Practical Ways to Generate Passive Income for Your Freelance Business

Freelancing is about as simple as it gets for a business model.

You provide work to a client and the client pays you for the work. When all goes well, this can lead to a lucrative and rewarding career that also allows for a flexible lifestyle.

But the freelancing model revolves around trading your hours for money. And it can be difficult to scale your business when shouldering responsibilities outside of your actual work, such as research, marketing, and customer service. That’s why many freelancers eventually seek ways to generate passive income.

Set Up a Sole Proprietorship

Having the right business structure in place is critical, especially when you start to build passive income into your business. Many freelancers choose to operate as sole proprietors. Not only is a sole proprietorship the easiest structure to set up, but it’s also the least expensive.

Moreover, it typically provides the lowest tax rates because it allows you to deduct business losses on your personal tax return when you report your business income.

Find Your Niche

Having a niche is essential as a freelancer, especially when you are relatively new to the game. When you develop expertise in a specific area and can meet specific needs, it ultimately gains you more clients than when you try to appeal to a broader audience. Whether it’s writing articles for dentist offices, developing email sequences for eCommerce stores, or creating videos for craft breweries, find your corner and build out from there.

So how is having a niche related to passive income? Every step mentioned below will prove more effective if your business is operating in a profitable niche.

Create a Blog and Online Courses

You’ve developed unique expertise, and you must build an audience to generate passive income from it. One of the best ways to do this is by starting a blog on your website. Focus on creating well-written content that provides valuable information to your target audience, then market your blog via social media and email.

Over time, you’ll build your personal brand by establishing yourself as an expert in the niche, which will significantly grow your following and lead to more clients and sales.

If you want to boost your brand even more, consider creating online courses related to your niche. Applying the same principles as you do for your blog (providing valuable information), video courses can expand your audience and further solidify your reputation in the industry.

Outsource Projects

Generating passive income will require you to step away from being involved in every facet of every project. This is where outsourcing comes in. By hiring other freelancers to perform the tasks and projects you don’t have time for, you can take on more clients and build your business without burning yourself out.

For example, working with a company like Ghostwriters & Co. would allow you to consistently post insightful blogs in the precise tone your business wants to use. Among other benefits, this could exponentially grow your customer base and boost revenue.

Become an Affiliate

When you’ve built a solid online presence (through your blog, video content, social media accounts, etc.), you should consider becoming an affiliate. This essentially means that you promote services and products for other — often very large — companies. By establishing recurring commissions, you can feed a steady stream of passive income revenue.

While freelancing comes with many advantages, it can be difficult to scale your business past a certain point. Creating revenue streams of passive income allows you to get over that hump and make the most of your time.

Along with considering the ideas above, keep researching ways that you can generate passive income for your freelance business, and start strategizing how you can take your career to the next level.

Adam Taylor left his corporate job to work as a freelancer and hobbyist writer, chasing a balance between the work he loved and the life he wanted. He’s taught himself how to work smarter, not harder. He’s committed to separating work and home so that he can enjoy both. Now, with taylorandNoel.com, he’s sharing his best practices with other freelancers, in hopes they can do the same.