The Designer Practice Podcast
How Passive Income Can Grow Your Private Practice
In today’s episode, I’ll explain why passive income streams are important to add to your private practice and I’ll share with you how I’ve built them inside of my own practice.
Interestingly, contrary to its name, passive income isn’t really all that passive. Actually, for many business owners it can take more work upfront to see the results. This can discourage therapists and coaches from ever adding passive income streams inside of their private practices.
Passive Income vs. Earned Income
But before we dive in, let me explain the differences between passive income to earned income.
Earned income is when you earn a specific amount of money in exchange for working a designated amount of time.
Whereas, passive income is income that doesn’t require you to work a designated amount of time in exchange for a specific amount of money.
Here’s an example of how passive income works inside of my business:
In my business coaching practice, one of my passive income streams is selling business templates for therapists and coaches to help them with business administration. Since I’ve listed my templates for sale, I’ve received purchases at various times of the day. Sometimes I put in a lot of effort and sometimes very little effort to make sales. And sometimes I’ve received sales while I’ve slept. This is passive income.
I view earned income as instant gratification where you can see the results from your work almost instantaneously or at least in a very short or predictable amount of time.
Whereas, passive income is delayed gratification where you might have to wait a little bit to see the results.
Passive Income and Upfront Work
Passive income is a great way to make additional income. However, it’s important to understand that you do have to put effort upfront to get to this place.
When I started creating digital templates, it took me several hours upfront to get them ready for sale. There was one week in particular where I spent the entire week, outside of my one-to-one clients, focusing on creating, listing and optimizing the templates so I could open my digital template shop. But once I started getting sales the bulk of the work was done.
The Income Glass Ceiling
But the challenge with earned income is that you continue hit the income glass ceiling.
The income glass ceiling is when there is a maximum amount of money that you can earn based on the number of hours that you work.
Passive income doesn’t have an income glass ceiling.
Once your passive income stream is built and optimized there is no limit to how much you can make.
The Passive Income Block
One of the things that prevents many therapists and coaches from adding passive income streams inside of their private practice is the worry, “What if I don’t make money?”
Just like starting your private practice was, starting a passive income stream can be scary. When it comes to starting a private practice, one of the biggest fears is putting all of your eggs in one basket.
But the beauty of passive income streams is that you don’t have to put all of your eggs in one basket, you can still focus on your one-to-one sessions and build your passive income stream slowly to make additional income on the side.
It’s important to recognize that passive income isn’t truly passive but you can and eventually will spend less time and effort building them. A few passive income stream examples include starting a blog, creating digital templates, selling digital courses, or even hosting group therapy or mastermind sessions.
Conclusion
In my opinion, passive income is the key to any thriving therapy or coaching practice because it provides stability, financial freedom, and time freedom that a one-to-one only practice can’t provide, at least long-term.
Many of us started a private practice because we wanted something different than working in an organization can provide us, such as being our own boss, having our own freedom over our workday, and being able to work with the clients we want to work with.
If we are spending less time worrying about finances and more time focused on the things that light us up and that we like to do in our business, we are going to be happier and we are going to have a more successful practice. We have more time to spend with the people we care about and do more of the things that we love, inside and outside of our business.
So, what next?
I have a free quiz that will provide you with personalized information about which passive income stream best fits your personality.
To take the free Passive Income Personality Quiz click on the link in the show notes below.
