I’m working with a client right now who is a budding serial entrepreneur. He’s a hard worker and currently has 4 small businesses built to a point where they are each earning an income at varying levels of profitability. He has ideas for several more businesses and is working with me on the sales funnel for the fifth business.
As we worked on his sales funnel together, it became apparent that he was time-starved. This guy’s businesses were successful but he was wearing himself out. At first, we couldn’t easily pinpoint where his time was going. We knew he was spending his time on marketing and selling for his businesses, but it just wasn’t clear exactly where he was spending his time while marketing and selling for those businesses. Although adding another business would be good for his bottom line, we grew concerned that he could burn out completely.
In the “Marketing and Sales” columns, we included the primary activities he performed in each sales funnel, and we divided up those activities into passive marketing and sales activities and active marketing and sales activities. (I would define “passive marketing and sales activities” as those things which are done once and only monitored and tweaked from time to time, while “active marketing and sales activities” require a lot more attention and ongoing effort).
You can see that he has a lot of very active marketing and sales activities in his sales funnel: Blogs, articles, ezines, proposals, etc.
Then, in the “Offering” columns, we included his main income-earning activities, divided up into passive offerings and active offerings. (These definitions are a little more common in the online business world – passive offerings are those products which are built once and sold over and over while active offerings are those services which are performed anew with every transaction).
You can see that he has a lot of very active offerings – mostly consulting and freelancing gigs.
These are successful businesses for him, but he’s basically maintaining four separate sites with four separate sales funnels! That’s not necessarily a bad thing but it can be time consuming, especially because he has four separate active offerings.
And here we were, trying to build a sales funnel for a fifth business and thinking about where he would find the time to grow that business. He is an avid blogger and he was trending toward blogging. And, he is an effective consultant and he was trending toward consulting. But after creating this chart, it became clear that blogging and consulting were probably not a good fit for his next business; where would he find the time?
In fact, we started talking about what he could do in all of his businesses to move toward a more passive sales funnel and a more passive set of offerings. We don’t want to eliminate his consulting, freelancing, or teaching work completely, but we do want to help him make the most of his time.
If you find yourself in a similar situation, here is what I would advise: Be intentional about moving toward more passive businesses. Now, I’ve never been one for a “set it and forget it” kind of business. I think that’s often just snake oil when you see it offered. However, there are effective ways to automate parts of your sales funnel to make it a slightly more passive effort for you (even though you should still keep an eye on it!), and there are ways to create offerings that take less effort on your part every time you sell one.
You don’t have to retool your entire business from scratch to go completely passive, but you should slowly implement passive marketing and sales activities and passive offerings to allow you to spend time on the active stuff.
So, what kind of passive marketing and sales activities are there? I would suggest the following:
- Ads (print, pay-per-click, etc.)
- Affiliate marketing
- Sales letters
- Word of mouth
(And remember, when I say “passive”, I would still recommend that you keep an eye on these things and tweak them from time to time). Outsourcing or delegating some of your active sales and marketing activities is a good way to make it passive for you (but there is an associated expense, so make sure your revenue can bear it).
And what about passive offerings? I would suggest the following:
- Ebooks, ecourses, and other downloadables
- Ad revenue (i.e. AdSense)
- Affiliate revenue
- Membership sites
- Pre-built templates or licensed products
- Branded merchandise
If you’re starting your first business, my advice would be to start with an active sales funnel (active marketing and sales activities) and active or passive offerings (sell both!). Start with an active sales funnel to maintain total and immediate control over how well it’s working. Over time, you can move your active sales funnel into a more passive one by automating or outsourcing.