How to Set Up a Passive Income Stream as a Freelance Professional
If you’re a freelance professional, you can’t rely on a regular paycheck like an employed individual. According to the Harvard Business Review, cash flow is a frequent point of concern for freelancers dealing with late or inconsistent payments. Setting up a side hustle that earns you passive income will alleviate financial stress. Done right, passive income allows you to literally earn money while you sleep. That said, you have to put in some time and effort to set up a consistent passive income stream.
Choose a business model that matches your skills and resources.
The whole point of passive income is to enrich your life without complicating it. Select your business model accordingly. Side Hustle Nation provides a list of 70+ passive income ideas, including podcasting, affiliate commissions, and dividend investing. The key to success is choosing something that aligns with your skills and resources. For example, if you don’t know a thing about investing, don’t pursue this path. Odds are you’ll just lose money.
When it comes to personal skills, an assessment quiz like this one from Career One Stop will help you identify your strengths. Further, use your existing assets. For example, say you have a big social media following. You might leverage this into a thriving affiliate marketing side hustle. Already have the equipment needed to create podcasts? Why not record a few sessions on a topic you’re passionate about and upload your recordings for download.
Make your side hustle official by establishing it as a legally recognized entity.
Once you’ve decided on a business model for your passive income stream, you can take the formal steps needed to create a business entity. A limited liability company (LLC) is one option. It’s less complicated to set up than a corporation with more streamlined tax filing and reporting obligations. However, it still protects your personal assets in case legal troubles arise in relation to your business.
You have to formally register your LLC with your state. This requires certain steps, like designating a business name and choosing a registered agent. What is a registered agent? This is an individual or business who you select to receive legal mail on your business’s behalf. For example, documents like lawsuits need to be handed to an actual person; they can’t just be left in a mailbox. A registered agent service can take care of this for you.
Get the tools and technology you need to grow your passive income stream.
With the formalities of your business formation taken care of, it’s time to scale up your passive income stream. The right tools and technology can help. Let’s say you’re a freelance English teacher, providing courses both in-person and online via video. You decided to create a passive income stream by selling ready-made ESL (English as a Second Language) courses online.
Teaching ESL Online explains how you can scale up that business model by sending out automated emails that advertise the course for you. You just need an email automation service. Technology can also help in other areas beyond marketing and advertising. As Help Crunch reveals, technology can help automate customer service, for instance. Chatbots are one useful resource. These are just a couple of examples of how an initial tech investment can streamline and enhance your passive income stream.
If you’re thinking of setting up a passive income stream to earn extra cash alongside your primary freelance career, you aren’t alone. According to Workplace Insight, half of American workers have a “side hustle” to pick up extra cash. Follow the steps above to set up yours and start earning extra money today.
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