Your Exit Strategy: Creating Passive Revenue Streams in Your Business
May 21, 2008 by Elizabeth Potts Weinstein
Passive revenue streams not only gradually take you out of needing to work hours-for-dollars, but also provides an asset that can be sold, individually or as part of your business.
One principal of passive revenue streams is to convert whatever service or expertise you provide into a product. This information product teaches your system for providing your service. You may sell this product to the people who would have been your clients as a do-it-yourself system or to other professionals in your industry as a franchise, business-in-a-box, or consulting program.
Your information product is not limited to a book or E-book (electronic book, typically in the form of a .pdf or Word document). You may also sell audio or video tutorials or classes as downloadable files or as CDs and DVDs. You may create a membership or continuity program, where customers sign up for months or years to receive information, classes, consulting, or coaching. Your products may be classes, associations, or seminars that teach your system or groups of people who all live by or teach your system and come together to exchange information and support.
Another method is to restructure your business such that you are not providing your service or selling your product; you have a team of people running the company. It may be a team of coaches and consultants who service your clients. It may be a team of virtual assistants who run the backend, and salespeople who sell the product.
The idea is that you are no longer the choke point. When other people are doing all the work, whether they are employees or contractors, you can go on vacation or sell the business, and the work still gets done. This method is passive as to you, the owner, but is not a passive investment in the sense that your staff is still doing the work. Since you are out of the equation, you are free to pursue other projects, sell the business, or generate more revenue for the company.
**The above post is an excerpt from Grow Up! Strategies: The 7 Legal & Financial Strategies You Need to Up-Level Your Small Business (2008).
Tags: Exit Plan & Retirement
This article has a lot of good information. Very interesting.
Amanda