86 | What is Residual, Passive or Leveraged Income and Does Your Business Provide it?
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[00:00:00] Hey friends. Welcome back to the call to lead podcast. So in today's episode, I am going to be chatting about another one of my favorite things. That I've been meaning to talk more about on this podcast and that is money, honey. Because if you were in business, any kind of business, your goal should be to make an income.
For your family by making an impact on others. And that's the beautiful aspect about network marketing is it is a way that you can and do have to work hard. But you can make a passive residual or leveraged income through the business. So in today's episode, I want to ~kind of ~dive deep into what is this, does your business, as it stands, actually create this type of income for you, or is it more of an active income?
Where you are basically just getting paid for the results and efforts that you're doing yourself. So we're going to dive deep into this today, and I'm also going to be sharing some tools and resources that hopefully can help support you in these specific areas of your business. So buckle up, dive in and let's chat about.
Residual [00:01:00] income.
Okay. So as we dive into this topic, I want to be super clear on a couple of things. [00:02:00] So I am obviously a huge fan of the network marketing direct sales industry, because for me and my skillset, which is all about making new connections, staying in touch with the people that I love and essentially building relationships, this business model has been a beautiful way for me to create a leveraged or passive or residual.
However you want to call it income. Okay. But I know that there are a lot of times where people will make all of these big promises of. You being able to create this type of result with minimal effort. And my friends, I am the first to tell you that is not the case. So the passive and leveraged income that I've been able to create from my business has taken me years. Okay. I've been in our company for six and a half years.
I was in traditional business long before that for over 15 years, which really ~kind of ~helped build up my skillset around his business in general. And this is not my first rodeo in network marketing in general. So all of those reasons ~kind of ~led me [00:03:00] to probably a more, I don't want to say extreme example of what is possible from this business, but whether you're making $50 in passive income a month or $500 or $500,000, which yes, absolutely can and does happen in.
The network marketing and direct sales industry, the principle still applies. And so not going to lie. I was a little bit nervous to touch on the subject because I certainly would never want to make any promises. That's not what this is about. It's really just diving into the definitions and just the numbers and the data of what it looks like to do this and how you can create this kind of income from honestly, whatever business that you choose, whether that's not working on marketing or not.
Okay. So I just wanted to ~kind of ~put that out there. I also, as always we'll drop a link to our company's income disclosure because anytime I'm talking about my numbers or my results or anything like that, I always want to reference. Basically what that looks like for our company in particular. So you can check out the show notes, if you want more,~ uh,~ more information about that. So I'm an artist, nine out [00:04:00] of art.
I've 10 ranks here at St. So hopefully that will help you get a bigger picture and obviously just kind of cover the basis for what it looks like when I'm talking about this kind of stuff. ~So, ~okay. So what's the difference between. ~Uh, ~active income and passive income. And then what's the difference between like passive versus residual versus leveraged income? Well, essentially, and I had to do some digging on this because I wasn't sure myself, so Google tells me that active income is essentially just getting paid on the actual work that you're doing.
So we'll call it trading your time for dollars. So that's where like maybe you would go and get a part-time job or, you know, maybe it is a commission-based job, or if you sell X, Y, Z, you get. XYZ in return, but whether you work for someone else or whether you are more of a contractor where you're making a specific commission, the active income is the income that's tied to you doing the work. Okay. Versus passive income. So the Google.
Says ~that ~that is income generated [00:05:00] from someone other than an employer or a contractor. So that can be basically just you're getting paid in some other way. ~Um, ~rather than just directly for your work. Okay. Versus residual income. It's the money that continues to flow after ~an initial, ~an initial investment of time and resources has been completed.
So that's kind of saying that you put in the time, the money, the investment on the front end. To create residual income on the backend. And then lastly, my favorite definition is leveraged income and that's the idea that the time and the effort you put into your business will give you exponential results in terms of your earnings.
