Active vs Passive Side Hustle – Which One Should You Start

One things certain about start a side business:

Their are a lot of them to choose from.

So many in fact that it can be overwhelming to choose one.  However in this article I want to make that process a little easier for.

Instead just giving you a list of various side hustle ideas to choose form start with this simple question first.

Do you want to start an active or a passive side hustle?

If you’re not sure what the difference is read on.

 

Definition: Active vs Passive Side Hustle

Before I go into the pro’s and con’s of running an active or passive side business I thought I’d take a moment and define it for you first.

Active Side Hustle – Is a side business that requires you to complete a specific task before you can get paid.

Typical active side businesses would include freelancing, consulting, coaching, or even doing a done for you solution such as building a website for a client.

Basically this means any side hustle that requires you to complete the job before you get paid.

A passive side hustle is completely different.

Passive Side Hustle – Is a side business that earns you an income from an asset that you created once and pays you over and over.

Typical passive side businesses would include creating and selling a digital course, an ebook, a membership program, a SAAS solution, or even one of my favorites Google Adsense.

Basically this means any side business where you created something once and you continue to get paid for on a regular basis.

So which one is right for you?

 

The Pro’s and Con’s of an Active Side Hustle

So if you’re looking to start an active side business here are a few pro’s and con’s to help you decide.

Pro: Easier to Get Started With

To start one of the big benefits to going the active route is that it’s much easier to get started with versus the passive route.

For example, you typically don’t need to create a website, write blog post, create a product, and setup a sales page.

With an active side business all you need to do is have a computer and access to people mainly via social media.

Now I don’t want to give you the wrong impression that you don’t need a website because they can certainly help but you don’t need to them to get started.

 

Con: Limited to the Time You Have

On the downside an active side hustle is based all around the amount of time that you have.  So if you only have 3 hours a month to help clients then this may not be the option for you.

This is the big reason I don’t do nearly as much active work because I don’t have the hours to dedicate on freelance work, coaching, or consulting.

More than that, this was not my goal when I first got started in this.  The reason I do this is so I can spend more time with my family and to do the things I would normally not be able to do.

If I were to spend all my time doing coaching calls, or freelance work I’d be defeating the purpose for the reason I’m doing this.

 

Pro: Can Earn You Money Faster

Now on the upside of things an active side business lets you earn income much faster.  On the active side all you need to do is find a client, do the job, and get paid.

On the passive side you need to set up a website, build an audience, create a product, run them through a sales funnel, and sell them a product.

Do see why it takes so much longer?

With an active side hustle you can be making money within a few months.  With a passive side hustle it could take you a couple of years.

 

Con: Can Be Hard to Find Your First Clients

Now as easy as it might be to get started it’s still going to be tough finding that first client to work with, especially if you have no experience in what you’re doing.

I know when I was doing network market back the early 2000’s it was tough finding clients that would even sit down and talk to me.

Like anything though it’s going to be tough starting out but if you stick with it you will eventually find someone who wants to work with you.

 

Pro: Can Earn More Per Job

One of the final big benefits with an active side hustle is that you can earn more per job depending on what you’re selling.

One rule I’ve learned about coaching and  consulting is that the more access you give to someone the more you charge.  For example if I create a course about helping someone get more clients I could potentially charge $500.

However if I give that person one on one access to me to teach them personally then I could charge them upwards of $5000 all because I’m giving them more access to me.

 

Con: You Need a Network of People to Send You Business

The final con to an active side business is that if you want to be successful you’re going to need to build up a network of people who you can refer new business to you.

In fact when it comes to running an active side hustle, word of mouth is your best asset to bringing in more clients.

In my case I’ve built a few small relationships with companies that have refereed me work for years now.

 

The Pro’s and Con’s of a Passive Side Hustle

If you’re looking to start a passive side business then here are a few pro’s and con’s to help you decide.

Pro: Earns You an Income Without Always Having to Physically Do Something

My top number one benefit to running a passive side business is that it can earn you income while you sleep, while your at work, or even if your on a family vacation.

It can earn you an income and you don’t have to be there to earn it.  I like to think of it as creating assets that work for you.

For example if I create a digital course and when it goes live I can sell it 24/7 all day long.  I don’t have to physically be there to do anything.

 

Con: Can Take a Long Time Get Up and Running

On the down side though it can take a lot more time to get things up and running as I shared earlier in the article.

To get something like a digital course created, marketed, and selling takes a lot more work than if you were to do social media management for someone.

However things are getting easier, with sites like Teachable, Udemy, and Amazon Kindle, creating digital products has never been easier but it still takes work.

 

Pro: Allows You to Have Multiple Streams of Income that Work For You

Another benefit is that you can do more than just one thing.  Once you get one stream of income working for you, you can move on to the next one and get that working for you.

On the flip side with an active side business you might only be able to handle one or two services and that’s it.

Personally, I only deal with one active side hustle and that already takes up enough of my time.  So if you’re looking to make a better use of of your time then a passive side hustle works the best.

 

Con:  No Guarantees It Will Work

Another point that I need to make clear is that a passive side hustle is never guaranteed to work.  For example, if you create a digital course their is a possibility things may not work out.

I learned this lesson all to well in 2011.  My first website was earning a great passive income from Google Adsense, and then Google decided to change the game and literally overnight I lost nearly half of my income due to algorithm changes.

The point is just because you create a product doesn’t mean it will sell.

 

Pro: Give You a More Flexible Schedule

Another upside is that a passive business gives you a much more flexible schedule.  For example, in the month of August I didn’t publish even one blog post here on Side Hustle Academy.

However my income still kept coming in.

This happened because my websites runs all day every day and that’s what I love so much about this style of business.

If life gets in the way I can take a step back for a little bit to get things back in order.

 

Con: Can Be Lonely

The final con is that a passive business can be pretty lonely at times.  A lot of nights it’s just me and my laptop sitting in the basement cranking out content or working on a new product.

Now their are ways to get around this issue.  I have a brother who dabbles with online marketing on the side so we have some great conversations from time to time but the best way to get around this is to join a mastermind.

Masterminds provide you the ability to chat with others who are doing the same thing as you and get feedback on how you could even improve things and make them better.

 

Which Type of Side Hustle is Right For You?

So which kind of side hustle do you like best active or passive?  If you couldn’t tell by the article I’m a huge fan of running a passive side business for 3 major reasons…

• First, I don’t always have the time keep up with an active one

• Second, I also would rather create something once and let it pay me over and over

• And finally, it gives me the flexibility with my time when I get busy with other things

Take a moment and share which type of side business you prefer to have, a passive one or an active one, in the comments below.

Cheers!