A Passive Income Success Story

I didn’t have a business plan when I left corporate America and launched my career as a self-employed software development consultant and trainer. Eventually I came up with an appealing business objective: Earn a living while I’m asleep. That lofty goal then forced the question, “How am I going to do that?”

As an independent sole proprietor, every penny of revenue came through my personal efforts. The trick was to figure out how to produce as much income as possible with little effort. I came up with several ways to generate ongoing passive income streams after some initial investment of effort. Collectively, these have yielded more than six figures of revenue for quite a few years. Perhaps some of these seven ideas will work for you.

Income While You Sleep #1: Book Royalties

Book royalties are a gift that can keep on giving, with some caveats. Follow this simple procedure:

1. Write a book. After authoring fourteen books, I can tell you that this is not trivial.
2. Make sure it’s a good book. Ideally, it will accrue many positive reviews, and readers will recognize the contribution it makes to the practitioners in your field.
3. Make sure the book fills an important niche in the literature of your domain. I typically identified gaps in the software literature and attempted to plug them, with quite good results. It’s best if your topic doesn’t face a lot of competition or if you have something innovative and unique to say.
4. Tell people about the book. This generally means going with an established, traditional publisher rather than self-publishing. You won’t get as much money per copy that way, but you certainly will sell more copies. Expect to spend a lot of effort on promotion, no matter how your book is published.
5. Write a book that has a long shelf life, not one that deals with the latest fad in your field or with a technology that will be obsolete in a year.

Don’t expect to live on your royalties, as few technical and professional books sell zillions of copies. My most popular book, Software Requirements, had sold about 140,000 copies in three editions over 25 years. That's very good for a technical book. I know a handful of people who make $100,000 or more a year from book royalties. I’ve never approached that lofty pinnacle myself. You would be surprised at how little authors make per copy. Nonetheless, they do add up.

Once the book is conceived, planned, outlined, proposed to a publisher, contracted, written, reviewed, revised, edited, proofread, published, and promoted, all you have to do is cash the royalty checks. What could be easier?

Income While You Sleep #2: Online Writing

I now have more than 200 articles posted on my Medium.com account, on a wide range of topics. I’m enrolled in Medium’s Partner Program, which places my articles behind Medium’s paywall. Each time someone views an article or interacts with it through clapping, highlighting, responding, or following me, I get a penny or two (literally). In theory, as long as an article remains posted, someone might read it. The pennies continue to trickle in, and they add up.

The algorithm that Medium uses to calculate revenue is obscure. I can have two articles with similar access statistics that vary considerably in earnings. It’s a mystery. Some of my articles have drawn more than 20,000 views; others have drawn just a few dozen. I’ve found that the significant lifetime of an article is only a few days. I’ll get a lot of viewers shortly after posting a new piece, but the traffic soon declines considerably. Yet the income trickle continues.

There are other platforms for posting your writing or other media content online and perhaps generating some income, such as Substack. Don’t expect to live on the revenue, but posting your writing shares your knowledge, increases your visibility, and passively markets your skills and services.

Income While You Sleep #3: eBooks

Some years ago, I wrote several ebooks of approximately seventy pages each on various topics. I sold them as PDF downloads through my company’s website, both as single-user copies and as site licenses so a company could distribute them broadly throughout their organization. These ebooks were inexpensive, but they constituted another small revenue stream that required negligible effort on my part following the initial writing investment.

It is now easy to publish ebooks through online resources like Kindle Direct Publishing, Smashwords, IngramSpark, and others. I’ve also self-published two full-length books, in both print and ebook versions. I set a goal of never having a reader look at one of them and say, “I think this book was self-published.” We all know what those look like. I used professional editors, proofreaders, and cover designers to give them a polished look. Sales were less than I hoped for, but I’m still happy I wrote and published them. Each book brings its own rewards.

Income While You Sleep #4: Licensing Content

Most of my work through my company, Process Impact, has involved training. The income from delivering training by yourself is linear: if you teach two classes, you make twice as much money as if you teach one class. To increase the income-to-effort ratio you must disrupt this linear relationship.

