As a virtual business owner, you probably earn most (or maybe all) of your business revenue by working one on one with clients.
But did you ever stop to think that there are other ways you can be bringing revenue into your business?
Essentially, there are three types of income that you can plan to build into your business model: active, leveraged and passive. And by setting up more ways that you can earn, you will be more successful!
Active Income
Active income is what is referred to as the one-to-one model, which just means that you work with one person who pays you. This is the most common kind of income in a service type of business. For instance, your client work is basic active income. If you also do strategy sessions, consultations, training sessions, and that type of thing – if it’s one on one, then it’s active income. It requires your time and attention for one person (or company). The equation for this income stream is: you work, you get paid. You work, you get paid. You work, you get paid. And so on. Active income is usually the highest priced service offering you have due to the direct contact that your clients get with you.
Leveraged Income
Leveraged income is what is referred to as the one-to-few model. This basically means that you work with more than one person who pays you. So if you are doing training sessions or workshops where you work with more than one person at once, that’s considered leveraged income. Because although it requires your time and attention, you are reaching more than one person at once. So you are leveraging your time because more than one person is being served at that time. The equation for this income stream is: you work, you get paid, you get paid. You work, you get paid, you get paid. And so on. Leveraged income is usually priced lower than active income because there is less direct contact with you.
Passive Income
Passive income is the one-to-many model. With passive income, less of your time is required than the other two types of income. Things like self study programs and ecourses or ebooks will fall under the passive income model. So, you develop a product or a service, and then someone can purchase that and work on their own, without assistance from you. So passive income is great because it doesn’t require your time except to create and market the product. Passive income is usually the lowest priced service(s) of your revenue streams, because there is (little to) no contact with you. It’s also great for your customers, because they can come in to your service at a price that’s within their budget, or ‘try you out’ before committing to a higher priced service.
A successful business combines these three revenue streams in various ways so that there are many ways for clients to work with you, but also there are more ways that you are bringing money in to your business.
Think about your business. If you only have active income, how can you start to brainstorm ideas to bringing leveraged and passive income into the mix?
I’d love to hear your ideas! Leave your comments below or send me an email at tracey@yourvamentor.com!