Passive income is very essential. It can provide you with extra income to cater to your daily needs without touching your salary or interfering with your schedule. Additionally, it can relieve you from the stress and anxiety resulting from emergencies like loss of a job, sickness, accident, etc.
While the passive income may not solve all your financial needs, it can take a significant percentage of your daily needs, allowing you to save for the future.
Best business to start passive income
After making passive income, below are the top 10 business ideas and their implementation strategies to help you get started.
1. Do Affiliate Marketing
Affiliate marketing involves promoting a third party’s product through links in return for a commission. The person promoting the product is called an affiliate, and they earn a commission when any of their promoted products is bought. The most popular affiliate partners include Amazon, ShareASale, Awin, etc.
To become an affiliate marketer, you need a well-optimized website to act as an online store for your content or products. After creating a website, you need to identify which company’s products you will be promoting and then create relevant content with links leading to the third party’s site.
You will earn income when the visitors to your website buy the third party’s products through your links. The commission earned ranges between 3% and 7% depending on what the online store is offering. That means that you must increase your traffic to make the most out of affiliate marketing. But, how can use increase your web traffic?
One of the effective strategies for increasing your web traffic is optimizing your website for SEO. SEO optimization refers to the practice of customizing your website so that it ranks on the top of organic search results to attract the most traffic. It involves integrating quality keywords, inbound links, and other elements in well-crafted and relevant content.
Higher leads to the third party’s website would mean more purchases, and so is your commission. Here is a guide on how you can increase your web traffic.
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2. Rent Out Your Home And Car And Other Personal Property
If you want to go out for a vacation in the long term, you can earn passive income by renting out your home. All you need is to create awareness of your intention to rent out your home in advance.
Ensure that your advert contains all your requirements, including the rent amount, your contacts, the necessary documentation, and the rental period.
Being clear on your requirements will ensure that only qualified individuals contact you for a deal. When you start receiving calls from the interested parties, plan for a consultation meeting with each potential tenant to assess the credibility. You can use their flow of income to gauge their ability to pay the rent consistently.
Renting your home to a reliable tenant will assure you a passive monthly income from your home. You can use this income to cater for significant vacation expenses or add to your savings. The same case applies when you rent out your car or any other property to a reliable person.
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Another source of passive income is the investment in shares. Companies throughout the United States are looking for investors to buy their shares to raise capital to expand their operations.
The companies, in return, payout dividends to the shareholders depending on their shareholding percentage. Thus, you can earn monthly passive income (dividend) from a single investment in shares of a company.
To make the most out of it, you should shop around to shop for the company with the best cash flows and has the most favorable deals. You can also visit their website and see the experience of the other shareholders.
As a rational person, you should invest in companies with the best dividend payout and are capable of making timely dividend payouts.
The only problem of investing in company stocks is that they tend to lower their dividend payouts during uncertainty or financial stress. For instance, most companies have entirely cut their dividend payout due to the uncertainty caused by the coronavirus pandemic.
However, the good news is that you can always claim your initial capital outlay whenever you wish to withdraw your capital shares.
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4. Construct Rental Properties
Investing in rental properties can assure you a continuous flow of passive income throughout the service life of the property. Examples of such rental properties include building an estate, rental apartments, and so on.
Assuming that you already have space where you intend to put up the rental structures, you need to perform a market analysis to ascertain the types of buildings common in the area, their charges, and the average income of the residents of that place.
Researching this information will help you in deciding the quality of buildings to put up in the area. It will also help you assess the amount of passive income to expect after putting up the rental buildings and any potential risks in the market.
After gathering the market data, the next step is finding a qualified contractor to help you design structures and estimate the budget. Remember, the design of your structures must be unique and appealing to stand out in the competition. Finally, you need to assemble the funds and allow the contractor to put up the structures.
Quality rental buildings can earn you hundreds of thousands or millions of passive income per month once you rent them to reliable tenants. However, you need to keep your buildings under regular maintenance to maintain the user experience.
5. Create An App
If you have excellent programming skills, you can develop an app and generate passive income from it. To make the most out of app development, your app must be unique, with the latest graphics and features to capture the user- interest. The app could be a game or a platform that helps mobile users execute complex tasks.
Whatever niche you choose, your app should be something that captures the fancy of your audience. If you decide on a free app, it will earn you passive income through adverts, sponsored content, etc. on the other hand; you have to restrict the users to pay an upfront fee for a premium app to access the app.
Given the high number of competitors in the market, you need to update your app with the latest features regularly to ensure the consistent flow of your income from the app.