And so that looks ~like, you know, kind of, uh, like,~ like a Seesaw, right? Or like a leverage where ~like, ~You know, a small, like a toddler can sit on the edge of a Seesaw and make the other side go up. Right? Like, so it's like leverage, how can you create leveraged income? And so the idea of. Of why I think this is a great term to use when we're talking about this is it does require time and effort. [00:06:00]
It on the front end that you have to invest in your business in order to get it on the backend. So if you're going to spend your time and money wisely, which we've been talking about a lot here lately on the podcast. I want to make sure that you are spending your time, money, and energy on the things that are going to create those exponential results for you and your business. And aren't going to burn you out and create this exhausted, overwhelmed feeling of just again, like you're trading your time for dollars.
So that is a beautiful aspect of this business is the way most compensation plans and structures are set up is you can create a leveraged income from this business. And it is very exciting. Again, whether that's $50, $50,000, 500,000. Or more. It is possible here, and we're not going to look at like the, the crazy big numbers. You can imagine that. And again, check out your company's,~ um,~ income disclosure, if you want to know what that looks like, but essentially what we're going to talk about is that money that you earn.
By putting in the time and the effort upfront so that you can make that money on the [00:07:00] backend. So it's not magical. You do have to put the work in let's lay the groundwork first. Okay. So the other way I want to kind of talk about this is I want to divided up the opportunity for you to earn passive or leveraged income into three different areas within your business. And these are three areas that I track.
Personally within my business and within my income. And if you're like me that maybe you have your hands in a lot of pots, like I have the podcast, I have my YouTube channel. I have my St personal business. I have my St team business. It can get a little bit overwhelming and this will hopefully help simplify what that looks like.
And it will serve you no matter what kind of business you're in. So the three different areas. And I've talked about these on the podcast before, are the me aspect of your business, meaning your own personal business. The them. Aspect of your business, which is anyone other than you, that's on your team. So specifically the people that you enroll and the people that they enroll. So it's someone other than yourself, right? That's why I call [00:08:00] them sometimes sounds a little like dramatic, but ~it's, ~it's a good way to describe it.
So there's me. There's them. And then there is a third opportunity and that is the we, which is income that you can make that serves you. But it also is made from benefiting and serving your team. And for me, this podcast is an example of that. Okay. And so we'll talk a little bit more and we're going to break down each of these and within each of these different categories, I'm going to share a little bit of tips and wisdom, but I'm going to share a tool specifically that I think could be helpful and valuable.
If you're looking to grow the passive income side. Or the leveraged income, whatever you want to call it side of your business in that area. Okay. So let's focus on the first area of me, which is your personal business and network marketing, meaning that's you selling your product or services to customers and.
Putting yourself out there, you're sharing the value of the product that you love. And there's a million ways to do that. You can do it online. You can do it in person. Again, we've been talking about this for a [00:09:00] year and a half. So if you want to look into all the different ways, definitely subscribe to my podcast or the YouTube channel.
And catch back up. Cause there's lots of good stuff talking about how to grow your personal business and all of those ways, but essentially your within your own personal business, you've got that opportunity for active income, meaning you're just selling something and getting a commission from it. Right.
And so the more you put out there, the more say make-overs, if you're in a makeup company like me or the more parties you do up, you're in a more party plan type a, you know, a company where you're selling nails or. ~Um, ~you know, Maybe you do fitness and you're doing like these fitness group coaching, things like that. So it's basically your income. That's tied to a first time customer. So it's someone buying from you one time.
Okay. So that is what is active income in your business. And a lot of times I see people who really focus only on this me section of their business when they're like, I want to grow my Instagram following so I can sell tens of thousands of [00:10:00] dollars of my product. A lot of times, it's really difficult to create the passive income that can come from really serving and loving your customers. Well, so that, that new business, the active side of it becomes passive or leveraged when they reorder from you. Okay. So your customers, your team, they're all going to have to feel nurtured and loved and supported, and honestly have a connection from you and a trust that's built on something bigger than you just looking pretty on Instagram.
Before, they're going to continue to support you. And sometimes that can be hard to do in mass because what I see happen sometimes, and this is good news for those of you guys who don't have big followings is people want to buy from someone they know like and trust. And not that they don't know, like, and trust the online influencer.
