5 Myths About Passive Income and Online Business
Blog based businesses are not the majority of online business opportunities. It's worth reminding yourself that blog-based conversations about entrepreneurship will always overrepresent ideas about blogging.
As someone who is currently earning passive income off businesses that don't have an important blogging element, I wanted to weigh in with some alternatives to commonly held opinions in the business blogosphere.
Myth #1. Truly passive income is not possible.
Reality: It's possible.
I hear this a lot. I'm not sure why. It's 100% possible and I know a bunch of people, including me and my business partner who are walking proof. People have been earning passive income for milleniums. If you find yourself arguing about this point, I'd have to ask to what end? Passive income as a category is useful and it ought to be used to refer to any type of income you receive that requires minimal effort to upkeep.
As a fun blogosphere aside-- anyone who has mistook the 4 Hour Work Week to advocate working for only four hours a week is due for a re-read. Those who have suggested that it is not possible nor agreeable to focus less than 4 hour per week on income generating projects or jobs that you find unpleasant needs to check their temperature.
Myth #2. Having employees is a pain in the butt, and makes it harder to run an automated business.
Reality: it's the exact opposite.
In my experience having team members has a wide range of benefits:
They make working more fun.
You can help contribute to the success of others.
They can run your business for you.
You open yourself and your business up to more opportunities.
People might call me crazy, but I spend less than 2 hours a week on the portion of our business that generates over 90% of our income. I'm able to do it because of the great people on our team.
Myth #3. Businesses that are formulated from the beginning to be "passive income" businesses are more likely to create it.
Reality: The likelihood that an owner will be able to make passive income off of her business has more to do with the attitude and mindset, than with the structure of the business, or the processes that have put in place.
I think that the E-Myth Revisited is okay. In my view it's the most overrated book in the business blogosphere. If you haven't yet read it, it's not bad, but I can sum it up for you in a sentence or two:
The E-Myth Revisited (Twice!) by Dan Andrews: "Most small business owners build a business around what they know how to do well, and since they aren't good at the art of entrepreneurship (finding profitable streams of cash flow and scaling processes around it), they build themselves in to their businesses.... Don't do that."
Examples? The expert baker who can't let go of cooking the cupcakes. The blogger who starts a blog in order to blog to make money. The architect who starts a firm and finds herself working 70 hour weeks designing homes.
Consider that the E-Myth is strongly focused on technical people or otherwise experts who endeavor to start a small business. As the barrier to entry to entrepreneurship continue to go down, a lot of people (like myself) entering the conversation stated out with no particular overwhelming expertise or technical skill. We just liked the idea of owning a business.
Value, not structure, will ultimately drive your ability to reap passive income from your businesses. If you own something valuable, and you can communicate your vision for the company to your team members, you can hit the road jack. I promise. It works.
Myth #4. A blog based business is one of the better ways to build a passive income business.
Reality: Blogs are a difficult way to grow a passive income business. Just anecdotally, I've met a bunch of people in the last 3 years who make passive income off of online-based businesses. I'd say off the top of my head, easily less than 10% of it is blog based.
Not only is blogging expensive, perishable, time consuming, and risky (in terms of opportunity cost) but blog based businesses depend on new, quality content. New content on great blogs is expensive to create, and if you want to keep your blog based business thriving, you'll need to create it or find somebody who is as good as you to do so. Not impossible, but difficult.
Myth #5. Your blog is not your business.
Reality: It totally could be your business.
In general, it's not the best idea unless you've got hyper niche expertise like Simon or Timothy. If your intention is to blog your way to expertise, as if often suggested you do in the biosophere, I'd take a hot second to ensure you’re heading somewhere valuable.
Speaking of passive income, if you really want to know about passive income, you should be checking out Pat Flynn's blog.... In fact, Pat's blog was the #1 most suggested blog in TMBA applications. It's great because he shows you directly how to make money on the interwebs.
It's odd to say that he's the exception in this regard.
Reality: Being an exception is good.
I gotta go get on a plane to Manila. I'll be there for a few weeks, look me up! :)
Cheers,
Dan
@TropicalMBA <---- I like to tweet a lot.