When owning a business, it can sometimes be difficult to predict how much money you’ll have coming in from month to month. For some trades, there may be months where you struggle to get business at all. Generating a passive income allows to get some money coming in on a regular basis without having to any hands-on work.
All business owners can benefit from having some form of passive income for those periods when business is slow (if you experience a major disaster in which you have to shut down your business, a passive income could also ensure that some money is still coming in during this period of closure). Here are just a few ways to generate a passive income.
Open a high-interest savings account
Putting a large lump sum of money in a savings account could allow you to generate some interest off of it. This could allow you to earn some extra money without having to do anything.
Even if the most high-interest accounts, you won’t make a lot of money. Banks may offer high-interest accounts that may require a large minimum holding fee or regular payments into the account. You can also look beyond brick-and-mortar banks – online banks can sometimes have higher interest rates. There’s also the option of company bonds and government bonds where you can earn a lot of interest. Sites such as https://www.businesscomparison.com can help you compare accounts.
Invest in real estate
Property investment is another great way to earn a passive income. The most common way to do this is buy-to-let property – by renting out a property to tenants, you can pay off the mortgage and make a little bit of profit on top each month.
You’ll want to choose the right property and the right tenants in order to get the best out of your investment. As property owner, you’ll be responsible for making repairs – buying a property in good condition can reduce the risk of costly wear and tear repairs. As for choosing your tenants, it’s worth screening tenants beforehand to ensure that they’re likely to make rent payments on time and not mess you around (references from previous landlords and credit checks are the most common form of screening).
The property could be somewhere nearby so that you can easily go round and make DIY repairs when needs be. Alternatively, you could look for a property abroad as found at sites such as https://rumahdijual.com/bogor/ – you could then hire a local person to act as property manager and attend to repairs. Some people like to rent through an agency – this means paying regular agency fees, however it could allow you to leave most of the admin such as screening and organising viewings in the hands of the agency.
Try your hand at other investments
There are many other forms of investment that could provide you with a passive income.
Buying company shares is a common example – this can allow you to get a slice of any future profits that the company makes. Whilst the initial costs of buying a share can be expensive, you’ll make a lot of money in the long run, providing you choose the right company to buy shares from.
Peer-to-peer lending is another way to make a passive income. This involves giving out a loan to someone and then getting this money paid back through monthly instalments with interest attached. Interest rates on peer-to-peer lending platforms can range from anywhere from 7% to 18% allowing you to make a healthy profit.
To help make the best investment, you may want to seek the help of an investment broker. These professional can help advise you as to the best places to put your money, however they may charge a small fee for their service. Robo-advisors such as https://www.betterment.com/ can also help to advise you by offering unbiased advice based on hard facts, although be prepared to also pay a small fee to use this type of software.
Rent out office space/equipment
You may also be able to make a passive income by renting out office space or equipment. If you own your business property, it’s possible that you may be able to rent out part of it to another company. You may even know someone who is willing to rent out a single room to use as an office for their small business. Alternatively, you could rent out space for storage – if you have a warehouse with extra space you could allow someone to store their business or personal belongings there for a small monthly fee.
As for renting out equipment, you may have specialist machinery or tools that you rarely use. Renting this out to other companies when you’re not using these tools could help you to make some extra money (for example, if you own a cleaning company and own a carpet cleaning machine, you could rent this out to homeowners or other cleaning companies for single use jobs).
Start a subscription service
It’s possible that you may be able to make a passive income through subscription customers. Club memberships are a common way of doing this – for a small monthly fee, you could allow people to become a member. This could result in various perks for the customer such as discounts or access to exclusive products and services.
There are many other ways to earn a passive income in a similar fashion to a subscription service by offering perks in exchange. For example, you could offer an extended warranty to your customers – in exchange for them paying a small amount each month, you can guarantee them free returns/repairs. If you deal with big transactions, you could also consider setting up instalment plans – instead of paying all money upfront, these could allow customers to pay for big purchases in instalments. You could even charge interest on these instalments.
Generate ad revenue
It’s also possible to make money through advertising revenue. By allowing ads to run on your website, you could make some money through ad revenue for every person that clicks on these ads. Another way of making ad revenue could be to start making Youtube videos – if you get enough views, you’ll be able to place ads on your videos and make money in a similar fashion.
In both cases you need to be getting a lot of web traffic in order to make any serious money. You can find out more about allowing ads on your content at sites such as https://support.google.com/google-ads/answer/6349091?hl=en-GB.
Make money through royalties
When it comes to creative content such as photographs and music, it’s possible to charge other people for using this content. These payments are known as royalties and they can be another great way of making a passive income. Of course creating artistic content that sells isn’t easy – many musicians and photographers struggle to make any money through royalties in the internet age. Using platforms such as Spotify and Shutterstock you can get a better chance of earning royalties – these platforms will charge commission, so bear this in mind.
