4 Reasons A Service-Based Business Is Better Than Chasing Passive Income

4 Reasons A Service-Based Business Is Better Than Chasing Passive Income

Starting a blog opened up many money-making opportunities for me and my family. Learn how to start a profitable blog the RIGHT WAY.


After 2 phenomenal guest posts this year, this is the first post I am writing this year & I am especially pumped to write today.

When I started this blog, my purpose was to write about creating and selling Udemy courses and Amazon Kindle books.

Both of these are viable business models and no doubt there are those who have had mighty success doing both or one of these.

So, before all you passive income pullers take my words out of context and start your “burn her at the stake” chant, let me clarify my position.

I am not arguing against passive income at all. I love passive income. I make some passive income. Not much. But still passive.

I’m just tired of the seeing folks get frustrated with themselves because nobody is clicking on their affiliate links or buying their course and all we can offer them are platitudes & irrelevant advice.

I am simply presenting another view of “making money online/making money from home” that I think sometimes gets lost when people see income reports of major players in the online world.

This post is my way of saying that while passive income is possible, there are other ways of making meaningful job-free income in the mean time.

Why A Service-Based Business Is Better Than Passive Income (FOR NOW)


1)Without an audience, making money passively can be an uphill battle

There are several reasons why some people clear $20,000 in Bluehost affiliate income and some don’t. In the interest of time, we will not go into all of the varied reasons but a major reason I want to point out is this : unless you have a huge existing audience to sell to making money passively can be a frustrating uphill battle.

Not impossible. But incredibly difficult.

When Teachable held their online summit late last year, I heard a statistic of how many people on an e-mail list typically purchase a course during a launch.

The agreed upon conversion rate is 2-3%.

I have seen that rate over and over again even from some of the most successful online income pullers.

I have tested it myself and found it true.

Consistently, even with the very best copy I can whip up my conversion rates stay around the 3% mark.

And so hypothetically, let’s say we have a $97 info product. Having a list of 100 people means, you will make around $300 before you take out your expenses.

200 = $600

400 = $1200

1000 = $3000 and so on.

It is all about the math.

Fact : Unless you have access to an existing audience usually in the form of an e-mail list (yours or you could do a joint venture someone with a big enough list) you are not going to make much selling that $97 info product.

The money is in the list (or in some cases many lists). ‘Tis true, my friend.

Even with platforms like Udemy, Kindle or Etsy, you still need to have someone to tell that you have created a new course, written a new book or created a new item.

However you twist it, you cannot sell unless you have an audience interested in buying.

This is exactly what drew me to packaging my knowledge and offering a service as a great way to start making job-free income.

Key Lesson Here : Be patient with yourself. If you are a boot-strapper like I was at the beginning of my journey, your audience WILL grow as you stay consistent and persistent. Some people have sped the process up with advertising through Facebook, Youtube and the like. This is wonderful if you can do this but if you can’t just yet build slowly and use income from your services to fund these ways of growing your audience when the time comes.

2) Low startup costs

You need nothing to start a service-based business.

Okay I lie. You might need to have a way to showcase your skills.

If you want to offer writing services, start creating a portfolio of your work – that could be your blog.

If you want to manage social media for businesses, build up your own social media channels to an admirable point.

You’re a web designer ? Find one or two people you can design something for free apart from your own website.

The major thing you need with this kind of business is proof that you can do what you say you can do. No expensive business cards. No need for expensive and slightly useless newspaper ads.

Proof that you can provide the service you say you can offer is the most important thing here and it costs you close to nothing.



3) A great source of income that you can feed back into your business

Your job income not enough to buy those tools you need to advance your blog ? Offer a service !

Like I mentioned in this post, I started actively taking on clients for my Social Media Management and Content Creation business in November of last year. I however have not totally abandoned my dreams of building the passive income side of things.

So I am feeding a percentage of the extra money I now make from my service-based business into this blog. One of the most significant things I have invested in has been Facebook ads and so far it has been totally worth it.



4) It is possible to still make a full time income from a service-based business + live life on your terms

That’s why we’re all in this, isn’t it ?  To be able to make money that is not tied to a particular job and live life on our terms ?

Who said you cannot do that with a service-based biz ?

Unfortunately, a lot of people enter into the blogging world thinking that the only way to make money online is through Adsense. Recently, online courses & e-Books are kind of becoming the new Adsense.

