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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
A passive income stream could change your financial outlook. If you’ve struggled to stay on top of your bills, it could put you on firmer ground. Or maybe you’d like to save for a deposit on a home or invest more.
Whatever your reason, designing a small business to maximise passive income could be the start of something big for your future. After all, sometimes, a side hustle turns into the real deal.
But how do you get started? And what kinds of businesses have the potential to bring in a passive income stream? Let’s answer those questions.
Starting a business takes thought, planning and guts. But you certainly don’t have to start big, and you can design it to minimise risk. So here are a few early considerations.
Even a small side hustle deserves thoughtful planning. After all, you don’t want to waste your time in activities that won’t lead to sustainable growth. So what should your business plan include?
Most people starting a side hustle start small, without any additional employees. But if your business requires the help of others, you’ll want to include hiring in your plans as well.
The infrastructure part of the planning may seem dull, but you do need to get it sorted. The good news is that once you’re done with these tasks, you’re ready to roll.
Acquiring an ABN is an excellent place to start because you’ll need it for opening accounts with suppliers. There are no fees involved with obtaining your ABN, and you can apply here.
If you think your turnover will be higher than $75,000 per year, you’ll need to register for Goods and Services Tax (GST). Most Side Hustles do less than this, at least at the start, so you can probably avoid this compliance issue for now. But do keep it in mind as you grow.
Next, you can register your business name using the Australian Government’s Business Registration Service, which combines several business and tax registrations in one place. A small fee applies.
To maximise passive income, you’ll need a way for people to pay you. Most online platforms offer built-in merchant facilities so that you can use theirs. But if you want to process transactions outside of a platform, you’ll need a solution of your own. Start by talking with your bank about services like Stripe and Square.
At some point in the first year or two of your side hustle, have a chat with an accountant or business adviser. You’ll need to know which items are required by the Tax Office. Also, your adviser can help you decide on the best structure for your business.
So that takes care of the basics, but what will you do to earn passive income? The following ideas have been successful for some entrepreneurs. First, of course, you should consider your unique talent stack, interests, resources and preferences.
You probably know a lot about some topics, and you might already help people to learn about those topics. So why not turn your expertise into a passive income stream?
You could create courses around those topics, mapping out lesson plans and recording video segments to illustrate instructions or principles. If you have web-building skills, you could create landing pages for your courses. Or, if you prefer to leave that work to the experts, you could use sites like Thinkific or Teachable to host your content.
Along the same lines, you could package your knowledge in book form. Many writers have discovered that self-publishing is more lucrative than shopping their writing to major publishers. Once you’ve created and published your book, it can generate a passive income stream as long as people are interested in the material.
You can publish your books in print (using print-on-demand services) and ebook versions, but you’ll need to find a way to market them to people seeking the information you have to offer.
If you have developer or programmer skills, you might want to try creating apps for passive income. There are a couple of ways to go about it. First, you could charge a fee for people who want to buy your app. Alternatively, you could make your app free and monetise with advertisements.
If you have the time to read annual reports and market information, investing in stocks could be a method of generating passive income. You have to keep in mind, though, that you have far less control over other companies than you would with your own.
Depending on where and when you buy, real estate can provide passive income when you rent it out to tenants or resell it for a profit. With property prices rising so quickly in Australia, people who purchased dwellings just a year or two ago are already realising significant earnings.
Like buying property, hosting an Airbnb can provide a steady income stream, even if you’re just renting out a spare room in your own home. Additionally, the platform has expanded into “Airbnb Experiences,” allowing people to host events, meetups and tours of your local city.
If you enjoy blogging or posting on social media, you could earn passive income through affiliate marketing. Just about every big brand has an affiliate program, so you can choose to help sell products you already like and use. Just read carefully through the terms of service so you understand what kinds of referral bonuses and commissions you’d be earning.
These are just a few ideas of small businesses that can maximise passive income. If you’d like to discuss your plans with a business expert, reach out to us at Altus. We can help you with your business plan, strategy, startup activities, accounting, taxes, and other business-related concerns. We’re excited for you, and we’re here to support you.
Set your business on the right path with this simple guide.
Make sure you’re on the right track with this online checklist.
© 2022 Altus Financial, All rights reserved.
Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
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