Eek! We’re talking about money today. Quick, plug your ears or go hide under a rock!
OK, I’m just playing with you. But you’d be surprised how many women I work with who have this strange aversion to talking about money.
They’ll let their spouses handle the finances and pay the bills. They’ll never track their expenses to see if they’re bringing in more than they’re spending. They’ll slap something together, toss it up on their business websites, and then wonder why no one wants to buy it.
I get it. Money can be intimidating, and being responsible for your own income can stir up a load of issues and insecurities. But your business and your customers are depending on you to get your money act together so you can provide the best products and services possible.
In today’s video, we’re talking about the 3 kinds of income your business needs.
I’ll show you how these different types of income can help you manage your time and energy and take the stress out of planning how you’ll use that money in the future. Let’s go!
The video transcript is below for your convenience.
Hey there! I’m Sage Grayson, and I help ambitious career women edit their habits, routines, and mindsets to balance their happiness at work and home. I’m a Life Editor…and so are you!
Today, we’re talking about the 3 kinds of income your business needs. Let’s go!
This video is specifically for those of you who have your own businesses or would like to start one soon.
It’s exciting to be your own boss and run your own company. You’re creating the products and services, talking with clients, and marketing your ass off.
And at the beginning, you’ll probably be having so much fun that you won’t even notice you’re not making any money…or even care for that matter.
You’re not doing it for the financial gain. You’re doing it because you’re following your passion!
Can we get real here for a minute?
Yes, of course I want you to enjoy what you’re doing and have fun while you’re helping people.
For some of you, that might be hard to admit, but it’s the truth.
You must earn money through your work to have a business, and it’s by earning money that you’ll be able to spread your message and uplift the people who need you on a larger level.
Starving artists don’t change the world. And they certainly don’t properly take care of themselves or their loved ones.
OK, so if you’ve got to earn money through your business, how do you do that? Should you just throw something together and slap a price tag on it?
There are 3 kinds of income you can earn though your business that will help you manage your time and energy and take the stress out of planning how you’ll use that money in the future.
They include active income, passive income, and consistent income.
1. Active Income
We’re starting off with a real no brainer!
Active income is money you earn by being physically present during the delivery of the product or service. You are right there doing the thing.
These folks need to look me in the eye, ask their questions, and get specific advice from me in real time. There’s no Sage Robot doing my work for me.
beep…beep…beep…bloom where you are planted…beep…beep…beep
Let me give you some more examples. We’ll use a photography business and a coaching business because those are the types of businesses the majority of my clients have.
So if you’re a photographer, your active income is when you’re on location shooting a wedding, taking headshot photos for a business person, or teaching a class.
If you’re a wellness coach, your active income is when you’re doing a personal training session or at your client’s house throwing away all the ice cream and potato chips in her kitchen.
You can charge the most for active income because your clients get YOU. There’s only so much of you to go around and you don’t work 24/7.
But what happens during those hours when you’re asleep, blissfully dreaming about new office supplies and planners? Ahhh….
2. Passive Income
Can you earn money in your sleep? You betcha!
Passive income is money you earn without having to be there doing the thing. It’s completely automatic.
For my business, I earn passive income through the sales of my digital products like my Edited Year Planners. Someone will click the Buy Now button on the sales page, enter their credit card info, and they’ll be sent the planners immediately.
All while I’m doing other things like conducting coaching calls, sleeping, or watching Star Trek reruns.
Let’s say you’re a photographer. Your passive income could be a digital guidebook about the 10 mistakes brides make with their wedding photography or a training video about how to use your digital camera.
If you’re a wellness coach, your passive come could be a recipe book or a video series of your best strength training routines.
You create the thing once, then set up your payment processor to deliver the product without you having to do anything.
Active income gives your clients that personalized touch and brings in the big bucks. Passive income gets your information out to a wide audience while managing your time and energy.
This is all well and good, but if you’re like most entrepreneurs you’ll watch your income go up and down throughout the year.
If only there were some way to plan how much you’ll get paid and when.
I’ve got you covered!
3. Consistent Income
No, this isn’t a trick. You can have consistent income when you run your own business.
Consistent income is subscriptions or installment plans, and these can be either active or passive.
A subscription is when your clients or customers pay you the same amount every month or every year for the products and services you provide.
In my business, the Life Editor Clubhouse is an annual subscription. It automatically charges them once a year.
My coaching clients and the Life Editor Academy mastermind group are monthly subscriptions where they are automatically charged once a month to continue to get their one-on-one calls.
A photographer might get consistent income by setting up a stock photo subscription where her subscribers are charged monthly for 10 photos they can use any way they want.
A wellness coach might set up a membership site where she shares a new recipe, a new workout, and a new meditation once a month for subscribers.
Consistent income helps you plan how much money will be coming in the future. Now you can plan when your debt will be paid off, when you can afford your next vacation, and when you can hire team members.
So those are the 3 kinds of income your business needs:
- Active Income!
- Passive Income!
- Consistent Income!
Look at your business and figure out what kinds of income you’re already generating and where you have an income gap. Then create an offering to cover that form of income.
If you like this video, please come on over to SageGrayson.com and sign up for my Editor’s Toolkit. You’ll get weekly updates from me plus sage advice I only share in email.
Thanks for watching. I’ll see you soon.
This post focuses on Step 3 of the Life Editing Process, Add Good Habits and Routines. For more about life editing and what it can do for you, click here.