Everyone talks and dreams of passive income and it makes sense. Why wouldn’t someone want to earn money while they sleep or with some sort of business that requires no regular work? Many people aspire to own their own streams of passive income, but not everyone is able to actualize that dream. What makes some businesses successful and others not?
Trend towards Passive Business
Over the past few years, I have seen an increasing number of businesses become even more passive. One of the best examples is Redbox. Redbox is a movie rental business that does not require regular employees at the location where customers can pick up and drop off movies. It isn’t another blockbuster or rental movie store. As I reflect on the ingenuity of Redbox, I would venture to say that it has transformed the video rental business in the country. Blockbuster stores are being shut down because they cannot compete with Redbox. So, what is it that makes them so successful?
Why Passive Businesses Excel
If it isn’t obvious passive income, or businesses which are more passive than the alternatives, succeed because of the lack of labor costs. By getting rid of the regular fees, you are therefore able to lower the expenses and beat out the competition. While this may be the key ingredient, you can’t just convert any business into a source of passive income. As I see it, there are two key ingredients for passive businesses.
Not all ideas can be passive. For that reason, the first trait of a successful passive income stream is the idea. It all starts with the idea. If something, like a service that does not have scale, is not able to be passive, no matter how hard you try, you will fail. Renting DVD’s out of a machine is a great idea. The second and equally important trait is the equipment required to accept payment. Without top enterprise merchant solutions or methods to accept and/or process forms of payment electronically, you will lose the passive aspect. Having electronic hardware to process payments without any employees drastically increases the degree of profit and strengthens your ability to earn passive income.
If you are able to come up with an idea for passive income and support it with the right equipment, you will be on your way to earning passive income.