When the COVID-19 pandemic hit the world, small businesses were among the first ones to take the fall. Most businesses had only two choices – scaling up to adapt, or calling it quits. While no entrepreneur wants to face the conundrum of shutting down their business prematurely, maintaining financial influx and liquidity is no easy feat.
More than 43% of small business owners in the US say that the COVID-19 pandemic has had a moderately negative impact on their business. About 27% of others state that it had a significant effect. So, it is the right time for small business owners to start looking for avenues to generate passive income. Such passive income can help entrepreneurs in managing multiple business activities and priorities effortlessly.
With that in mind, here are a few ways using which small business owners can create passive income.
#1 Create and Monetize Online Channels
As a small business owner, you can not have too many opportunities to promote your brand. You need to be out there, actively looking for opportunities to promote your business, and if you make some money out of it — icing on the cake, right?
As of 2021, 79% of internet users have a YouTube account, which means that the odds of targeting the right customers through a YouTube channel are significantly high. What’s more, YouTube channels are great for positioning yourself as a thought leader.
As it is slowly evolving into a preferred medium for learning, you can post informative videos to grow your reach. As your reach and subscriber list grow, you can generate more income from the videos by monetizing them.
The same philosophy applies to podcasts which have a penetration rate of 18% worldwide — only set to grow in the upcoming years. Creating podcasts is fairly inexpensive right from the start, and can benefit entrepreneurs in terms of global visibility and reach.
#2 Invest in P2P Lending
Peer-to-Peer lending or P2P lending, is one of the more unconventional yet growing modes of investments globally. In P2P lending, transactions are carried out through an online service that matches lenders with borrowers — individuals or businesses.
When the borrowers start repaying the loan, the lenders will start receiving parts of the amount that they invested with additional interest. Since there are no financial intermediaries in the process, the interest rate you get tends to be higher than traditional loans. What’s more, the global P2P lending industry has been projected to be worth 1000 billion dollars by 2025.
P2P lending can create a passive income stream for lenders till they get the investment amount back — with interest. As a small business owner, you can opt to cash out the amount and reinvest in your business to take care of your liabilities and initiatives.
#3 Rent out an Asset
Your assets are called so for a reason – they appreciate and grow in value over time, and can generate revenues during times of need. Property investments are known to be stable and tend to offer higher returns over time in terms of rental income.
Renting out a property might seem like a long-term investment idea to many, but you would be surprised at how easy it is, and more importantly, how profitable. The landlord model is considered to be one of the greatest ways to generate passive income. Also, it is easy to pay off the home loan using the rent you get from your tenants.
Similarly, it is a wise idea to treat your car as an asset. You can rent out your car to car rental services or companies like Uber, and generate regular income. Additionally, the car rental companies usually take care of the car maintenance sparing you a lot of expense.
#4 Consider Affiliate Marketing
Small business owners should never take their skills and expertise for granted. As an entrepreneur, if you are sure about your capabilities, you can leverage them for affiliate marketing. Affiliate marketing lets you earn commissions every time a promotional effort from your end translates into sales for another company’s products or services.
If your personal social network or company website is authoritative then this is a worthy alternative for generating passive income. If you are very successful in your efforts, you can earn up to five figures every month through it. Plus, producing quality content in the process is a potential investment that is guaranteed to pay off in the long run.
In the initial stage, you may have to spend a lot of time and money to create high-quality links, but it will pay off in the form of a steady income in the later stages.
#5 Sell Educational Content
They say the best returns on investment can be gained by sharing your knowledge and expertise with others. With everybody stuck at home due to the pandemic, e-learning platforms are booming more than ever. Moreover, people are actively looking to learn new skills and capabilities sitting at home, and online courses are just the way to go about it.
Selling online courses is also a great way for building online credibility and creating a personal brand. Platforms like Udemy, Skillshare, and Coursera let you monetize your courses easily, through which you can set up a consistent passive income stream. If not these platforms, you can also use your own website to promote your courses, thus helping it gain more traffic and reach.
Some initial investment is required for designing and producing highly engaging course materials and modules. However, once your course is monetized, you can generate consistent passive income.
In the current troubled times, every small business owner can benefit from having an alternate source of income. Such income can be reinvested into the business or used for funding important business activities and projects. Even if your business is doing well, you can always explore opportunities to generate passive income, which can then be used for your business expenses.
Lucy Manole is a creative content writer and strategist at Marketing Digest. She specializes in writing about digital marketing, technology, entrepreneurship, and education. When she is not writing or editing, she spends time reading books, cooking and traveling.
Also published on Medium.