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April 26, 2022

150 | 5 Realities Of “Passive Income” As A Business

150 | 5 Realities Of "Passive Income" As A Business with Annie Miller

Everyone wants passive income but no one talks about what that actually looks like – how you get there, and how you maintain it, what you have to have in place FIRST, so on and so forth.

Today we aggressively pull back the veil on those very topics and considerations. Because passive income is the shit. I love it. I think most coaches in the online health and fitness industry should seek to have some level of it. But I also think people have some unrealistic expectations, largely due to coaches selling “how to build a course and make a million dollars with ease” type of vibes. Perhaps this episode can bring the heads down from the clouds a bit and share just one perspective.

You can take what sits with you, and ignore the rest.

Let us define passive income and the gloriousness of it’s sales pitch – You sit back, and make money while you sleep. That’s the idea. And trust me, this is a huge reason I started my online business. There is time and money freedom is the idea of online entrepreneurship in general. That idea gets magnified when we talk about passive income.

Reality #1: You need a funnel

Don’t run away at the use of that word. Stick with me – You must answer the question of how people are going to find and purchase this thing: the course, the one off product, the tutorial – whatever “it” is. How much does it cost? A funnel is exactly what it sounds like: you have your largest pool of your coldest leads at the top. Maybe that’s a free opt in, download of some kind, could even be a free or low ticket 3 day challenge. You need a low level buy in but there also needs to be a time limit on that. The funnel begins once they put their name and email in the box to receive the low ticket buy in.

Depending on the price of your passive offer, you may be able to ask for the upsell to your offer immediately, or it might require a longer buying cycle – maybe a mid tier offer is made, or sever more pieces of free, valuable content. Regardless, the funnel primes the potential buyer to eventually make the purchase of your passive offer.

If you don’t have a funnel, I want you to consider a few things: Mainly the fact that you’ll need to live launch the thing several times before eventually needing to build out the funnel (which ideally takes over the “selling” process for you – through the automated email drip I described above). Now live launching doesn’t mean it’s not passive income. I will eventually build out a funnel with a free or low ticket buy in workshop series for Pure PROgramming. At this time I will live launch 3-4 times per year, but the payments roll in and then my work is done until students submit their final programs for review and certification. So, that’s an example of a funnel free passive income.

That brings me to the next point that I personally looked right passed back in 2015 when I put the cart wayyyyyyy before the horse. Please learn from my mistake.

Reality #2: A funnel without an audience will make no money

Before you even THINK about passive income, you need an engaged, aligned audience who wants what you are going to be passively selling. I cannot stress this enough. You don’t need 10k or even 5k followers. But an email waitlist of 100+ is highly suggested. That of course is relative to the price point and how many of units you need to sell or want to sell. We can’t just wish, we need to evaluate numbers and be realistic with expectations.

I’d add to this that especially in health and fitness, passive income likely comes second to having worked with several 1:1 clients or in a group setting to where you now see a common gap that needs filling, or issue that many people need addressed. Maybe it’s something that you have found you go through with every single client and this could be an automated course, self study. That knowledge only comes from seeing the need repetitively.

On that note, you need to do extensive market research before putting in the time to create a passive offer because we need to make sure people need/are aware of/and are searching for this thing. One of my 1:1 biz clients had an idea for a course. We polled her audience and there was barely any interest. The creation of this semi-passive offer would have been a waste of her time and energy. We went in a different direction that I am extremely excited about. And there was FARRRRR more interest in that. Just goes back to this point that a funnel or offer in general without an audience will not make money.

Picture the funnel. If you only have 5 humans at the top of your funnel, then we can’t expect to be very profitable as those 5 people drop off through the funnel.

Number three is possibly the biggest misconception when discussing passive income.

Reality #3: You’re still going to work (even with paid ads)

The passive part of passive income comes from work up from and automations. But the work doesn’t stop once its live, the work simply changes. You enter a new season with different demands. But the work 100% does not just STOP. Not if you want to grow and be successful.

This also assumes you’re doing this alone or with maybe one assistant who is helping to manage the passive offer, community and/or funnel. Things that still exist after you create a passive offer. ALSO – this should have been made clear at the beginning but this entire episode assumes for the most part that this passive offer is being created as a main stream of income. Not the only stream, but a significant portion. If you’re just creating a low ticket offer like Movement 101 – which is my exercise encyclopedia, then that is an offer you’re not expecting consistent or large sums of income from. Thus that is passive income but not as a main revenue stream; it is extra or supplementary to other programs and offers.

Okay – things that still exist or need to be managed once you launch your passive income offer:

Client relations and customer service

A community if that’s involved – weekly group posts or reviews of content and feedback.

Tracking numbers – click throughs, sales page or freebie page views, opt ins and conversions.

Means of driving traffic to the passive offer – whether a funnel or stand alone offer. That means consistent organic content creation, or hosting live workshops or trainings in order to upsell to the thing. that can apply in the presence of or without a funnel in place.

Once organic traffic slows, then we look at paid ads, which is a whole other ball game to manage.

Updates or maintenance of the offer.

So yes, passive offers DO free up time, allow potential for making more money, serving more people in less time. Fantastic. They also come with work. And that is totally fine! It is just a reality that gets shoved under the rug sometimes. And perhaps you hire someone who handles everything I just listed. But someone is doing the work either way. Or it’s automated as much as humanly possible – which I always suggest. 

That brings us to number 4.

Reality #4: Automations increase passiveness

Short and sweet here – anything that is repeated should be automated if possible. Obviously tasks like answering client questions or dealing with issues will happen in real time and require a human. But if anything can be automated, that’s where the “passiveness” piece can grow. Automation frees up time and space. To do nothing, or to do other things. That is what we’re after.

Reality #5: Upfront work with no promise of success

The biggest and scariest truth of them all in my opinion. There is no promise of success and you will pour your heart and soul into this offer. It’s terrifying and so exciting and also why doing your market research and being as sure as you possibly can be that this offer is NEEDED is so freaking important. You can mitigate some of this fear by building a waitlist ahead of time. You can even do pre-orders before you build the thing. There is not limit or right or wrong here. But fact is more often than not that you are putting all the hours in up front in hopes that you’ll eventually be repaid – immediately upon launching or for years to come.

People see someone launch something and the DM’s roll in – OMG get it girl – you just made bank” – it happens to me, it happens to my clients. But we spent MONTHS, even YEARS constructing what we just launched. Of course you can create something faster than that. It totally depends on the offer! But still. The reality remains, the point is to create something that continues to pay you back for years – far beyond that first reveal.

Do it for the long haul.

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I'm an adventurous introvert from Vancouver, Washington who lives on sleep + "me time." I'm a lover of lifting weights, dinosaurs, real talk and traveling with my husband. I am here to help you move better, lift more, bust the myths of the fitness industry, and inspire you to love the process.

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