.

If there is no established system, you need to educate yourself and develop one yourself. This will require Internet and technical expertise.

Internet marketing relies on customers being highly interactive on the Internet. If a customer doesn’t use the Internet often or not at all, you can lose them as a potential customer.

Mobile application development

If you are technical and can develop a mobile application, you can earn money every time someone downloads it from Apple Store or Google Play.

A mobile application, or commonly referred to as an ‘app’, is a type of application software designed to run on mobile devices such as smartphones or tablet computers. Mobile applications frequently serve to provide users with similar services to those accessed on personal computers.

Categories of apps include utilities (e.g., calculators, notepads, communication apps, weather apps), entertainment, games, news, productivity (e.g., finance apps, calendars, translators, grocery list makers), lifestyle (e.g., fitness, travel, food and drink, dating), and social networking.

Pros and cons

There is a high percentage of people who use smartphone technology and are mobile application savvy. Mobile applications keep your brand prominent in the marketplace. They help increase customer retention and loyalty. People tend to spend longer on mobile application than on websites.

Mobile application technology allows you to demonstrate products and services more creatively. They connect with customers, provide more in-depth information and give users a better customer experience.

Mobile applications need to be made to suit each platform, Android, Windows, iPhone, etc. which can be costly and time-consuming. They require on-going content and technological updates, which you need to be committed to doing.

Application developer

If you spot a niche that hasn’t been filled and you can learn, have the required coding skills, or know someone who already has them, you could be on to something like an application developer.

It’s possible to build a mobile application without any coding skills whatsoever.

Application tester

If you like testing mobile applications or trying out new ones, you could make money by offering your testing services to developers and designers.

Earn royalties from creative assets

If you’re a talented musician, artist, actor, or author, you could earn royalties from your creative work.

Royalties are payments made by licensees (organisations or individuals) to licensors in exchange for the right to use the intellectual property owned by the licensor. People pay you as a licensor for using your creative work and intellectual property.

For example, computer manufacturers pay a royalty to Microsoft, inventors of the Windows operating system, in exchange for being allowed to use the Windows operating system in their manufactured computers.

Visit websites like Royalty Exchange where you can buy and sell royalties, especially in arts and media.

There are different types of royalties you can make money from:

  • A Patent is an intangible asset that gives the owner an exclusive right to prevent others from using the patented technology or process. Patent protection is country specific. Patents are granted by the patent office for a specific duration and specifications.
  • Trade (or service) marks includes words, logos, slogans, sounds, or other distinctive expressions that distinguish the source, origin, or sponsorship of products and services.
  • Copyright law gives the author or owner the right to prevent others from copying, creating derivative works, or using their works in specific geographic or market territories, or by more specific criteria.
  • Book publishing royalties are paid by the book publisher to the author.
  • Music royalties apply to composers (score), songwriters (lyrics) and writers of musical plays. (see below)
  • Software royalties apply to software development and usage.

Industries in which royalties are frequently paid include:

  • Fashion industry – Designers such as Ralph Lauren and Calvin Klein license the right to use their names on items of clothing in exchange for royalties.
  • Book publishing – Authors are commonly paid based on a percentage of sales price.
  • Music industry – Royalties are paid to music copyright holders and songwriters by radio stations and anyone else who derives a commercial benefit from the copyrighted music material. Types of music royalties includes: (1) performance rights license allows the music to be performed live or broadcasted; (2) mechanical license refers to permission granted to mechanically reproduce music onto some type of media like CDs for public distribution; (3) synchronisation license applies to songs reproduced onto a television program, film, video, commercial, or radio; and (4) print royalties are paid to songwriters and publishers based on sales of printed music sheets or books.

Pros and cons

As a royalty rights holder or owner, you get to enjoy regular income streams from the use of your creative work during the protected period.

It’s costly and time-consuming to get protection in each geographical area you want your creative work to be protected. You need a local patent lawyer to file your application in different jurisdictions. For example, if you want your creative works to be protected in the US, UK,  and Australia, you need to separately file your patent claims in three patent offices, incurring three sets of filing fees and legal cost in doing so.

Even if you have legal rights over your creative work, you need to incur a significant cost of defending the unauthorised use of your creative work in those registered jurisdictions when someone else uses your work without your permission or paying you.

Build custom software

If you can design, code and test custom software or application, you can build customised software to meet your customer’s requirements and get paid for it.

Build a Chrome (or web browser) extension

If you have experience in developing Chrome extensions (or any other browser extensions), you could sell them on Google Chrome’s marketplace or on your website.

There’s a huge opportunity for creating a useful extension for people to use while browsing the web. For example, a Chrome extension, Yet Another Mail Merge, enables you to send bulk customised emails from within Gmail and Google Sheets.

