Passive income rules to live by

What’s passive income?

It’s money that you have coming in that doesn’t involve you having to i.e. spend an hour of your time to receive an hour worth of pay.

Very clear passive income earnings that most people understand is a “rental property”. You receive money from it and you don’t even live there.

So along those same lines, you can look at a software app that does a similar thing, i.e. you build a website, you put advertisements on it and it makes money for you as long as you have traffic coming to it.

This post isn’t about learning what “passive income” is, but a couple of rules that you should always remember when picking out your new business idea are:

  1. Have  “Automated Sales”
  2. Have “Recurring Revenue”
  3. Keep your “Accounts Payable” to an absolute minimum i.e. Get to be as “debt free” as you can as a daily goal
  4. No “Account Receivables”
  5. Look for ideas where you “Sell Tools” or “Utilities” i.e. if you lived in the age of the “Gold Rush”, selling shovels made you a wealthy person
  6. Do as much as you can as a “Soloprenuer” because the moment you take on a partner, your profits split in two

Questions to ask when researching new business opportunities

When you’re looking for new business ideas, it’s always great if you can go out and interview some actual people who would be using your product.

I believe I got these questions from Dane Maxwell who talks about how to start a business as his mantra.

The idea for brainstorming new business ideas it to “Find The Pain”!

Once you find the pain of any business, it’s a money making opportunity. You should look to be “Cheaper, Simpler, Smaller and More Convenient” than the rest which is a quote attributed to Clayton Christensen from his book The Innovators’s Dilemma.

Here’s a couple good ones to ask as you interview the people who would be users of your new product:

  1. What is the most important activity in your business?
  2. Is there any pain associated with that activity?
  3. What problems cost you the most money?
  4. What is the most painful part of your day?