That's just spitting out her link, almost like it's an affiliate, but sometimes they'll see ~that, ~that person, that influencer talk about it. But then they'll hear that their friend from their Bible study or a friend from, ~you know, ~a fellow teacher is share [00:11:00] also sharing that product kind of belly to belly,~ like, you know, ~classic, just spreading it, word of mouth.
And guess who she's going to want to buy from. She's gonna want to buy from the one that she knows likes and trust the most, which that's going to come from. The one she has an existing relationship build. So if you are over there and I'm not saying there's anything wrong with trying to build a social media following in order to build your own personal business, I will say it can be difficult for you to create the connections needed and to devote the time.
Needed to nurture the followup so that your customers can feel well-supported okay. It can also impact your team because if you're doing really well in your business, A lot of times, they don't necessarily have those gifts and skill sets that you have in order to build that following. And so they feel like they're falling short because they're not living up to the results that you've had.
Which can also create more of an,~ uh,~ culture of discouragement versus kind of momentum on your team. So nothing wrong with building your personal businesses is something you should always focus on doing, [00:12:00] but any time you can up the passive or leveraged side of it and focus on how you can get that new customer to fall in love with your product and continue to order from you time and time again.
So I know there are a lot of companies out there that have an auto-ship program or something that naturally sets up a customer. They have the option to set up to where they do order time and time again. And I just read something that says that if I think it was from Rob Sperry and he said that if you can get a customer to order four times in a row, like four months in a row, which again, we don't have auto ships. So in our comp our.
Typical product lasts about two to three months. And so we'll just call it a for customer orders from a year, if you're a Saint artist. Okay. But basically if you can get a customer to order for four to four or more times, they are going to be your customer for life. So then, and guess what though? That reorder business.
That is leveraged income because it's not tied. It's tied to the effort that you did on the front end. Right. That one time you did that make-over and [00:13:00] she reordered from you or, you know, order a referred her sister or her daughter or her cousin or her mother-in-law to you. That's the passive income, the leveraged income that can come.
From creating a raving fan from that one-time customer. Okay. So when we talk about passive or leveraged income in your business, I'm specifically talking about the reorders and the effort that's coming from within your business, whether or not you have auto ship, because even if you're on auto ship, if you're not serving your customers well, and you're not following up with them to make sure they love it, you're not providing them with some troubleshooting, maybe if they're having it.
And honestly, if you're just not helping them feel seen and loved and connected to you, they're not going to order from you. They're. We're going to stop and it's going to be a one-time sale, which has not passive or leveraged income. So, how do you do this? What does this look like? Well, the fortune is in the followup and the connection, which, as I said already, if you have a strong me side of your business, meaning you do strong in sales, sometimes it [00:14:00] can be a bit of a challenge to take the time.
To go deeper with your customers in order for them to continue reordering. So what do you, do you have a leaky bucket essentially, which is like a lot of orders coming in, but not a lot of residual orders ~coming, ~coming back in, if that makes sense. So the water's pouring out, which means you have to keep pouring water back in.
Whereas, if you can focus on the aspects of your business that do create connections, namely in the followup, which good news can be done automatically. And that's one of the things that I really want to talk about in this area is the automations aspect of your business. And I've seen this time and time again.
Where someone who maybe. Was doing well in their business, maybe selling a couple thousand, ~you know, ~maybe,~ um,~ in our company like hitting the highest commission bracket when they invest in setting up automations for the follow-up side of their business. Not only does their business tend to skyrocket because those people are supported and they start to reorder time and time again, and you're staying in contact with them, but it's done through automations.
[00:15:00] But the even better part is it tends to equip you and inspire you ~to, ~to have more confidence, to talk about your product more and to put yourself out there because you know that you can fill the bucket and the bucket is going to get bigger versus filling a bucket with leaky, unhappy customers. And so setting up automations for your business can be a huge aspect to build your business. Now, having said that a lot of times automations can be really expensive in your business and you have to pay someone thousands of dollars to set it up.
