Passive Income - Can You REALLY Have It?

We've all heard about it. We all want it. Can't we really have it? Here is my quick and dirty guide to passive income.

"Passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of 'unearned income'". (Wikipedia)

 Or if you are one that doesn't fancy Wiki, here is another definition:

"Definition of 'Passive Income'

"Earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved. As with non-passive income, passive income is usually taxable; however it is often treated differently by the Internal Revenue Service (IRS). " (Investopedia)

Essentially, go to Google and search for "passive income" and find these and more definitions. If you want to do as little work as possible, but still earn money on a venture, you are earning passive income. Now you are asking, "How do I sign up?!"

It's isn't that easy, and often people define the wrong types of income as passive income. They also mislead you into thinking that you can really do nothing and make money. There are many blogs that I have come across that list things like selling on eBay or etsy as passive income. Yeah, ummm, no. 

Unless you can figure out how to pay someone to manage your eBay inventory, list it on eBay, ship the items when they are sold and still make money for you, then you can call that passive income. If you are savvy enough, by all means go for it. (Now that I just said that, I am seriously giving it some thought).

Usually, passive income comes with a hefty upfront investment. Purchasing rental properties such as apartments, office space or vacation space and then paying someone else to manage it for you is a very common passive income, if not the most common. Joining the rental property in popularity is someone who starts or invests in a business and isn't involved in the day to day management of the business. The common element here is "pay someone else to manage it for you". 

To me, that sounds like a dream come true. 

Writing a blog and relying on the ad clicks to be passive income, not so much. You can SORT of classify it as passive, but in all honesty, you are putting forth the work to write the blog, market it and keep it current.

Here are a few ideas to get what I call "sort of" passive income, in which you can still do less work if you are willing to share the profits with the people you hire to do some of the leg work.

1. That eBay thing I listed above, or something similar. Acquire or find someone with junk that they want to get rid of. Then, hire someone to take pictures of the items, list them and manage the sales. You will still do work with keeping the inventory up or finding new sources, and of course paying the people you hire. But hey - you can still make some moola.
2. Create an app. Or just come up with the idea and then pay other people to create it and manage it. They will keep up with the updates, bugs and whatever else. 
3. Write an ebook. OK so I keep seeing this all over the place. You could do this, but it would be really hard to just whip something up and get money for it. You will need to work on it to get it to sell. OR you can hire people to peddle it for you. If you are a literary genius or just really know how to rein in a crowd, you can earn passive income once it starts selling itself. Hey, it could work.
4. Drop ship. But you won't even be doing that. Create a website (or pay someone to), get into an agreement with a wholesale company (easier than it sounds, I'll post about this on a later date) and then pay someone to manage the sales that come in on your site. In general, you could easily just do all this yourself and save a couple bucks, but if you are truly not want do much just pay someone. 
5. Pay someone to do pretty much anything for you. If you have the upfront funds, by all means go for it.

I hope this helped a little and didn't completely squash your dreams of moving to a beach front property and watching your bank account sky rocket. (which could happen, if you play your cards and money right, and if you don't know how to do that, hire someone). 

[footnote: I attempted to site my sources by providing a link on the site name in parenthesis. If at anytime this does not work, please let me know so I can correct it. I don't believe in plagiarizing, and wouldn't want my work miss represented either]

Hobbies as Businesses

Hi all,

I haven't posted many blogs, and definitely haven't posted in a while. I have been busy with other ventures; and it has been exciting!

I have been working on a small business that my dad started over 10 years ago. It all started with a passion and a hobby. He would offer his expertise to friends and family for free, then it developed into a small income.

He called it his nice little side cash; his disposable income.

In 2008 my brother and I were both fired from our jobs (we would have been laid off, but with the economy they couldn't even afford to give us a severance). I went onto to find other work and my brother went to learn the family biz with my dad.

My dad started to see real potential to grow the company into something more than just side cash, but a business that we could see real income from.

He took this idea and started to advertise more and slowly grow the business. He and my brother also saw other opportunities in the industry and began to develop more services the company could offer. In 2009 they brought on me and my husband on a more regular basis (I had been assisting with pieces here and there prior to 2009).

Together we developed a website, tore down that site, developed a couple more until we came to one that works for now. We also began offering continuing education courses to insurance agents. Now here we are with a business that has steadily grown in the last few years and we are moving toward a bright future.

All this took was one person doing what they love and seeing a need for it in the community. The money just came with it.

And in case you were wondering what this business is: it is appraising vehicles for their insurable amount, selling amount or diminished value amount.

Take a look at the site here: www.americasautoappraisers.com to find out more about it! We would love to hear your input!

No Such Thing As Failing, Unless You Quit

Most entrepreneurs know that success isn't measured by simple "win/lose" standards.  If you are a newbie to the entrepreneur club, knowing this and keeping it in mind will ultimately enable you to actually succeed.

I have not read any story about a successful entrepreneur (or even businessperson, for that matter) that hasn't had some, or many, setbacks in their career paths.
Here is tip # 1: Use these setbacks as a learning experience. Put them in a journal marked "What Not To Do".  Then, put down the steps you are taking/took to resolve this setback. This will help ensure that you do not repeat.

