The Truth About Passive Income
For an interior design business owner, having passive income streams can be a great way to generate extra cash flow and make more money. Passive income is just as it sounds — revenue that comes your way while you are doing nothing to generate that money, at least not actively at that moment.
Opening your mind to the possibilities that may exist for you to earn passive income requires you to abandon the traditional paradigm of making money — which is: active effort and work = income. The more you want to make, the harder you have to work.
In a passive income scenario, you can literally earn money while you sleep. What could be better?
BUT HOLD ON. LET ME MAKE THIS VERY CLEAR.
Generating passive income does NOT mean no effort. Typically, a great deal of effort is required initially to create and set up a profitable passive income stream.
The key is in the timing: passive income is based on a phased approach to earning money. The essential work (the bulk of the work) is completed up front. Then, over time, income comes your way as a result of those up-front efforts. But, over time, and along the way, there will still be effort required to nurture your audience and market the product. Sometimes, lots of additional effort. But smaller amounts of effort relative to the income that can be earned. The idea is that these income streams — once created — are pretty much self-sustaining.
Pretty much.
So, when thinking about creating passive income for your company, you have to be okay with delayed gratification. You will put in a ton of effort upfront, so you can earn money with less effort in the future. That initial time investment (and also monetary investment) will continue to reward you as you pursue other income-generating activities. So it can both increase overall revenue and create some financial security (which means you won’t have to say YES to every project when the “feast or famine” fears come along).
The most important thing is what you do BEFORE creating the passive income product. If you want it to generate passive income, you have to ensure people can find that passive income-generating thing you put out there. You need to lead people to it. That is where your continual effort comes in.
THE TRUTH BEHIND PASSIVE INCOME (at least in my experience):
I’ll break this down into:
What you should do up front BEFORE creating a passive income product
What goes into creating a passive income product, and
What you may have to do continually to lead your audience to your income-generating product and maintain its relevance
This is based on my own experience of producing and selling digital products in my industry, and conversations I’ve had with clients who have launched passive income products. So your experience may be completely different.
What You Should Do Before Creating a Passive Income Product
01 | PRIORITIZE GROWING YOUR AUDIENCE
Just as with your 1:1 services, you likely won’t sell many of your passive income-generating products if no one knows they exist. A first step toward generating passive income is to grow your audience so that when you do launch your product, you are launching it to an audience that trusts you and wants to purchase from you.
This means prioritizing SEO, consistently marketing your business, creating long-form content on your website, using Pinterest and Google My Business to bring eyes to your website, using a lead magnet to grow an email list, running ads, networking, etc.
You can check out our done-for-you lead magnet templates for interior designers here and here.
02 | CREATE CONSISTENT VALUABLE CONTENT AND RESOURCES
Get in the habit of creating consistent, valuable content and resources. Most often, this will be through a blog or email newsletter. For some, it may be through YouTube videos.
The goal is to i) create something VALUABLE that helps your audience and ii) share it consistently with them. This will establish you as a trusted source who always provides value.
03 | CONSISTENTLY EMAIL YOUR AUDIENCE
As you grow your audience and create valuable content and resources, the primary focus should be on sharing that information with them through email so it’s easy for them to access. You don’t want to just show up when you have something to sell. People are smart and can see right through that. Build an audience. Nurture them with valuable resources. Help them do the thing your future product will help them to do. Gain their trust. Treat them well.
Read about why we love Flodesk for interior designers here.
04 | GAIN EXPERTISE AND EXPERIENCE IN THE 1:1 VERSION OF YOUR PRODUCT
As you’re growing your audience and creating valuable content and resources, you should continue to gain expertise and experience in the 1:1 version of whatever your future passive income product might be, if this is relevant.
Some may think that when you’re starting the business — when you are waiting for your client base to expand — may be the best time, as you may not yet be so buried with the day-to-day work. But I have found that only after years of 1:1 experience doing implementation with clients was I able to create meaningful and valued content that would appeal to my audience.
So if you’re going to launch a product to help people pick paint colors, you should continue to sell 1:1 paint consults so you can test your methods and gain insights into how you can make the best “paint course” or “paint guide” ever.
With passive income products, you won’t be there 1:1 to help the purchaser bring the project to completion. So your passive income products need to get your customers there without you. Experience will allow you to develop the needed thoroughness within your products for them to be self-directed.
Along with this comes some mindset stuff you may need to face head-on. You may need to work past the conventional belief that “I can only make money if I’m working hard” or “People will only buy from me if I do the work for them.”
Accept a new approach to making money that is tied to your expertise, not your time.
What Goes Into Creating a Passive Income Product
Once you begin to see patterns and consistencies among what your 1:1 clients and your audience need, you can create your passive income thing (whatever that may be!).
The creation process will likely involve a major, upfront investment of your time and possibly your money.
When I create a new product for The Design Library or The Workroom (or even a free product for The Resource Library), I invest substantial time and money in making it come to life.
HERE’S A GLIMPSE INTO MY PROCESS:
First, I make sure it’s something my clients and audience are telling me they want.
Then, I work extensively with my team to think and test and edit and brainstorm the product. That also means paying them. Working with my team to test the idea and bring it to life typically involves rounds and rounds of edits and revisions until it goes live. A lot of time and effort from a lot of people.
I see many products out there that could benefit from a copyeditor. :-)
Then, once the product itself is created, we create all the deliverables and sales pieces for it: the product description and sales page, the launch emails, the purchase email sequences, the feedback forms, the images, the FAQ page, etc.
I also do my due diligence and have my attorney protect my intellectual property. She creates the necessary copyrights, legal disclaimers, and purchase terms and conditions.
Even with all the legal stuff in place, I still have people who purchase a license to use my products and then violate those terms. So that’s something else fun you have to be ready for.
