I have a new pet peeve! It’s people who spout off business advice half-truths. (And before you worry, it’s no one in the Abundance Facebook Group; those folks will tell you the full truth). These half-truthers know it’s more complicated than they say it is, but they don’t just fess up that a part of their brilliant idea/system sucks. Having bought into some of these, I want to tell you some pitfalls of these options so you can make a better informed decision. I want to stress that these strategies are all good for business, but there is a layer of complexity that you need to consider before diving in. Also, you may have noticed, starting your practice has a set of learning curves and distress tolerance opportunities. These options have more of that to pile on.
The Myth of Passive Income
Often the folks in the Abundance Practice-Building Groups will ask about “Passive Income.” It’s this really alluring idea: make money in your sleep, create a product so you aren’t trading time for money. Faaaaantastic, right?
Here’s how we fantasize about that: I think of an e-course idea. I put it on the internet. I wake up in the morning to dollar signs and adoring e-course fans. That happens over and over and over again until I spend all but my 4 hour work week basking in the warm glow of the sun in some tropical or European destination. I’m tan but not wrinkly and hotter than I’ve ever been in real life and my children play nearby without getting sand in their eyes or a sunburn. God, I love passive income.
Here’s how passive income usually works: think of an e-course idea. If you’re business-smart, you find some way to see if it’s something your clients actually want. You research the market for it. You then research platforms on which to host it. You write the copy, film the videos, create the worksheets or handouts, edit all of them or hire that out (see below), upload them to the platform with hopefully few snags. Maybe you hire a developer to fix something you accidentally broke or to keep it from looking ugly and boring. Maybe you hire a graphic designer because most of what you made in Canva is really not that awesome. You connect the payment processor to your platform. You figure out how to price your product. You figure out how to make your payment processor and your platform do what they’re supposed to.
That’s the easy part. Also, all these things cost money.
Now you market. You aren’t likely to create a true passive income stream that continues to give back with a few Facebook posts. You need a true marketing strategy. Maybe you follow Launch by Jeff Walker (which I recommend you get for this kind of thing). Now you have no less than 7 million emails to write as well as 3 free training videos to write, create, film, and edit. You’ll probably need a Leadpage for it. You’re launching this to your email list… do you have one of those? If so, you’ll probably get between 1-4% of your list to buy from you after all that work. That also means you’ll have to launch again and again in order to get another 1-4% to buy from you as your list grows.
Maybe you create some Facebook ads. You’ll throw at least $5/day at those and you’ll need to stay on top of your analytics to see if it’s a good return on investment. Speaking of analytics, you’re hopefully checking to see where your buyers have come from and how far they’re getting in your course. You’re analyzing where they stopped to see if you need to tweak content. You’re asking your customers about their experience and implementing the feedback somehow.
If you’re looking to make a significant return, you’re marketing all the time. If people don’t know you’re product is there, they won’t know to buy it. You can’t just create it and expect people to give you money for it. You have to build trust with them. At some point, if your product is needed, well done, and your marketing has been effective, it becomes passive, but only after a shit ton of work.
Just Hire it Out!
Another really tantalizing idea is that we can hire out the things we don’t know how to do or don’t want to do. Not to sound like a total snob, but good help is shockingly hard to find. Your business is your baby and you want someone else to be as into it as you are, but no one will be. Your business is not their priority.
It’s my (hard-earned) opinion that you need at least a cursory knowledge of each aspect of your business. So if your SEO person doesn’t even make Yoast compatible with your WordPress theme (in non-tech talk, he didn’t even really flip the switch to turn it on), much less even start to optimize your website for search engines even though you paid him to, you need to be able to tell that before 9 months have gone by and your money is long gone. (Happened to me.) Or when you’re up against a deadline and the graphic designer keeps not fixing the incorrect date on your PDF even though you keep having this conversation “The date is wrong, it needs to be this” “ok great, I’ll fix it and send it right over” and she keeps sending you the same wrong-dated PDF literally 6 times, you need to know how to cut her loose and fix it yourself before that deadline passes. (Happened to me.) Or your developer disappears into thin air and won’t tell you how to make live the next module in your course (happened to me, never figured it out). The idea of a general assistant is awesome (and mine is great!), but then you need management training. Being a therapist is arguably a liability when it comes to managing staff (think of all the therapist bosses you had at agencies… you get it now, right?). So, if you are going to hire out, get some management training and hire well.
Multiple Streams of Income Are Where It’s At
I think about Multiple Streams of income like having multiple spouses. There’s a part of that that sounds great but there’s the reality where it’s a LOT of responsibility and time management. Let’s take the e-course example from above. That is a lot of work and it’s a lot of work you’re not getting a financial return on for a while. It’s time away from building your practice which usually has a faster return on investment.
Maybe you’re taking on a position as adjunct faculty somewhere. That’s perfect if you love teaching– do it. If you don’t love it, don’t just for the paycheck. It’s a huge financial loss per hour (I’ve made more in 2 days of private practice than some of my adjunct teaching friends have made in a semester).
Both the passive income streams and the other jobs take your time away from your practice, but that doesn’t mean it’s unattainable. Your time is better spent marketing for one business until the referrals are self-sustaining. Once you’re full and stay full, feel free to devote your previous marketing time to a new adventure. Otherwise you’re likely to build slower and feel scattered.
And the relatively few hours we work in private practice, those need to stay low! Please don’t cram another job in with your 20-30 hour private practice. We need those hours for self care, fun, connection, vacations and general galavanting.
Alrighty, that was more rant-filled than my usual post. I know some of you will disagree and I’d love to hear your perspective. As usual, I don’t claim to have the one and only answer, just some very strong opinions and trust that you know what’s best for you. Comment below whether you agree or disagree.
Allison Puryear is an LCSW with a nearly diagnosable obsession with business development. She has started practices in three different states and wants you to know that building a private practice is shockingly doable when you have a plan and support. After retiring her individual consultation services, she opened the Abundance Party, where you can get practice-building help for the cost of a copay. You can download a free private practice checklist to make sure you have your ducks in a row, get weekly private practice tips, listen to the podcast, hop into the free Facebook Group. Allison is all about helping you gain the confidence and tools you need to succeed.