I have been working as a full time creative for the last 4 years...however, it has only been in the last 18 months where my income has better reflected that full time status. While of course, as I have built up my business, my fees for projects have gone up and I have been able to take on fewer but better paid design projects. However, like any freelancer, big projects tend to be quite hit and miss and even "high paying" projects are pretty low in comparison to other creative fields. Some months I will have a big project on the go and other months will be dead. This is where passive income really comes into its own.
What is Passive Income?
Passive income is an income received on a regular basis, with little effort required to maintain it.
Sales from apps, stock images, ebooks, patterns, rent, membership schemes, royalties and affiliate links are all common forms of passive income. The work of the product is done on the front end and then your involvement is limited after that.
I am really lucky to work in a field where there is a ready-made platform for selling my work and generating passive income in the form of Ravelry. However, platforms like Etsy, Craftsy, and your own website can also be great sources for passive income. Crochet does tend to be the lower paid cousin of knitting, so I certainly won't be able to retire on my pattern sales, but its still an important part of my business model.
During slow months, passive income is what keeps us in groceries and ensures the basic bills are paid. It also enables me to work on other projects that don't pay at all or as well. Every single £ that comes in is valuable.
Working Smarter, Not Harder
For me, the biggest lesson has been ensuring I can get as much value out of work as possible. Designs for magazines aren't usually well paid. However, they have the added benefit of being being open for independent release when the rights revert back after 4-6 months. While I am selective about designing for magazines, I make sure that the designs I do submit will work well as independent releases.
For example, I would have been paid under £200 for my pleated cardigan design. This is pretty standard in UK magazines for garments, with some paying more, some less. Once the rights reverted back to me, the cardigan was released independently. At the time, the magazine was allowing designers to use pattern photos in indie releases (this isn't common, usually you have to reshoot the photos), making it a very easy release.
The pattern then needed to be put into my own design template, re-edited and then published on Ravelry, Etsy and Love Knitting. In the time it has been available for individual purchase, it has sold an additional 200 copies at £4.00/ copy, making the design much more valuable to my business with limited effort after laying it out in my own pattern template.
Not all of my pattern sales have been that successful. I have many designs that have only sold a handful of copies (and 1 that hasn't sold any at all!), but independent releases have an added benefit of selling other patterns by boosting traffic to my website, Ravelry or Etsy store. And you know what, even if they sell 1 copy, that is £3 I didn't have before.
I also want to add that this is really (and maybe especially) applicable for maker designers. Making, especially knitting or crocheting, items for sale is A LOT of work. If you have developed designs yourself, don't be shy about releasing the patterns or kits for them. In my experience, the markets for patterns and ready made items have very little over lap. Customers who can't make want finished items. And customers who can, most likely will want to make it themselves. Getting patterns written up can be a great way to generate extra income with minimal effort.
Think Outside the Box
Its easy as a designer to think only about pattern sales, but don't limit yourself. Think about the other things you are doing that can contribute passively to your business. For example, tutorials can make a great products. I wrote a series on the blog called How to Design a Hat, which is still available for free. Without a doubt, it is the most viewed section of my website with over 2m page views since the series launched.
About 6 months after publishing, I packaged up the blog posts, added a few tips for making a specific hat (a requirement of Ravelry's) and launched it for sale. It sells hundreds of copies every year, even though the content itself it is still available for free. At its higher price point as well, even in slow months, its been a great assest to my business.
Other designers offer Clubs or Membership services where participants get a new design each month for a small monthly subscription fee. This is a great way to even out income over a year (as long as you can keep up with it).
Or maybe you have other skills. Setting up ecourses for areas of expertise you have in the field, such as tech editing, photography, layout, or charting can be great ways to build up income. Sidebar advertising is another way to get a small amount of income every month and services like Passionfruit Ads can make this a very easy income stream. Don't forget affiliate links are also a way to earn money (even a small amount) from links on your website and I know a number of the yarn retailers.
Its Still Work Though
One thing I want to say is that while passive income is a great way to add value to your business, its important to remember that it still takes work to get there. Setting up courses and the like is a lot of work and often there is a financial investment. However, once the work is done, it takes very little additional time to keep it going.
I'd love to hear if you use passive income to support your business. What works for you? Any challenges I've missed?
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