Once again, not knocking these business models but you can still sip orange juice from a fancy cup with an umbrella on the beaches of Fiji and do it because of a service-based business.

Just saying.

BONUS TIP : Starting a blog is a great way to showcase your work when start out a freelancer/service-based provider.

Learn how to start one in the next 3 minutes.

Wrapping It Up

Here’s what I want you to do today.

  1. Take an honest inventory of where you are in terms of building an audience – blog traffic, social media following and finally your e-mail list. Are these numbers large enough to support a meaningful income for your blog passively?
  2. What services can you offer ? Think of skills you have acquired in and outside of your education.
  3. How can you package those skills and offer those as a service ?
  4. Listen to your friends and co-workers, what are some of the things they complain about that you could solve for them with a service ?
  5. Go on Craigslist look at the kinds of problems people are looking for help with : babysitting, social media work, writing, etc.
  6. Create a service and post it to Craigslist. Re-post once a month every month and switch up the wording.
  7. Reach out to people who are looking for someone who can help them with a particular problem and pitch yourself to them – they are already looking and so the likelihood of getting hired especially if you have built some kind of portfolio is actually quite high.


What are your thoughts on this ? Let me hear it in the comments.

  • Elizabeth McCravy

    Awesome ideas! Thanks for the read!

  • I agree with this. The key to having a passive income based business is having a large audience. Sure there are exceptions, but that’s the general rule. Most of us will have to start service based, then build our audience in order to earn passive income in our business.

    • Agreed ! And what you are doing ,Tiffany, with beautifuldawndesigns.com is EXACTLY what I’m talking about. 😀

  • Donna M. Berlanda

    You are totally on point here.

  • Makes sense Gee! Affiliate income is a bit hit and miss, plus I’ve found sales ‘disappearing in the system’ so you don’t always get the commission you earned. Services on the other hand is more concrete. You agree to do a service for a fee and everyone is a winner. It’s my focus for this year!
    – David

    • “Sales disappearing in the system” ??? ! Wow. That’s a new one. I will have to watch for that when I sign up for affiliate programs in the future.

      Thanks for coming over and leaving me a comment David.

      • Gee that already happened to you when I purchased a theme through you’re link. Only way you ever found out about it was because I emailed you and let you know I had done that. Why they didn’t credit you that commission automatically I have no idea. That one was definitely fishy.

        Aside from that affiliate marketing can be highly skeptical at first. You’re against the wall on issues like ad blockers (which yeah do block the tracking cookies in affiliate links) fine print in affiliate terms & conditions (that really feels meant to screw you out of your earnings but in most cases it’s meant to protect them), people researching at work or on their phone but then purchasing the product without your affiliate link later on their computer at home, and many other possibilities.

        So with all of those leaks in process what do you do? Factor that bs into your margins and find out if it is truly worth it. Don’t give up because it not what you may have originally hoped, the numbers still apply here, and if you don’t want it someone else will and they will get it.

        Where you might have thought 1 out of 5 unique clicks would convert into a qualified sale you will find out later it might be 1 out of 50 (or more) will actually produce a qualified commission. Is that 1 out of 50 still worth your time? Yes in some cases it definitely is but in alot of others it’s a big hell no.

        Affiliate marketing has so many leaks in it and the people that always win whether or not you get a commission or not, are the product owners or the service you are pushing leads to.

        You need to aspire to create your own product so you can be sitting on the other side of the table. Do you think that once you’re on that side of the table that you are going to screw people out their commissions that worked hard to send you them red hot leads? (Let’s assume most are good people here and say:) No. Why? Because thank you for bringing me a customer I may have for years and will result in more sales than just that one if I’m doing my job right. If I keep my crap together and serve them the way they deserve. Also thanks for the tax deduction I am more than happy to pay you and write it off.

        The other thing is you also need to vet your affiliate programs as if they are potential business partners… because they are. Look at a program like a person because they are sharing a % of your affiliate marketing business. You can’t outright go and ask them questions if they are going to screw you over (there’s a quote somewhere about being successful and atleast being screwed over once) but what you can do is your due diligence and see if they have ever screwed anyone else over by Googling reviews about them. That will help you filter out the worst and some will just have to be learned the hard way unfortunately.

        But at this point holy crap you are hopefully becoming such a badass at maximizing your conversions, that haha screw them! Your audience and traffic is growing and you got clout! They just lost a fricking champion that their competitor is going to gain and together were going to crush them under our heels like the pathetic little piss ant that they are.


