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Passive income is often touted as a strategic way to accumulate extra cash with very little effort. Some types of passive income can even be utilized to increase the cash flow into your business.
This extra money, combined with the minimal effort required to keep related systems running, can greatly improve your bottom line. If you’re looking to implement a passive income stream to support your business, here are 15 proven ideas on how to do it from members of the Forbes Business Council.
1. Set up your network
By definition, passive income means you earn money by doing nothing or very little. Taking the time to properly (“properly” is the key word) building an affiliate network and close affiliate partnerships can often lead to very good income. One of the important things to remember is that your proposal should be attractive for a long time. – Gennady Feller, Safe Partner, Inc.
2. Bring operating costs in-house
Turn your cost centers into profit centers. See what the biggest operating costs are in your business, and see if you can bring that in-house, maybe even charge someone else for the service. It can be as simple as buying a building and paying rent or even renting extra free space. Or, if you handle shipping logistics, you can set up your own warehouse instead of paying a company for the service. – Aircraft Supervisor Daniel Gizzi
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3. Monetize your video content
There is no magic solution to generating passive income, but we are currently in a content-driven world. Start producing video content that matches your brand and product, and start posting on TikTok, Instagram Reels, Facebook, and YouTube Shorts. These platforms allow you to monetize your profile, and you can even earn a steady income by creating high-quality (and preferably evergreen) content. -Myke Metzger, stoqd.co
4. Create a blog and sell ads
There are several ways to create passive income. Create content or blog. Selling ads can be effective if you have reasonable traffic to your website. Signing up as an affiliate marketer is also a high-leverage tool for generating income. – Gordon Smith, Biproxy
5. Incorporate affiliate marketing
One of the best ways to create a stream of passive income is affiliate marketing. This is a winning proposition for online content creators such as influencers and editorial sites. They can earn long-term passive income through affiliate links that are naturally integrated into their content, while also continuing to earn commissions on any sales driven long after posting. – Adam Ross, Arwin
6. Use business savings wisely
By investing your business reserve funds in short-term treasury bills (which pay a reasonable income now) and then taking out portfolio loans against those securities to buy more fixed short-term investments, you can essentially earn close to twice as much as traditional investments portfolio. This can result in an annual income stream of 4% to 6% for short-term funds. Liquidity risk does exist. – Dana Cornell, Cornell Capital Holdings
7. Earn commissions through channel relationships
One strategy is to sublease commercial space; extra space is very common these days. The other is to purchase commissions through channel relationships, which requires very little effort but pays handsomely. Unfortunately, both still have collection issues. Avoid cash flow problems by improving the relationship between income and expenses. Try to use a minimum 3 to 1 ratio between cash and payouts. -David Nugent, Next League
8. Build a community of members
Building a community of members using the collateral you’ve already created is a great way to develop a passive income stream. It’s also a great way to provide content to your members so they can learn about your company without the barrier of high-priced services. Hopefully they know, like and trust you through their membership and buy a pricier package because of it. – Angie Noll, Coordinating Solutions
9. Promote other brands on social media
A great example of a passive income idea that generates cash flow is leveraging social media accounts for online advertising once you have established your online brand and reputation. Help promote other brands, giveaways, sweepstakes, and partner discounts on a per-post basis or through revenue or profit sharing arrangements can help you monetize your existing digital marketing platform quickly. -Armand Peri, New Age Public Relations
10. Invest in mortgages or stocks
Passive income streams can come from mortgage investments for rental income or stock investments for dividends. Plus, by writing a book, you can enjoy paying book royalties. – Lere Baale, Netherlands International Business School
11. Create Evergreen Online Courses
Create courses related to your business for people to learn online. If you’re in finance, you can share stock-picking advice, and a business leader can teach a course on entrepreneurship. It’s also a great way to reach a wider audience. Make sure to choose an evergreen theme. If you have to update content every month, it’s not reactive anymore. -Deyman Doolittle, ShipSigma
12. Work with a curriculum expert
When the internet emerged as a business tool, some experts dubbed it the 24/7 “silent” salesman. Since then, many have learned how to create online educational courses based on their expertise and put them online for passive income. Many work with others in related businesses (affiliates) to advertise courses and earn passive income from commissions. powerful! – Jerry Caan, Age Brilliant
13. Consignment Inventory
Consignment selling old, unused or slow-moving inventory is an excellent way to generate passive income. Owning consignee warehouses and shipping products at a reasonable cost can improve bottom line profits while also reducing overhead costs. With the growing demand to buy and sell products online, e-commerce fuels these fulfillment business models. -Joe Faruqui, ASAP Semiconductor
14. Leverage Referral Relationships
Referral relationships are a great way to generate passive income. Your customers are the intrinsic audience for adjacent products and services, so if you maintain a high level of customer trust, many will be happy to follow your advice. Many partners will happily pay someone just for an introduction. Remember to choose your partners carefully. Each suggestion also reflects your reputation. -Ian Bouchert, Edgr
15. Don’t neglect your main business
Only a few business models benefit from passive income. Few activities worth the owner’s time can be considered truly “passive”. If you focus on a side hustle, you risk missing out on opportunities in your main business that might make your time more valuable. —Annalisa DeMarta, Ridgeline Insights