We are so excited to introduce Episode 011 of With Grace and Gold: The Podcast – a business education podcast for small business owners and entrepreneurs. With Grace and Gold: The Podcast features 5-minute episodes with clear, actionable steps to guide you toward successful small business ownership. Listen on Apple Podcasts, Anchor, Spotify, or elsewhere!
Your Passive Income Action Plan
Just as in life, small businesses have seasons — busy seasons, quiet seasons — and even seasons of working on our businesses, and in them. These seasons can create hills and valleys — schedule-wise, revenue-wise, and peace-of-mind-wise. These hills and valleys aren’t always easy to journey through.
As business owners, we create our own schedules and our own structure — in seasons like the one we’re in now, not knowing what to do next can feel overwhelming. You might have questions like: How can I create consistency in my business all year long, and therefore, experience more peace of mind in my business?
Today, we’re exploring a passive income action plan. Based upon our experiences at With Grace and Gold, we’re sharing how we recommend approaching passive income and diversification within your business.
Welcome to Episode 11: Your Passive Income Action Plan
Let me begin by saying, it’s natural to feel overwhelmed by today’s current events. It’s natural to be concerned about what a pandemic could mean for small business owners like you and like me. But today, I read a quote Jasmine Star shared on Instagram, and it said: “Focus on what you’ve built, rather than be distracted by what you could lose.”
So, in today’s episode, we want to do our part to help you focus on the awesome business you’ve built — to help you continue to build your business strategically, so you can experience peace of mind about your business, so all of our businesses can be better equipped to weather any storm.
Let’s begin by defining diversification: Diversification is the process of a business varying its range of products.
Now, let’s define passive income: Passive income is income derived from an enterprise in which a person is not actively involved. In other words, if your business is earning money through the sales of a product your presence isn’t needed for, you’re earning passive income.
At With Grace and Gold, for example, we offer brand and web design services, a template shop, a designer education shop, and a designer workshop. All of these areas of our business generate revenue in unique ways, in unique seasons. But simply having this variety of offerings helps us to create consistency and peace of mind in our business, because, ideally, if something internally or externally changes, we have other areas of our business we can build up, focus on, and rely on.
Like any decision you make in your business, adding layers to your business should be done strategically — with purpose and with a long-term plan. Creating a minimum viable product — or a simplified, basic version of what you’re hoping to offer — can help you to be extra certain there are customers seeking out and willing to pay for what you have to offer. As small business owners, our resources are often limited, so testing ideas and creating a minimum viable product can help to ensure you’re using your resources wisely and help you avoid creating a new layer of your business from a place of fear.
All that being said, we’re excited to share Your Passive Income Action Plan: a plan we recommend following when adding new layers to your business, diversifying your business, and pursuing passive income.
Step 1: Ensure the foundation of your business is as solid as can be. It’s kind of like sports or the arts: having the basics down matters. Your brand, web design, services, process, and client experience should work like a well-oiled machine. That way, as you add new layers to your business, the foundation of your business is rock-solid. You can strategically bring your attention to these new layers of your business, knowing you can rely on the foundation of your business to run well. What this looked like at With Grace and Gold was: We created a system for every area of our business: our design services, our social media marketing, our newsletter marketing — each and every daily task at With Grace and Gold. We then allowed ourselves a couple of years to simply run our business — to work the kinks out, to gather and apply client feedback, and to ensure we’d done everything we could to solidify the foundation of With Grace and Gold. So, ensure the foundation of your business is as solid as can be.
Step 2: Get to know your Ideal Client or target customer. Your business not only exists to offer products and services — but it exists to offer products and services your Ideal Client is searching for and is willing to pay for. Get to know your Ideal Client: What problems do they face? What needs do they have? What resources have they been asking you for? To better ensure the success of the passive income resources you create, be sure they align with what your Ideal Client or target customers are looking for. Your products should solve a problem your Ideal Client knows they have. Your Ideal Client should be actively seeking a solution to their problem, and willing to pay for the solution.
So, what should you create, and how should you create it? Stay tuned!
[Ad: If you’re a design business owner too, you know there’s so much more to being a design business owner than design. We created The With Grace and Gold Workshop to guide design business owners through creating a successful, sustainable design business from the inside out. The With Grace and Gold Workshop is a one-of-a-kind online educational experience for designers. Visit withgraceandgold.com/workshop to learn more.]
Before the break, we talked about preparing your business for the process of diversifying your business through the addition of passive income sources. We talked about how to set your business up for success — to build a strong foundation for your business, and to have a well-rounded understanding of your Ideal Client — their problems, and their needs.
Now, what should we create, and how should we create it?
Step 3: Determine where your gifts and where your clients’ needs collide. Is there a way you can make the service you offer into a product? For example, at With Grace and Gold, we offer custom web design — so we’ve made our service into a product through the creation of pre-designed, customizable website templates. Clients can choose to work with us one-on-one for custom web design, or, they can DIY their web design and purchase a customizable website template at their convenience.
If you’re already a gifted service-provider, how can you make the service you offer into a product?
A social media manager might offer one-on-one social media management and offer downloadable resources, guides, or courses to help people DIY their social media management.
A wedding planner might offer one-on-one wedding planning services and offer downloadable resources, guides, or courses to help people DIY their wedding planning.
A stationery designer might offer custom stationery design services and offer templates or pre-made designs as a more affordable option.
One concern might be: Am I losing money by offering a less expensive, DIY option of my services? And our answer, based upon our experience, is: No. A certain type of client wants the one-on-one service you have to offer, and a different type of client wants to DIY their own experience. The beauty of developing a product based upon your services is: you can serve your audience in a broad way. You can meet your Ideal Clients where they are in their journey and be able to offer them a solution, whether they choose your one-on-one service or your product.
These offerings can work hand-in-hand and serve your audience in a well-rounded way. In our experience, the easiest way to come up with a passive income stream for your business is to think about what you’re already doing — what customers are already showing an interest in and paying for — and creating a product based upon it.
Step 4: Create with purpose. Before creating an entire suite of products, create one product at a time. What is your audience’s response? Gather and apply their feedback to ensure what you’re creating is a reflection of what your audience wants and is willing to pay for. Carefully determine your product name, price, description, and product photography — and gather reviews. That way, you can present your product and future products in a well-rounded way.
Step 5: Lastly, build systems. Just like your service-based business has systems in place, the product-focused area of your business will need systems, too. Develop a newsletter list or newsletter segment with your customers in mind. Develop a marketing strategy within your business, so you can bring attention to your passive income products on a regular basis. Develop a system for following up with customers to ensure they’re satisfied with their purchase. When you put systems in place, these products can have a regular presence in your business. With time, you’ll grow comfortable with your diversified business, and you’ll feel comfortable adding more and more layers to your business with purpose and strategy.
We are so hopeful today’s episode, Your Passive Income Action Plan, helps to guide you toward diversifying your business in a strategic way.
If you enjoyed today’s episode, please subscribe, leave a review, and send us an email when you do. One random reviewer is chosen every week to receive a gift from our team to yours!