Sources of Passive Income for Business Owners

Owning a business provides many opportunities to create sources of passive income that interconnect and enhance your business. Passive Income is income generated from sources that require some upfront work and provide a steady stream of income without additional work.

Purchase Rental Property

I know that I hate writing my monthly rental check because the money that is virtually thrown away. I feel that business owners should consider owning their business’s property.

Owning your property is like paying yourself. To maximize the benefits of commercial property ownership, you should setup a separate entity (corporation, LLC) for the management of the property. Your current business should still pay rent every month to this separate entity. There are too many reasons for setup a separate business for the commercial real estate to explain here. Speak to your accountant about your best options and the benefits.

If you have multiple individual units to rent, then you are creating a great passive income stream. To reduce the amount of your time invested in managing the property, you can hire a property management company to manage the details.

Vending Machines

Placing vending machines at your business is a great form of passive income. Since I own a Martial Arts School, we offer water and energy drinks. Coca Cola provides and services the machine FREE as long as you purchase the drinks from them. The cost per case is cheaper than you can get in a store.

Our vending machines earn about $60 per month. We need to fill the vending machine only once every month although we could easily let it sit for two months without any problems.

Don’t limit the vending machine idea to drinks. It could be a snack machine, gumballs, or “a grab a stuffed animal with a claw” game. Take a step back, look at your business, and find the machine that fits.

Fund an IRA

This is a no-brainer. Investing money in mutual funds, stocks, and bonds generates a passive income over the long run. This means investing for the long haul – no day trading.

I recently read many blog posts about investing and market timing. I believe market timing is difficult because we do not have a crystal ball to read the future.

But…

Here’s a method that I use to discipline myself to buy low and sell high. First, pick mutual funds you wish to purchase, preferably in different asset classes. Then, decide the percentage of your total you wish to invest. Finally, at the same time every year rebalance your portfolio to the chosen percentages.

For example, if you invest 25% of your money in 4 mutual funds, after a year check the totals and sell stocks with more than 25% and buy the mutual funds with less than 25%. This method forces you to buy low and sell high once a year.

Writing Articles

E-zines are popping up everywhere on the internet. Writing articles assist you in promoting your business and provides valuable back links to your websites to increase traffic. At the same time, some of them pay you for the submission or share advertising dollars. This is a win-win.

For more information, read my article Making Money on Your Articles. Currently, Helium is producing the most passive income for me.

Write a Book or E-book

Writing a book is easier than ever with the advent of self publishing. Writing an e-book will not only generate additional revenues but will also propel you and your business to the status of the Obvious Expert.

Blog or Website Income

Providing great web content will generate traffic to your website or blog. Earning additional passive income is as easy as adding Adsense ads to your site or getting involve in affiliate marketing.

Do you have any other ideas for generating passive income? Leave a comment and share with other readers.

Overcoming Procrastination

Procrastination is the act of putting off important tasks in favor of low priority items. Do you find yourself checking e-mail instead of finishing that important project or watching TV at home instead of completing that home improvement project? These are signs of procrastination.

What are you procrastinating to do in your life? Sit down for a minute and think about one decision and activity that is important but you are avoiding. In small business, I found that procrastination is the main killer of results that I have ever experienced.

Break it into smaller activities
Break a large task into activities that take about 30 minutes each. Most people do not get started because the project seems too big. Creating smaller chunks makes the big project seem palatable.

Set a Time Limit
Time yourself for activities. When I write, I give myself 30 minutes to write 400 words. People tend to procrastinate and most of the activity happens right before the deadline.

In other words, most activities take less time than we estimate. If you give a student an assignment that is due next week, the student will delay starting until the day before the due date. If you give the same student, a due date of tomorrow, the student would start today.

Developing tight deadlines for you and your staff is one of the best ways to overcoming procrastination.

Focus more on starting a task than finishing
The old adage of “"The journey of 1000 miles begins with one step" is so true when it comes to procrastination. The hardest part of any project is motivating yourself to start.

Sometimes when I want to motivate myself to write a procedure that I was avoiding or any other activity, I just say that I am going to at least open a Microsoft Word document and create a title. Of course, most of the time, I find that I write much more than I expected.

Forget about Perfectionism
Think of everything as a rough draft especially in creative endeavors. Perfectionism stifles creativity so give yourself a break and relax. grant yourself permission to start without worrying if it’s perfect. You will be surprise how well things turn out if you turn off that self-critic in your mind.

