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In this post, I am not talking about starting your own small business in the traditional sense. I am talking about either buying or starting a business that has the potential to become truly passive in a relatively short period of time (let's say one year).
Of course, the vast majority of businesses never become passive for their owners. Ask anyone who owns a dry cleaner or a roofing business if their business is “passive”. Nope! It often requires more time investment than working as a W-2 employee. Oftentimes when people start their own business, they've essentially just created a new job for one — and employed themselves. Although running their own shop may be infinitely more satisfying than working hard to make the Boss Man rich, they still have to go to work and trade time for money, which is the opposite of passive income.
But what we're talking about here are business opportunities that we can put a lot of work into today and in a year from now sit back and reap the rewards indefinitely.
Businesses: The Basics
- Ease of Entry: Difficult. Buying stocks takes an hour, buying a property may take a month — and your agent and title company or attorney are really doing all the work — but building a truly passive business will take you at least six months of your own hard work.
- Money Requirement: Depends on the business. It obviously takes more capital to start a manufacturing business than it does to start an Internet business.
- Time Requirement: High. A lot of “sweat equity” goes into building a business.
- Potential Payoff (cash flow): High. The sky’s the limit because you’re in control.
- Potential Payoff (appreciation): High. Ditto.
Businesses You Can Buy
There are plenty of business opportunities out there if you have the cash. Now, I don't have any experience with buying businesses, so I'm just going to drop a few examples below to get your wheels turning.
- Vending Machines: maybe you'll find a rare coin and really strike it rich.
- Car Washes: scrub, scrub, scrub.
- Laundromat: just make sure you sell detergent too!
Business You Can Start Yourself And Eventually Turn Into Passive Income Sources
This is the route I'm taking with this blog. It doesn't take a lot of money to get started, and you have the potential to make a lot of money if you're willing to put in the work.
- Internet Business: this can be anything from a blog that generates ad revenue for you to an e-commerce website that sells digital products or courses you’ve created and can now sell for incredibly high prices.
- Creative Business: write an ebook and put it on the Kindle Store or write a song and collect royalties.
- Mini-Rentals: buy an ATM, game machine, vending machine, etc., and collect your quarters every week.
- T-Shirt Business: produce a creative shirt design on Teespring.com, and let them do the printing and selling (for a fee, of course).
What kind of soon-to-be passive business are you thinking about starting? 🙂
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