How I Turned My Consulting Website into a Passive Income Powerhouse
January 5, 2021
Several years ago, I had a problem. I owned a successful consulting business, but I wanted to move on to other business opportunities. The only way I could’ve done that would’ve been to sell my consulting business for a significant (mid-six-figure) sum.
Unfortunately, I was a solo operator, and selling a consulting business where you are the lone consultant can be extremely difficult. Because you’re the face of the business and the person who has built all the client relationships, potential buyers know it may be hard to keep the revenue steady after you’re gone. Many potential buyers I talked to wanted me to keep working for the business for 2–4 years after they purchased it, and even then, offered far less than I would need to invest in a new business opportunity.
I knew that I would need to take drastic action if I wanted to be able to sell my consulting business for the mid-six-figure sum I was hoping for, without the need to keep working for the new owners.
Turning Active Income into Passive Income
The major problem I knew I had was that my business required me to be working every day. I was trading time for money, and that wasn’t very appealing to potential buyers, particularly when my sales relied on my personal brand and the client relationships I had built.
On the other hand, I had a number of things working in my favor: I had built a website with almost 500 posts that was getting great traffic, I had an email newsletter list with over 20,000 opt-in subscribers, and I had a deep knowledge of my industry that my clients were willing to pay for. The solution, I realized, was turning the “active income” I was generating from consulting into “passive income” that a new owner of my website could continue to generate long after I was gone. I did this by turning my consulting knowledge into ebooks, webinars, and online classes.
Productizing my Knowledge
My first step in creating passive income products was figuring out what my audience was most interested in learning. As a consultant with 15 years of experience in the industry, I knew there were hundreds of different topics I could cover. I wanted to make sure that I focused only on creating info products that would become bestsellers when I offered them to my email newsletter list.
I spent time figuring out what the biggest pain points were for my clients. I thought about the problems they most often paid me to fix for them. I narrowed the list down to 15 possible topics and polled my subscribers. I asked them what format they would most like to learn in (e.g., ebooks, webinars, or multi-module online classes), and I also asked how much they would be willing to pay for information in those formats.
After a week, several hundred of my email subscribers had completed my poll. I used the information I garnered, along with my knowledge of the industry, to rank the 15 topics. I placed the topics that my audience was most interested in at the top, with the topics they were least interested in at the bottom. For each topic, I also determined whether to offer a webinar or an online class, based on how much time would be required to cover the topic thoroughly.
I then set out to create information products based on these topics; my goal was to create evergreen products that I could sell over and over again. I knew that potential buyers would be more interested in buying a business with passive income streams in place than a business where they’d have to create content to sell over and over again, so I aimed to build webinars and online classes that would help them solve these problems today, tomorrow, and five years in the future.
Will People Really Buy? Testing Before Creating
My first info product was an online class that I planned to sell for US $297. The class would consist of 12 modules and 2 bonus items. Creating it would require a significant investment of time and energy, and I was worried that I’d create it and then no one would buy it.
That’s when I decided to test the product before I created it; I offered a pre-sale of the class and then, if enough people actually bought it, I would create the class one module at a time, releasing one module per week for the next 12 weeks. This would make for a hectic couple of months as I tried to keep up with the release schedule, but I decided that it would be worth it because I would be guaranteed not to have to create a class that no one wanted to purchase. I also decided that if only a few people purchased the class, I would refund their money at the end of the launch and not go forward with creating it.
Thankfully, I had taken really good care of my email list over the previous few years, sending them great, non-promotional content on a weekly basis. When I launched my class pre-sale, they were very responsive. And, by the end of the 7-day launch period, I had sold enough of the classes to know that class creation was going to be a very lucrative part of my business going forward.
Investing the Time to Succeed
My first class sale was a huge success, but I quickly realized that having one class that sold well wasn’t enough to make my business attractive to potential buyers. I needed to create multiple streams of income on the site to sell my business for the amount I was hoping for. This wasn’t going to be a “set it and forget it” way to build my business—I was going to need to invest some time over the next few years to build the passive income side of my company.
So, I started working down the list of topics, creating new classes and webinars on a regular basis. Most sold well, but a few were duds. Those that didn’t sell well during the pre-sale period didn’t get made; I simply refunded my customers paid and let them know that there wasn’t enough interest to create the class. Each of the classes was evergreen: once created, they could be sold over and over again with only minimal tweaks.
I learned through testing that I could sell each class twice per year, meaning that I could launch a class for a one-week period and then, six months later, launch the same class for another one-week period.
Over the next three years, I developed 24 different classes and webinars that I sold on my site on a rotating basis. This was a lot of work, but I quickly grew to enjoy the class creation and launch process. As I launched classes and webinars to my list, my income grew. As my content creation workload increased, I cut back on my consulting work. Soon, I was spending 95% of my time growing my passive income business and only 5% of my time on the consulting side. I was earning far more than I was back when I was focused solely on consulting.
Selling My Business with Empire Flippers’ Help
After spending three years turning my consulting website into a passive income powerhouse, I knew my site was ready to sell and that it would be attractive to potential buyers. That’s when I reached out to Empire Flippers: their team analyzed my site and gave me a valuation I was very happy with.
Just two months after listing my site on the Empire Flippers’ Marketplace, my site sold for the mid-six-figure sum I was looking for. The Empire Flippers team guided me every step of the way. I was so happy with them that later that year, I listed another smaller website I owned on the Marketplace and it sold in a matter of weeks.
The income I earned through creating information products was a huge boost to my bottom line and helped me build a business that could be sold for a great multiple. The money I earned selling my site, with the help of Empire Flippers, allowed me to focus on other business opportunities and put me in a great position for future success.
Consultants and Freelancers: You Can Do It Too
If you’re a consultant or freelancer, you too can sell your business for an excellent multiple of your annual income. My suggestion is to start early and put yourself in the best possible position for success.
The number one thing I did early on in my business that allowed me to sell it later was focusing on building an email list. I geared my entire consulting website toward collecting email addresses from my visitors. I initially used this email list to sell consulting services, but when the time came to sell information products, my email list became my primary source of customers.
Preparing my solo consulting website to sell as a passive income business took time, but in the end, the sale price was worth the effort.