        • It sure did happen to me Carlton ! I just saw your comment in my e-mail. I remember getting in touch with the company and all they could offer me was “He must have clicked another affiliate link before yours” and I am thinking “No he didn’t but whatever”.

          I let it go because it wasn’t worth my time. And honestly I still prefer doing freelance work sometimes although I don’t mind passive income at all 😀

  • It’s so refreshing to hear the truth about building passive income. Most articles and courses on making a living from blogging push schemes promising traffic and sales, without admitting that seeing returns will take more than a few weeks or months, can ruin the most dedicated blogger’s outlook and self-esteem.

    Your article helped restore my perspective.

    With providing services in mind, what suggestions can you offer the aspiring blogger having difficulty pinpointing what he or she might offer as a viable service? I’m currently completing my stress management coaching certification to add services that I can provide, but have seen classes offering certificates of completion at Udemy. Would inexpensive or free certifications help a new blogger get started, or do you feel that these non-university, non-traditional certificates actually hurt a blogger’s reputation?

    Thanks Again!

    -Valerie K.

    • Hi Valerie,

      Thanks for your comment & question. For an aspiring blogger I would say :

      1. A service you can offer can usually be already found in your skill-set. If not, then study up on one, practice, practice, practice and then create some proof that you can do what you say you can do.

      Perfect example : 4 years ago I knew NOTHING about using social media for building authority and growing your business. I happened upon a lady called Sandi Krakowski and learned everything I could learn from her about social media and started building my following for a different blog on Facebook later on Twitter and then Pinterest.

      I learned. Then I created proof. An opportunity to help a local business owner came up after I sent an e-mail in response to her Craigslist ad. She saw my blog + social media following etc and wanted me manage social for her.

      What can you already do ? Go to Craigslist or some other listing site. Are people looking for such a service ? How can you package yours and position it rightly before that audience ?

      If you have no skills, what can you commit to learning in the next 6 months ?

      2. People pay for results not degrees. Of course, I would not want someone who has not been to medical school treating me for a serious illness but in your case I don’t think it matters. If you can show that you can do what you say you can do and have testimonials to that effect, you can sell your stress management service.

      I hope this helps.

  • Agree with all of the comments here regarding passive income. It is definitely a challenge if you are new to the game and do not have a massive audience and following (that’s for sure).

    Thanks for putting things into perspective – aka keeping it 100 with this blog post. 🙂

  • This was so helpful, Gee. This week, I have been working on finishing up my first ebook. Yet, as a new personal stylist, I know I need to include services on my site as well. The advice you gave here about Craigslist was awesome. I think we sometimes forget to take some things OFFline in order for our ONline businesses to grow.

    • You are welcome Sophie. Passive income takes time to build up I have found personally and so offering a service via your website/Craigslist/Upwork etc, is a great way to make those extra $$ online until the passive income die of things grow.

      Thanks for taking the time to leave me a comment today.

  • Hi Gertrude!

    Great post and good point you got here! 😉

    I do agree with you that a Service-Based Business Model can make you money a lot faster than building Passive Income.

    Passive Income takes a lot of time and effort, that is for sure!

    And here are my 2 cents on this topic; unless you REALLY LOVE doing the service you are selling, you will not experience true freedom in life. Because you still need to Trade your time for money, and if you dont truly love what you do, it will suck!

    If you want to go on vacation, for an instance, that is the only thing you are going away for, to go on vacation! … and if you are Trading your time for money – how much money are you earning when you are just chilling and relaxing?

    Unless you have built a company and you have employees doing the work for you – you actually lose money when you go on vacation.

    What I would say is to make some good money with a Service-Based Business Model, fast, and then invest into building True Passive Income.

    In order to truly experience freedom in life, you want to earn while you sleep and Live Life. That is the way the cookie should crumble! lol

    If people are having a hard time making money online and creating passive/residual income – I would highly recommend them to do what you just shared here! 😀

    Selling services is a fast way to make some extra money!

    Anyways, great topic here!

    Keep up the great work!

    Have an awesome week!

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  • I can’t agree enough with these reasons. I have chosen to offer writing services on my website instead of products because I love interacting with different clients every single day (even though sometimes, there are “these” poopy ones).

    Nice article Gee!

    All the Best,
    Jan Limark | Brotherly Creative