Change your Attitude
Sometime, we develop a hugely negative attitude about important activities. Handle this with some positive self-talk. Ask yourself “how will finishing this task benefit me?” Develop a vision in your mind’s eye of how the finished project will make you feel and what your life will look like after completing it.

What is your Heroic Mission?

We are all on a heroic mission whether we realize it or not. When you strip away the surface of running a business, supporting your family, and paying bills, what is left is your heroic mission – your passion. At times, I find myself focusing too much on the other stuff and forgetting about my Heroic mission.

As a Martial Arts business, I defined my heroic mission three years ago as Inspiring Excellence. I direct all my efforts towards this mission. We don’t teach just kicking and punching – we teach a system for children and adults to strive for the extraordinary.

The heroic mission of your business or life is like any story with peaks and valleys. Think of any story, for example King Arthur or a more modern example of Rocky, where the hero goes through a series of tests and at their lowest point is the turnaround to their greatest victory.

What is your Heroic Mission? Define it and write it down. Everyday ask yourself if your actions are in accordance with your heroic mission. If they are not, immediately change your course.

When you are at your deepest despair, I have always found that this is just before my greatest success. What would have happened if you were like most people and quit? You’d miss out on your greatest successes. No, not you! Because you are on a heroic mission – your extraordinary. When you hit a low in your life, the answer is to push harder because you know that success is just around the corner.

Here’s some fellow blogger that I believe are on their Heroic Mission:

Go To The Ant – She is on a journey for financial freedom. Her mission is to create an emergency fund of $5400 and currently, she saved $1787.50 towards her goal. Way to go!

No Impact Man - Colin Beavan ventured on a year long project to have zero impact on the environment. All of this while living in New York City. His story is simply amazing!

Working For Financial Freedom – She and her husband are working to pay down a $58,345.16 debt. Since March 28, 2007, they managed to pay off $30,019.20. I can only say wow.

Do you want to create a better life and business today? Invent and act on your Heroic Mission today!

The Best Gift to Give Your Children for the Holidays

During the Christmas holiday, most families are racing around to find the perfect gift for their children. As your children get older, you may be tempted to give a gift of money to them. Your children will most likely frivolously spend this money on an IPod, video games, etc.

Best gift for the season – Fund in IRA for your children

When our son turned 18, I convinced my wife that we should gift money into an IRA. Funding an IRA is the gift that keeps on giving. Since we funded an IRA at such an early age, we are ensuring a good retirement for him.

How does funding an IRA keep giving?

1. Our son receives a bigger tax refund. For a $2000 deposit, he receive over $500 back on his taxes. How’s is that for a Christmas present.
2. Our son has $4500 in the IRA and is 22 years old. Even if we never invested again, this IRA at 8% annual return would be worth over $100,000 by retirement.
3. It’s awesome estate planning. If we kept this money in our own investments, eventually it would become part of our estate and subjected to death tax.
4. We protected the money. In other words, our son cannot spend it prematurely without sustaining an early withdraw fee. This fact keeps his hand out of the cookie jar.
5. We are teaching him a valuable lesson about saving. He’s proud of the fact that the balance is going upward, therefore, giving him confidence and security for his future.

Best part of this gift is now our son is carrying the torch. He inspired me to write this blog because he asked how much he could put into the IRA this year. I am very proud of him and glad that he has learned a valuable lesson.

Demember Theme: Creating Checklists and Schedules

These two projects took huge amounts of my time over the last month but the payoff is more free time. I found some bugs in the Quickbooks integration and waiting for the vendor to fix them so I have been unable to calculate my November results. It's killing me!!! because I keep a close eye on my result.

Demember Theme: Creating Checklists and Monthly Schedules

I noticed an ebbing flow every month appearing in the business. This month I want to take all of the activities that cannot be automated and create checklist and monthly schedules to perform against.

It appears that missing specific activities diminishes my results significantly. We test students for belts at the end of the month and this influences the timing of the activities.

Here’s a quick list of activities by week:

Week One:
Start our marketing campaign for the month
Send out e-newsletter
Week Two
1. Weekly e-mail with special offer
2. Create Test List
3. Identify Upgrades and Renewal Students
4. Order Belts and Take equipment inventory (we save on shipping by doing this once a month)
Week Three
1. Weekly e-mail with special offer
2. Invitations to Renewal Students
3. Schedule Renewal Conferences
4. Hand out Test Applications
Week Four
1. Weekly e-mail with special offer
2. Perform Renewal Conferences
3. Test Certificates
4. Exam Graduation

This is just some of the main activities during the month. I want to create a written form and checklist as a template for renewals and new students. Well, it’s off to work for me.