If you’ve been working in the digital space for the past few years you have surely heard the phrase “passive income.” It’s a craze that’s everywhere online at this point. And with good reason.
Passive income is a business model that fully embraces the thing the Internet does best: exchange information. It may be tempting say, “well, all a computer network really does is exchange information,” but that’s omitting the fact that the Web is also adept at one other type of exchange: the monetary sort.
Everybody is talking about passive income, but the truth is, few know exactly what it takes to be successful with passive income. There are a handful of great resources out there to help you get started with passive income (including Pat Flynn’s Smart Passive Income blog/podcast and Tim Ferriss’ book, The Four Hour Work Week, the latter of which some love and others hate but which brought a lot of attention to passive income upon its publication, nonetheless).
What’s clear is that there is something to this whole passive income deal. While sites like those are helpful if want to get started with passive income from an entrepreneurial standpoint, we wanted to bring you something a little different, as only we can.
You see, around here, our expertise is in creating, sending, tracking, and signing documents online. Since passive income is all about the hands-off, online experience outlined by the likes of Flynn and Ferriss, we want to support you in your efforts with the documents that you can put in the cloud as you execute your own passive income business plan.
Here are five documents you must have for your online passive income business.
Passive income business document #1: Business plan
Every business starts with a plan.
But a business plan is not a big, scary thing (though many people are so terrified of putting one together that they allow that fear to prevent them from ever starting their business).
Your passive income business needs this document to act as its high-level governing document.
The parts of a business plan are as follows:
Products and services
Addendums (if any)
To see a complete breakdown of each of the major sections of a typical business plan, grab our free business plan template (which also tells you how to make a nifty profit spreadsheet as an added bonus).
Passive income document #2: Non-disclosure agreement
If you’ve read The Four Hour Work Week, then you know that outsourcing menial tasks is always a part of passive income. As you work to make your life easier, you’re going to open up your behind-the-scenes process to freelancers and virtual assistants around the world.
To protect your interests, you need to get comfy with creating and sending non-disclosure agreements as part of your recruiting process. You’ll want to ask each person you hire for outsourcing tasks to sign a non-disclosure agreement to prevent them from stealing your ideas and personal details – or at the very least, to strongly deter them from doing so.
As Tim Ferris points out in The Four Hour Work Week, the risk of having your idea or information stolen by a freelancer is marginal at best, but we strongly advise you to have a non-disclosure agreement (also known as an NDA) in place, in case the worst happens.
You can find a handy non-disclosure agreement template, right here on our site for FREE, to help you get started outsourcing your life right away.
Passive income document #3: Consulting contract
As many passive income earners will readily tell you, information is the business. The only way to spread information is to share it.
To really make the most of your passive income business, you need to be willing even to share how you made it. This knowledge is valuable and one way that you may wind up sharing it is through consulting – teaching others how to do what you have done.
That means you will need a consulting contract document. A consulting contract document is a document outlining what your consulting services will include, their duration, and the expected outcomes.
Some questions to ask as you develop this document are:
What work will I provide as part of the service?
What actions will be expected on the part of the customer?
How many consultations will this contract facilitate?
How long will each consultation run?
What results should the customer expect?
What kind of guarantee will there be on the consultation?
What is the exit plan? Will further consultations be implied? Can the contract end early?
To help you create your own consulting contract, we’ve once again got your back with a consulting contract template that provides a great starting point.
Passive income document #4: Joint partnership agreement
In the world of passive income, joint partners are an important revenue channel. Not only can you partner with an assortment of affiliates, but we’ve even heard of partnering with competitors to offer solutions to dissatisfied customers, for a cut of the competitor’s proceeds, of course. There are many reasons to enter into a joint partnership agreement, you just need to be paying attention to find the opportunities to do so that work best for your business.
Entering into a joint venture is a trend almost as in vogue as generating passive income, so you will definitely want to keep an eye peeled for opportunities to partner up, advantageously. Once you’ve found a joint venture partner, use our joint partnership agreement template to help you fill in the blanks with ease.