Why Passive Income Doesn’t Work


Having passive income sounds like a great idea. Choose whatever sector it is you’re interested in (or not – you don’t actually have to have an interest since you won’t be immersed in the niche at all) and set up a business that makes money while you sleep. It’s the ultimate dream for many people, and they spend a lot of time trying to come up with creative ways to ensure it happens.


In reality, those ideas almost always fail. A truly passive business is very hard to come by; there is always something you need to do or some kind of input you need to have. If you want to flip contracts on properties, for example, you’ll need to negotiate or at least have a good team like the people at New Western to help you do so. If you want to sell eBooks, you need to have written that book in the first place, and then you need to market it actively.


If there were such things as one hundred percent passive businesses, everyone would be working in them and enjoying their free time doing whatever they wanted. Since this is not the case, we have to believe that humanity has not quite reached that stage yet.


So why doesn’t passive income work as well as we would like it to? Here are some of the reasons.

You Can’t Passively Stay Ahead Of The Competition

Despite what we’ve said above, it is possible to set up a unique business that brings in a passive income. That income is likely to be small if you’re not there to stoke the fire, but it can happen nonetheless.


It can happen, that is until your competition arrives. If you’re doing a great job (or even a mediocre one) earning money passively doing whatever it is you’re doing, someone else is going to notice, and they’re going to set up a similar business. This happens all the time in the business world, and one of the jobs a business owner must do is work hard at keeping ahead of their competition. This is not something that can be done passively. Therefore, you’ll either have to let someone else get ahead of you and start making the money that you would have made, or you’ll need to stop being passive and work on the business to boost it ahead of everyone else.


You Can’t Make Passively Keep Your Customers Happy

Happy customers are the lifeblood of any business, passive or not. If you can make your customers happy, you can be sure they will either come back to you to buy more, or they’ll tell people about you so those people will become customers. Or they’ll do both, which is even better.


If you’re a passive business owner, your customers may not do any of that. Customers like to be treated well, and if they’re getting nothing from you in terms of customer service, they may well look elsewhere. And why would they want to tell other people about you when there’s nothing to tell? If you don’t stand out and do something that makes them smile, they’ll soon forget all about you.