When you take the plunge into starting your own business, whether you’re going solo or becoming a franchisee, there are often a million and one things to think about or setup. Don’t let your income become one of them.
Residual income is also often referred to as passive income. It is income that you receive after the completion of the income-producing work is completed. Generally speaking it’s because once it’s all setup, it will take care of itself and entrepreneurs will seek to achieve it by gaining the greatest amount of profit for the least amount of effort. In the world of personal finance this can mean investing in real estate and establishing a rental income for example. In the case of activ, your own marketing agency, this can mean relying on client retainers.
In the world of managing large client projects like the creation of a brand new website, it can often take some time to get it to a completed state. With the best will in the world, our clients are busy people and will need time to feed back with amends before they’re website can go live and before you’re able to send your invoice. You’re therefore not really able to rely on income from one-off projects like this where the work is ongoing. Furthermore, this income should be considered a bonus on top of residual income that you can use to re-invest or top up your basic salary. Your monthly income should be covering your overheads as a bear minimum, particularly in your first year of trading.
In the case of a marketing retainer, you often create a monthly package of services for the client that last for a 12 month contract. Once the initial work is in place, (because no residual income starts off as residual income), it’s just a case of spending some time each month to complete the monthly requirements. Even better, you can outsource the work for the retainer to our head office team so you can focus on additional revenue streams. Even residual income requires a certain level of upkeep or maintenance, so it’s hugely beneficial that the head office team are here to support that element for you.
The income from a monthly retainer creates a much needed consistent revenue stream for your business, much like a salary. It’s from this consistent revenue that you can also pay yourself your basic salary.
Another example of course is to create or setup a reproducible service or product that once in situ can be purchased directly by a client with little to no involvement or effort from yourself. Take the case of the activ Digital Business Card. One of our many nifty digital services offered to clients that have been created by our amazing developers and available to purchase online for individuals in business or in bulk for larger companies.
The key is identifying areas from which to secure your residual or passive income.
Advice like this is available regularly from the head office team at activ Franchise when you make the decision to become a franchisee with us. Along with other benefits like support in completing projects or monthly retainer requirements for your clients and training in specific areas of marketing.