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6. Earn Interest From Cryptocurrency Holdings
Did you know that you can earn passive income by holding your crypto portfolio in a cryptocurrency savings account? Since the introduction of bitcoin as a digital currency, other cryptocurrencies emerged to feed the rapidly growing online market.
Consequently, the tech-savvy developers introduced cryptocurrency exchange apps where people could transact conveniently.
One of the salient features in most of these crypto exchange platforms is the savings account feature. It allows the crypto investors to earn interest on their interest earnings.
However, the amount of interest income differs from one platform to another, and so is the level of security for the investors’ crypto savings.
That said, you need to carefully research the available crypto platforms and invest in the one with the highest yield on your crypto savings and ensures maximum security of your funds.
Examples of the high-interest cryptocurrency exchange apps include YouHodler, HODLnaut, Blockfi, Coinbase, and Nexo.
The good thing with crypto-saving apps is that they earn income that would otherwise not be lost if you kept your funds under the mattress. Additionally, the interest yields on savings are far beyond the almost zero rates offered by banks on savings.
7. Create A Blog
If you have excellent writing and research skills, you have all it takes to earn a passive income through blogging. For convenience purposes, you need to identify a popular problem with your audience and then craft content to help them solve that problem.
You will earn passive income when the visitors to your blog view the adverts and the sponsored content placed by search engines like Google. The more visitors, the more the views, and so are the earnings. With that in mind, you should prioritize increasing the influx of traffic to your blog.
You can increase the number of visitors by:
- Using The Right Keywords
When an online searcher enters keywords in the search bar, the search engine algorithms use these keywords to a content that matches the searchers’ intend. If your content contains similar keywords and is relevant, then the crawlers will place it among the top search results. This implies that most searchers will visit and view the ads in your blog.
- Using Inbound Links
The presence of many inbound links convinces the search engine crawlers about your site’s authority in that niche. As such, more links can boost the chances of your better ranking on the search engine result pages.
However, not all inbound links can guarantee you better rankings. Examples of generally accepted link-building techniques include guest posting, and niche edits, among others. You can learn more on how to customize your blogs for better ranking here.
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8. Peer To Peer Lending
Peer to peer is a type of financing that connects the lenders of funds to the borrowers. The p2p loans can be secured or unsecured. For a secured p2p loan, borrowers have to pledge a valuable asset as collateral for the loan. In other words, the lender can use the collateralized asset to recover the loan should the borrower default to pay.
For an unsecured p2p loan, the borrower should have a good credit rating to qualify for the loan. Additionally, they must be prepared for high-interest rates to cover the risk of default.
P2p lending can allow you to earn a passive income because the borrowers will have to pay the principal amount with interest for the loan.
However, the interest income is partially passive since you have to dedicate your time to analyzing the loan disbursements, repayments and communicating with the p2p agent.
9. Flip-Sell Retail Products Online
Flip selling involves purchasing products at a lower price and then selling them at a higher price. You can leverage the cut-rate products on Amazon and eBay platforms and sell them at a higher price on other platforms. You will gain from the spread between the selling and buying price.
The idea is only feasible if you have an individual who can help you connect you with discounted merchandise that many people in your line have overlooked.
However, being connected to discounted merchandise does not make flip selling entirely a passive source of income because you have to identify and research a market where you will resell the products.
Also, you have to continuously research the consumers’ needs to pick the right products from the merchandise.
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10. Publishing Podcasts
A podcast is recorded informational audio about a specific topic, product, or service that any user can download on their devices for proper listening.
If you have in-depth knowledge of a particular product or service, you earn passive income by sharing that knowledge with others in podcasts. A quality podcast should be audible enough, relevant, and valuable. Otherwise, the listeners will find it useless, and they won’t subscribe to it.
Additionally, your podcast episodes should be consistent on a particular topic to maximize the number of your followers. Remember, the higher the number of followers, the higher your income.
A quality podcast can earn you income through adverts, sponsored content, premium content, and so on. You can learn how to monetize your podcast here. While generating revenue through a podcast is automated, you need to commit your time and resources to publish a quality podcast.
For instance, you need finances to purchase the recording equipment or hire a professional recording artist to record, edit and publish the audio. Also, it may take you weeks to customize the audio content and record it.
Further, you may need some time to research the competition to avoid capitalizing on a congested topic/niche.
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As you can see, most passive income sources will need an initial investment of your time and resources to create the stream of income. A passive income stream will start earning you low income during the initial stages and then increase gradually. That is promising since an investment today assures you of more returns in the future, without necessarily investing more resources.