If you are a solo entrepreneur, and you have to actively perform some sort of work to generate income, your income will forever be limited. Not enough hours in the day. (Or not enough “me” to go around, as I used to say.) If you have employees helping generate additional income, that’s one solution. Another is to find sources of recurring revenue.
Scott Allen at About.com offered a list of tips on what he calls “automating income”. He wrote it in the context of “better bootstrapping”. As he explains it, “…one of the most common reasons that bootstrap entrepreneurs shut down their businesses is cash flow problems. This is especially true for those who are married with children. Even if the business is making money overall, a few months with little or no income — par for the course for startup businesses — can pressure or force the entrepreneur to drop the business and go back to a traditional job to support the family.” His solution to the problem? Recurring revenue.
Some business models are specifically recurring revenue models. A friend of mine, for example, runs a payroll service. Sign up clients, and assuming you give them the kind of service they require, their business follows on month after month.
Allen’s suggestions mostly involve having the ability to write or speak and deliver information to others. But one of his suggestions could work for many entrepreneurs, and that is Affiliate Marketing. In other words, sell other people’s products instead of (or in addition to) your own. See his description of ways to do this.
Give some thought to how you can create an income stream that doesn’t demand your constant attention. Anyone want to suggest some ideas?