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



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 my blog, my purpose was to write about creating and selling Udemy courses and 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.

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

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.

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.


  1. Hello Gertrude,

    This is a good post that everyone should read, particularly bloggers who are frustrated that they are not making the type of killing that other big bloggers are making (or claiming to make).

    You made a good point, without an audience, it’s better to start providing services and making money, rather than keep getting frustrated waiting for passive income.

    The 2-3% conversion rate is scary to accept as true, but it’s true. And the math you provided paints the picture even more clearly.

    But don’t you think this makes those people right who insist that it’s just better sticking with a day job than an online business? I mean, if online business doesn’t bring passive income or income without a lot of effort, why bother?

    Your thoughts?

    • Hi Gary, thanks so much for your comment. I currently work full time while I build my business online. I currently make half of my full-time income from my online work. Eventually, I know that I will surpass my full-time income and when that point comes it will be a great place to transition to working fully for myself.

      The trajectory to success online is different for everyone AND there are different ways of making money online – ecommerce, freelancing, selling eBooks and courses via marketplaces like Kindle and Udemy , affiliate income etc.

      My focus for this post was on people who are planning on monetizing their online ventures by selling courses to an e-mail list or who depend on Adsense-like income. I find that a lot of newer folks simply focus on these methods forgetting that it really is a numbers game in these scenarios. A service-based business provides real money in the meantime that you can feed back into building the passive side of things.

      Is it possible to make a full-time passive income online ? Yes ! But it takes time to build up & this was my realistic take on it.

      Last but not least, while it does take A LOT of effort to get a business off the ground – I know. I’ve been there – the satisfaction I get from creating something that is generating me an income outside of my job is AMAZING & truly freeing.
      Gertrude Nonterah recently posted…5 Traits of Highly Effective Content CreatorsMy Profile

  2. Good post. It might be hectic doing a service based business online versus passive income, but it helps bring money in, without waiting for many months or years. I will suggest one does a service based business online while building passive income at the same time. That way, some day down the road, the service based business would have funded the creation of the passive income. Do you agree?

  3. 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!
    Freddy G. Cabrera recently posted…5 Reasons to Start Using Influencer MarketingMy Profile

  4. Hi Gertrude,
    Service based business is okay if one truly have the passion to sustain it – I know this is applicable to all businesses! Nevertheless, your points are quite frank and clear.

    I couldn’t agree with you more especially on the fact that making it today with passive income requires a huge and loyal following.

    One reasons I will add as well is that a service-based business model gives the blogger controlling power to determine how much he/she makes.

    The better value he/she delivers the greater would be the income generated. However, one cannot actually control who clicks on the affiliate links – even the merchants may not be steady with their commissions calculations, and all of these could be discouraging for the passive income advocate.

    For some type of business, it would be a good idea to combine both!
    Sunday William recently posted…What Are You Doing About Productivity-Killing Email Overload?My Profile

  5. Hi Gertrude!

    I realized this years ago when I really need to make more money from my website.

    I jumped in and learned a ton while making enough to prove that it’s definitely better.

    I still love the idea of passive income and I can see that it’s possible but it really depends on what you passive income goal is 😀 haha.
    Dennis Seymour recently posted…The 2 Sides of Guest Posting: I’m on the “It Works” Side, How About You?My Profile

  6. Hello Gertrude,

    I guess a service-based business can provide you with the money you need to sustain your blog/business until you really get going. I guess it just depends on what you really want or like to do. It takes time to build any business that’s for sure. I just think many people come into internet marketing with the wrong mindset. They believe they will make money quickly and when they don’t their hopes get dashed.

    With internet marketing there are so many options to make money. That’s what I really like about it. The possibilities are endless. You are sure to find something that you like and hopefully you can make money with it.

    Thanks for sharing this with us!
    Maketta recently posted…Target Your Market At IBOToolBoxMy Profile

  7. Hey Gertrude,

    This is a great idea to do a service-based businesses as an alternative. The ultimate goal for us is to create passive income, but this can be a challenge. Especially if you don’t have a big enough audience.

    But to stay afloat with your business, you want to analyze what skills you already have and market yourself. This will definitely help build your online resume which will inevitably build a great reputation for you.

    Thanks for sharing Gertrude! Have a great week!
    Sherman Smith recently posted…3 Elements To Focus On To Help You Save TimeMy Profile

  8. Hi Gertrude,
    Indeed, this post has taken me back to reconsider my purpose for running an online business as a selfpreneur.

    Serviced based indeed has better advantages than passive income because it has more flexibility and control.

    Nevertheless, an effective service-based venture can optimally lead to generating of constant passive income.

  9. Hi Gertrude,

    I never tried to offer services on my blog because I fear to face the client’s deadline, but in this post, you clearly mentioned all the important advantages of service based business.

    This time I will try to concentrate on service based business to earn money, thanks for sharing such valuable information, see you soon with another article.
    siddaiah recently posted…MyThemeShop SociallyViral Theme Review: Is It Really Viral?My Profile