Patent, trademark and copyright services

If you have experience with patent, trademark and copyright writing, filing, and application, you could provide professional assistance to businesses that want their intellectual properties registered and protected.

You may need to be qualified or registered in the countries you are working in or want protection.

Network marketing

Network marketing (multi-level or direct marketing) involves a direct selling method. You are considered an independent-agent who serves as a customer, marketer, and distributor of products or services.

Some of the best-known companies in America, including Avon, Mary Kay Cosmetics, and Tupperware, fall under the network marketing umbrella.

Commissions are earned on the agent’s own sales revenue and the overall sales revenue of all down lines or independent agents within the agent’s own network.

Network marketing can be:

  • Single-tier – You do not need to recruit other agents and you will be paid if you make a direct sale.
  • Two-tier – You are paid for direct sales made by you and for direct sales made by agents you recruit within your own network.
  • Multi-level – You can make money from two or more tiers deep.

Network marketing typically involves using four basic types of strategies to make money:

  • Lead generation – Find new prospects who are interested to use and promote the network company’s products or services.
  • Recruiting – Signing up and adding new customers and independent agents into your own network.
  • Testing, using and promoting – You are expected to buy and test products or services you are going to promote. You are a living testimony to them. It will be difficult to recommend products or services to someone else if you have not used them yourself. These products or services can be expensive. You require money to invest into these items even before you make any sale.
  • Building and management – These are methods you use to train, motivate, and manage your recruits or downline to generate new leads, to recruit new agents, to improve product or service knowledge, and to learn about the business and overall systems and processes. You may be required to attend regular meetings and seminars where you are expected to buy tickets for yourself and for others within your own network. These meetings are training and networking sessions.

Pros and cons

If the network company is big, you will have instant and direct access to the brand recognition, establish systems and processes, experienced mentors and trainers, structured training and skill development. It has a very low start-up and maintenance cost, especially when compared with bricks and mortar companies.

You may be competing with thousands of other agents or ‘consultants’ in your local area. This may be a problem especially when your circle of friends is small. Look for a network company that has few sellers in your local area and has great products that are in demand.

If you can’t handle rejection (especially from your family members and friends), you may be in for a tough ride. Not everyone who shows interest in your products or services will act. In fact, most won’t. You must be able to handle rejection and carry on with promoting your business to other people.

Depending on the commission model, structure and arrangements, most people don’t get rich through network marketing. There are ongoing costs are the cost to attend meetings, traveling cost when you travel to your prospects house or meeting location (sometimes interstate), buying products and services to test and use, and buying minimum quantities of products and services as a precondition to remain in the network marketing.

Beware of scams. Do your own research and due diligence when investigating an opportunity in network marketing. Look out for red-flags like lack of product range to sell, outrageous and unfounded product claims, high-pressure sales tactics, pressure to buy inventory up front, lack of transparency to your questions, pressure to pay for training and business items, practice deceptive advertising and marketing, you don’t know the company name up front w when an invitation is made, use of deception to get you to hear their marketing messages, and unsettling feeling within you.

The bottom line is that you totally need to believe in the products and services you sell, the company you represent, the company’s trainers and mentors you rely on, and the system you are going to use to make money.

Gaming

If you enjoy playing computer games, this can be a great way for you to earn some extra cash.

The common video game genres and sub-genres include action, adventure, role-playing, simulation, strategy, and sports.

Pros and cons

Contents in violent video games can be stored in players’ head. It makes them more likely to act out the violence in video games. They may think that it’s fine to become violent to family and friends. These violent games have been blamed for school shootings, increases in bullying, and violence towards women.

It’s argued that violent video games provide a safe environment for aggressive and angry feelings and that will help reduce crime.

Game shop

If you like sourcing, trading or exchanging gaming items or gaming ‘currency’, you can create a website where you sell these items or currency to customers.

Marketing and selling games

If you are good in marketing and advertising games on behalf of programmers, you could sell your marketing services to programmers.

Programming a game is one thing. Advertising and selling are a whole different skill set for programmers. Programmers need someone to do the marketing and distribution for their products. They most often do not possess the necessary skill to get their games to their customers.

Monetising a gaming blog

If you like writing about games and the gaming industry, you could start a gaming blog that targets a specific niche of the gaming community.

Playing games

If you are an expert gamer, you can get paid for playing games.

Visit websites like Clip2Play, PaidGamePlayer, Pogo, and SecondLife.

Produce unique gaming tutorials

If you like creating gaming tutorials and walkthroughs, you can make some money here.

People do get stuck in games or like to learn useful tricks and tips.

Review and recommending games

If you like comparing and reviewing games, you could provide your expert commentary and recommendations on different games and strategies.

Testing games

If you like testing or trying out new games, you could make some money playing and testing games for developers and programmers.

As a game tester, you will be playing an unreleased game. You are expected to look for bugs and document them for the programmers. This will require a different skill set.