Behind the Scenes of Creating a 50K Passive Income StreamMay 18, 2022
This week on the blog, I want to revisit income streams. If I am passionate about one thing, it is that you have multiple income streams in your business. And while at the beginning I do recommend focusing on just one, it is important to have multiple income streams going as you grow so that you can pivot as needed and more importantly work some time freedom into that schedule so that you are not launching all the time.
This became even more important as we as a family navigated away from that consistent corporate income and focused on growing this business full-time. Like anything (and I think most investors would tell you), do not put all your eggs in one basket.
You can catch up on the journey of how we created our retirement plan from corporate here and read how we created multiple income streams in this blog post. Today I wanted to dig deeper into why we created a membership model, how it created a 50K+ income stream into our business this year, and how you can too.
The Why Behind Passive Income
I've been so passionate about sharing this because recently I had to have an emergency root canal. Don’t worry, I won't bore you with the details, but the reason I am sharing this is because I was out. Like laying in bed in so much pain, I did nothing for four days. I wasn’t on social media. I wasn’t checking email. Nothing.
And during that time, we had five new members join our membership club as I was sleeping. Which if they stay for a year, is $5,820 in revenue.
Pretty good, right? And if you are like me when people would say this, I would visibly roll my eyes. Like that is great for you but how the heck do I do that?
Tip one: it won't happen overnight.
My first tip is that it will not happen overnight. You cannot create a course or a membership in a fancy coffee shop one afternoon and hope that people just flock to it the next day. Maybe if you are a huge influencer you can (I call this the Kim Kardashian effect), but for most of us, this is not the case.
When thinking about what type of product, service, or course I want to design, I like to think about a couple of strategic questions. You knew I was going to throw some strategy in there right?
Questions to ask when creating an income stream
When you are thinking about what you want to offer, think about this:
- Can it create predictable revenue? Can you launch it multiple times a year or can it be a membership model?
- Can it be automated? As in does it rely on you being the face of the content or service 100% of the time?
Write those down because you want the answer to be yes for both of them eventually.
Before I decided to leave corporate I knew that I wanted two main sources of income. One being the mastermind which we launch every six months and second, the Club membership. I personally decided on a membership model because I don’t love courses. Just being honest. I would rather ask someone a question and to be really honest, as a working mom trying to start her business, I didn't have time to watch a lot of courses. I wanted someone to point me in the right direction. And have a place to ask questions. So the membership model made sense given my experience and what I think my clients like.
Part of the plan to leave corporate was to grow the membership. The reason? It answered those two questions I just asked you.
- It could scale.
- It wasn’t dependent on me being present 100% of the time.
How We Grew Our Membership
In March of this year, we grew it by almost 3x the size it was a year ago. Here is how we did it:
- I knew that to create predictable revenue, I had to make sure we had content in the Club that everyone wanted. Most memberships have a 50% turnover. Our turnover is less than 10% because we match the content with what you want to know.
How do you do this?
In our example, what do my clients/DM's all ask for? 1:1. And Coaching. And content planning. Those are the most popular topics. So we created 3X a month of Live coaching and co-working sessions. This means every other week you could have a touch base with me if you wanted. To answer the content planning questions and the “how do you do the things you do?” question, we introduced quarterly masterclasses. So every quarter we can curate the content exactly to your needs.
The key: the consumables of courses and content are not overwhelming and the secret sauce is the accountability + live interaction.
If you are designing this stream of income for yourself, ask yourself, what are your clients and customers asking for? In our case, the club content was completely re-organized with what each of you were asking for.
Design it in a way that isn't dependent on you 100% of the time.
Step two was that it had to be designed in a way that wasn’t dependent on me 100% of the time. How can this apply to you? Ask yourself how you can scale this in the future. You don’t have to do this all at once, but you want to create an offer that you can grow into.
In our club example, we actually built the club a full year ago and grew it kind of behind the scenes testing different things out. We launched it live twice, once in September of 2021 and then in March 2022. We now have a challenge that is an evergreen model that leads to it.
This goes back to my point at the beginning that it does not happen overnight. And honestly, I think some coaches and strategists sell it like it does.
- You might start with a course first and then have a q&A group for those in the course.
- That Q&A group might turn into a monthly membership.
- Then you might hire a team to help you plan and manage the monthly membership.
Eventually, all of the courses you create would go into the membership (that is what ours do now) so that the model is better for your customers and clients.
The key question here is at the beginning, think about how you can grow into this offer you are dreaming up. That way a year or two from now you aren’t just throwing spaghetti at the wall and hoping it sticks.
The two things I love about the membership model are that 1) you can grow into it, given the example I gave above and 2) it is easy to pivot and change. We do random pop-up trainings all the time or give advice on things that are not a course, but the platform we created was created with intention.
To wrap up your mini passive income stream strategy lesson, there are two questions you should be asking yourself if you are designing a business around your schedule and your future:
- Can it scale long-term?
- How can it exist without being 100% dependent on you?
They are super powerful questions that can help guide your entire business strategy.
Need some help with designing your income stream? Hit me up in the DM’s. It might be my 22 year corporate strategy background coming through, but it is so fun for me to help clients design this. The possibilities are endless. And so is that freedom to be able to take a break! Or a sick day. Or better yet a vacation.
I can’t wait to see what you come up with!
Looking for more on this topic and your High-Level Action items? Check out the Strategy Lab in the Crush the Rush Club!