Tip # 2: Use it as motivation.  Starting a business is a tricky thing. All the business books/blogs/articles in the world will never fully prepare you for the real world of business. You need to be motivated to succeed, and the only way to succeed is to not quit. The only way to not quit is to be motivated. Having setbacks might seem demotivating, but really, they can be useful. 

How do you use a setback as motivation? You keep the reasons you started the business in mind.

Along the way, there will be road blocks, speed bumps and others actually trying to ensure that your success is not met.  Ignore those people. Let them spend their time trying to stop you, rather than on their own business. In the long run, they will only be hurting themselves. 

Self-Development

Self-development is great, for personal and professional uses.  In the last two months, while these blogs have been dormant, I was taking a few courses to improve upon my skills.  One of them, titled Interpersonal Communications, was great at teaching me skills to use in the business world and in my personal life.

Enrolling in a similar course for small business owners should be on the list of ‘must do now’ items.  It was great to learn about how to deal with conflict in a professional setting.  You, as a small business owner, are going to be stressed.  You are going to deal with conflict, and in order to respect yourself, your business and especially your customers, you will need to understand how to deal with conflict.

A few things to understand about taking personal development classes are this:

1.       The skills learned can be used throughout your entire life

2.       You can never have too many skills

3.       Something doesn't need to be broken before you fix it.  Taking a course to deal with stress doesn't mean you don’t know how to deal with it now.  It means you want to learn more tips and tricks to deal with new kinds of stress, e.g., the pressure of starting and running your business

4.       You can pass this knowledge along

Understanding yourself as a business owner will enable you to step out of your shoes and look at any situation with a new approach and vision.  I strongly encourage any business owner, small or not, to take at least one personal/professional development course in their lifetime.  More, if you can find the time!

Business Plan Goals

Let's piggy back off last weeks blog about writing your business plan.  I spoke about writing the goals sections first, and reviewing it each time you start a new section of the business plan.  This will help you out by keeping your focus.
Your goals section should include everything you want to get out of your business.  I believe you should also write a separate goal section outside of your business plan that is just for you.  What do you want to get out of your start-up business personally?
I find that if I remind myself of why I am going through the trouble, heartache and sleepless nights of starting a business it helps me stay motivated to keep going.

Here are some goal ideas to get your started on listing your own:
"I want to have a list of loyal customers, for life."
"I want to be a leading innovator in my industry, paving the way for [fill in the blank]."
"I want to change the way the world views America through [fill in the blank]."
"I want to create jobs for life."
"I want to bring back great customer service."
"I want to [fill in your own goal here]."

These are just a few ideas, there are so many reasons why you might be starting your own business.  Personally, I wanted to start a business for reasons that only included myself and my family and then it grew into what I could do for the community.

My goals include:
Financial Freedom
Be my own boss
Put my ideas to use, outside the corporate cubicles
Guide and help others reach their goals through business start-ups

Now that you have an idea of what your goals might entail, write them where you will see them everyday. Review them, recite them and work towards them.

Happy goal writing!

Plan Your Business Plan

Writing a business plan seems daunting, or downright boring.  It's true, it is.  A business plan is all the boring stuff about marketing, financial planning and other boring writing.  But it is also an insight into your business, and will help you figure out what you need to get started.

You don't need to write up a business plan in one sitting. In fact, I don't recommend it.  You should really write it over time, revising and rewriting parts as you go.  The part I always like to start with is the goals section.  What do you want out of owning and operating your own business?

Re-read that section every time you begin to write another section, it will motivate you to finish your plan.

I find that using a pre made template is a great way to get that push and help.  To find some great ones, just enter "business plan" in the search bar and watch the results pile up!  I also like a couple that people have uploaded to Microsoft Word in the templates section.

Revise your business plan once you start operations, and every year thereafter.  Doing this will enable you to see where you are in relation to your goals and projections, and will allow you to create a more structured plan in order to continue operations.

I hope this helps, and if you want help with your business plan, feel free to contact me.

Thanks and happy planning!

Small Business Finances

Finances are important no matter what you do or who you are.  For small businesses, though, it could make or break your business.  If you don't manage them properly, you could face fines or even go under.  You also don't need to break the bank to hire someone to do your finances year round, either.

A few good tips would be to consult with an accountant before you start your business.  Determine if your field requires a lot of hands on accounting, or if it would be more beneficial to work your accounts just a few times a week or month.

Once you have determined how extensive your accounting needs are, budget for those needs accordingly. There are many companies that you can outsource your accounting needs to and many out there specialize in small business structure.

If you are more comfortable hiring a full time accountant, do your research.  Get references and also it is recommended that you hire an accountant who is CPA (certified public accountant).

Many small businesses can function just as well with some small business accounting software.  When doing this, research each one and read reviews.  Find one that is easy to use, but also does all the functions you require to ensure your business' assets are protected.

More blogs are to come with information on small business finances, so stay tuned.