You're a consultant, right? So lets' talk about your business revenue. How do you balance passive vs. nonpassive income strategies?
If you’re a consultant or freelancer, you’re probably focused mostly on nonpassive income strategies. In other words, your business model is trading time for money. You can make a lot of money using this business model (just ask Accenture or McKinsey & Company).
But if you’re a solo consultant or other small consulting shop, chances are you’re wondering if there are ways to increase your revenue without committing more time to your business (and without hiring additional consultants). The answer is yes! In this article, we’re going to compare passive vs. nonpassive income strategies for your consulting business.
What Do We Mean by Passive and Nonpassive Income Strategies?
Nonpassive income strategies are those strategies where you are trading time for money… meaning you are charging money in return for your time by the hour, or in return for your time working on specific projects. Thus for the most part, nonpassive income means all of the money you earn as a consultant or coach.
Passive income strategies are those strategies where you are creating something once and then selling it over and over again. For example, you could create webinars, e-books, or online classes and sell them on your website, making money from repeated sales even though you only had to create the product one time.
Which Type of Income Is Better?
First, you may be wondering which is better when it comes to passive vs. nonpassive income strategies. The answer is: it depends. I know that’s an unsatisfying answer, but it’s true.
If you’re a consultant who enjoys working with clients, is making enough money, and does not need to dramatically increase their income… then nonpassive income (trading time for money as a consultant) is fine. On the other hand, if you’re a consultant who wants to make more money but is maxed out in terms of time and resources… and who doesn’t want to hire any other consultants… then passive income is for you.
When it comes to passive vs. nonpassive income strategies, my experience (and my personal recommendation) is that every consultant and freelancer should start building passive income (even if you are mostly focused on serving clients and building your consulting practice).
How to Balance Passive vs. Nonpassive Income Strategies
As a consultant or freelancer, you may be wondering how to balance passive vs. nonpassive income strategies. My best advice to you is to focus on both.
If your bread and butter is consulting and coaching, don’t stop doing that. Keep finding new clients and building your consulting business. But… and this is extremely important… start adding info products like e-books, webinars, and classes into your revenue mix.
Adding passive income like e-books and webinar sales into your revenue mix will provide two fantastic results for your business: first, you’ll generate more revenue, and second, you’ll actually be able to increase your consulting fees because you’ll be a well-known author of e-books or creator of online classes.
Passive vs. nonpassive income strategies isn’t a zero-sum game. When you combine passive and nonpassive income strategies in your consulting or freelance business, you’ll be able to dramatically increase your revenue and benefit from both your consulting practice as well as your sales of information products via your website and beyond.