Another thing to remember — depending on what your passive income product entails, you may need to take time away from client work to develop it. This means your income may take a hit while you’re in development mode. It’s important to be very strategic about when it makes sense for you to devote time toward developing your passive income product.
So, timing is key.
How to Continually Sell Your Passive Income Product
So let’s say you’ve invested time and money into creating a passive income generating product. And you put it out there. Remember that adage: If you build it, they will come?
Well, that doesn’t always apply. Don’t expect customers to flock to your product the minute you put it on your website.
Nope. You have to promote and market the new product initially, and then you have to consistently market and promote the product over time.
This requires ongoing effort, some of which can (and should) be automated.
Ongoing marketing of your passive income product can take many forms.
If your product is displayed and sold on your website, you should focus on SEO (through on page SEO and long form content with high ranking keywords) so a larger audience finds your website.
You can also promote the product throughout the year. Find ways to reach out to your audience to let them know about your product. And don’t stop. By continuing to promote, you increase the chances of reaching the right person at the right time.
You’ll want to create “funnels” to lead people to your website and provide additional resources. This could be a lead magnet — a free offering in exchange for contact information. This allows you to send emails automatically that lead to your products. Check out our lead magnet templates for interior designers here and here.
Once you’ve built up your audience — not only your email list, but also your social media audience — engage with them often. This will also lead more people to your website and to your product or service offering. For example, I send weekly emails to my audience to provide value and help them with their businesses, and I continually create additional resources to support interior designers. Creating in-depth content once or multiple times a week to serve your audience for free will help them to expect value from you, and will in turn build their trust in purchasing from you.
Promote your lead magnet and blog posts and portfolio images on Pinterest to gain more traffic. Pinterest is a search engine (not a social media platform) and is the largest traffic source for my company.
If you are writing blog posts and not using Pinterest, are you even blogging?
And, if you’re writing blog posts and not emailing them to your list, are you even blogging?
You may also consider investing time and money in ads. You can do this before you launch a product (so you launch to a bigger audience) or you can do it once the product is available. Some companies run ads year round. You’ll just want to measure the ROI to make sure the return is worth the investment.
And always remember to ask your customers for feedback so you can make any needed adjustments to your products in real time. Feedback will also inform you about areas where you may need to provide additional customer support (this is true for 1:1 services as well). You’ll want to set aside time to make any adjustments to your products.
Note: I formally update my products twice a year (meaning: we set aside time to do a full review of our products and make any adjustments so everything is relevant) and we also roll out upgrades when we identify gaps in our products. So our Design Library customers may receive additional templates that go along with products they’ve purchased as we develop them (and they’ve locked in at the original price they paid).
You also must set aside time to provide customer support. People will email you with questions about your products before and after purchase. And if your tech ever breaks, you’ll need time to troubleshoot and fix that as well.
And, finally, the not-so-pleasant, down-and-dirty, but very real side of being a business owner. You may need to deal with competitors who steal your intellectual property.
I know of three business owners who did this to me—one was an interior design business coach in Australia, one was an interior design educator who teaches people how to sketch (and I guess business coach, too), and one was an interior design-specific online business manager. Two of them turned around and sold my content to their clients; the third one is still on watch. That was fun.
So, if something like this happens to you, you may have to spend more time and money to enforce your copyrights and safeguard your intellectual property. Of course, this all depends on how far you want to take things.
So, as you can see, creating a passive income product is just a small part of what’s required in the scheme of having passive income.
Passive Income Ideas for Interior Designers
If you’re like, “Oh my goodness, Katie, just give me some ideas already for what I can sell that isn’t tied to my time all day, every day.”, here they are:
Create an online shop so anyone, at any time, can purchase one of those items from your website. This could be a digital guide, digital artwork, or digital zoom backgrounds (PLEASE SOMEONE CREATE SOME AMAZING OFFICE BACKGROUNDS WITH STYLED SHELVES!!). Or, it could be an e-commerce shop (which will require much more upfront and ongoing time and money than a digital product.)
Create an online course. This expands on #1 but is a bit more extensive. Rather than a digital guide, this would be a course or series of educational resources to help clients learn how to do something that you typically do but at a fraction of the cost of hiring you to do it.
Expand your offerings with a larger staff. If you hire and train a junior designer or a team of designers, you — as the business owner — will earn from the work they produce, as the revenue they generate will be greater than what you pay them. However, training and supervising staff can be very work-intensive. And it means you yourself will spend less time designing and more time supervising. Is that what you want to do? Read this post about the first thing I would do to earn additional income if I were an interior designer.
Create a product line (furniture, art, fabric, wallpaper, etc.) with an established company. This might be a collection of fabric patterns you design, a series of occasional tables, or decorative art pieces or throw pillows. This could happen two ways:
You license your designs through an established company. This is great because the established company will have the brand reputation and marketing channels to bring attention to your line.
You develop your own product line and find manufacturers or fabricators that would produce your designs. If you’re selling your own line, you’ll need a large audience to sell them to.
Write a book or ebook. You can self-publish or traditionally publish a book. If writing isn’t your thing, you can hire a ghostwriter to do it with you.
Purchase real estate, design it, and rent it out. Use it to benefit you, your family, and your clients and to showcase your amazing design talent to non-clients. Of course, this is a large upfront investment, and you’ll need to manage the property or hire a management company and deal with ongoing updates and maintenance.
Invest in another company in exchange for a share of the profits or some other arranged return on your investment.
Start a secondary company that is managed by someone else. This could be a franchise business or any type of business. This requires a significant monetary investment as well as managerial oversight.
Participate in affiliate marketing by sharing about brands and products you love. This could be done through direct affiliate programs or through RewardStyle/Like to Know It, etc. Read this post to find out whether affiliate marketing is worth it for interior designers.
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