One option is to hire other people to teach classes for you and split the revenue. This lets you stay home while someone else wrestles with airplanes, hotels, rental cars, weather, computers, projectors, and students. Having employees or subcontractors complicates your accounting and taxes, at the very least. Think carefully about whether you want to be responsible for someone else’s livelihood, negotiate salaries, provide insurance and other benefits, and so forth. I did not.

I tried a different approach. For many years I’ve licensed my courseware to other companies. Some of my licensees teach the courses internally to their staff. Others deliver classes to their own clients or through public seminars. Licensing has paid off impressively for me.

Obviously, you must first have content available that others find valuable. The material must be structured and packaged such that other people can easily learn to present it. Whenever I developed a new course I created detailed instructor notes and supporting information as I went along, with the intent of licensing it eventually.

After we execute the licensing agreement, I’m not involved with how a licensee uses the courseware. I don’t know how much my licensees charge, and I don’t care. I often point prospective training clients to two or three licensees so they can consider alternatives to having me teach the class personally. At the end of every calendar quarter, I ask each licensee if they delivered any courses. If so, I send out an invoice for the appropriate royalty amount.

You can publish articles in multiple forums as well, provided you’re careful to grant each of them nonexclusive publishing rights. I’ve licensed dozens of articles, both new and adapted from my books (like this one, which is from my book Successful Business Analysis Consulting), to multiple companies and websites, collecting a modest fee each time. These license fees significantly augment the royalties I receive from the source books.

I’ve licensed various other pieces of intellectual property to people who wished to incorporate them into their own products, courseware, and publications. These materials include white papers, articles, project document templates, figures or tables from my books, and slides to accompany one of my books when it’s used as a university text. Okay, I’m not asleep when I work out those deals, but the effort is minimal.

Income While You Sleep #5: eLearning Courseware

Years ago, I thought of packaging my courses in a CD- or web-based format so people could take my classes from the convenience of their own chairs. I settled on an eLearning format that closely mimics my well-received live presentations. I also created on-demand webinar versions of several short presentations in this same eLearning format. I sold hundreds of both single-user and site licenses of my eLearning courses.

Creating a course is a lot of work. Preparing slides, writing scripts, recording and cleaning up the audio tracks, synchronizing slide animations with the audio, publishing the whole as a deliverable course, and testing it takes considerable time. After making that initial investment, though, the unit delivery cost and effort are minimal, and the profit margin is high.

There are numerous platforms available now to host your eLearning and video content and bring it to the world. I also have dozens of videos, short and long, available on YouTube. I haven’t monetized them, but I could if I chose to. Maybe there’s another income trickle out there waiting for me.

Income While You Sleep #6: Other Products

I’ve developed and sold a variety of other products through my website. None generated massive revenue, but it didn’t take a great deal of work to create them, and the dollars continue to come in.

The most popular product by far was the Process Impact Goodies Collection. This is a set of more than 60 document templates, spreadsheet tools, sample project deliverables, checklists, ebooks, webinars, and other useful items for software projects. Customers can buy small groups of these items in individual sets for a few dollars, or they can purchase the entire collection in a single big zip file for more dollars. Using e-Junkie’s automated purchase and download mechanism means that it takes me zero effort to sell one of these items. I just need to transfer the payments out of my PayPal account once in a while.

Income While You Sleep #7: Affiliate Programs

Affiliate programs constitute another source of free money. When visitors to your website click through certain links to a vendor’s site and buy products there, you get some percentage as a commission. The Amazon Associates program is perhaps the best known of these, although I’ve done others as well. To see how it works, follow this link to the Amazon.com page for my forensic mystery novel, The Reconstruction.

Even if you don’t buy the book (what?!), once you’ve clicked in through a link like that, you may then browse around Amazon to your heart’s content and buy lots of other stuff. I’ll receive a small percentage of whatever you spend. It costs you, the customer, nothing.

Affiliate programs can work the other way, too. I enlisted several companies to resell my eLearning courses; when one of their customers buys a course, we split the revenue. Their marketing reach extends to customers who might never find me on their own. Everyone wins.

Is this a great business plan, or what?