And so you might not yet be making thousands of dollars in your business. And as I've been talking about, you definitely want to be making some money before you start spending the money. And I would say 20 to 30% of investing back in your business of what you're making is a good. Measure of how much to spend on something like an automation system. And so I, myself had invested in a, an automations for my personal business that I spent thousands of dollars on you guys. I mean, the actually.
It was probably tens of thousands of dollars. Cause I worked with a company that was trying to work out [00:16:00] the kinks and I was an early adopter with them because I was a higher level leader in our company. And I spent tens of thousands of dollars to set up these really fancy, really complicated. Systems for my business, but guess what happened? I would enroll a new artist who might be selling $500, maybe a thousand dollars, you know, maybe even $2,000. And she'd say, Hey, how do you do all that? ~Like, ~you know, can I, can I set up what you're doing?
And I would never tell an artist who's creating that kind of income to go spend that kind of money on their business. And so I found a system that works for me that costs me less than $50 each month. Versus the once I had paid, the thousands of dollars are going to turn those tens of thousands of dollars over months.
I was paying. At about $200 a month,~ um,~ to have this automation set up again after the thousands of dollars investment. And so I was so excited to find a way to do this for under $50 a month for my business, which got me really excited, because that means that someone who is selling that kind of amount of [00:17:00] money in their business, like 500, a thousand dollars, a couple thousand dollars can absolutely justify those investments.
And so what I did. Is I set the systems up for myself. I tested them out. They are amazing. They have helped me grow my residual or leveraged or passive income side of my business. Significantly, I would say it's doubled over the time that I've been doing it, which is really exciting. So that would be a hundred percent growth in the residual aspect of the me side of my business, just by implementing these automations that are affordable, but here's the best part I have made my systems into a DIY course for you.
I have talked about it a little bit on the podcast and it's called automate to replicate. And essentially it's a really affordable cause I want it to be affordable and. ~You know, ~justifiable for you to be able to basically invest in the course, invest the time in following my step-by-step systems of exactly how I set up text marketing, my email marketing, and I even have a little spreadsheet where you can kind of manually [00:18:00] track things and you can also.
Learn a little bit more about my funnel system for how you can grow your team in there as well. So it's jam packed and it's, I think a really valuable course that has been kind of sneakily open. I shared it with my team at well, actually with the entire company within all of St at our company's annual conference.
When I did a breakout session at our conference. And they have been using it and I've been sharing it with my directs. And y'all, I'm excited to say that it works. The people who are implementing it are so excited and they are seeing that exact same exponential growth in their business. Like I was seeing in some of the top sellers that were implementing these really expensive, fancy automations, but they didn't have to spend a lot of time or money on the front end to do it.
And so it works and I'm so excited to share it with all of you guys. So you can go to Heather K berge.com/automate. And I've got it right now, priced at what I've been told by multiple people is way too low. And so I wanted to let you know, I will be closing [00:19:00] down. That course at the end of July. ~Um, ~I will be shutting the doors for it. I'm going to be reworking a couple of things,~ like,~ especially from the feedback that I can get from you.
And then I will be relaunching it again, this fall at a much higher price point. So if you've been looking for the automations to support your business, to equip you with the confidence, to put yourself out there, this is it. I am, I'm not just saying that because I made it or because I use it, but it's because I now have been able to get that feedback from my customers and my team, and a lot of people from within the company.
So full disclosure, if you are in St. You do get this course entirely for free. And the reason that I have decided to do this is because I am such a big believer, and I know that one of the reasons why I've been able to build the kind of business I have within St is by abundantly sharing the tools and resources that work with my team, with my sideline leaders.
And I'm friends with a lot of leaders in all of the company. And I know that rising tides raise all ships. And so if you are a Saint [00:20:00] artist, just shoot me a message. You can text me directly at 9 1 2 4 0 5 8 9 1 2. And don't worry. I'll make sure to tag you in my texting system, that you are an artist.
So I won't be sending you like ~my, ~my ongoing communications, but you can just text me. You can maybe text the word course. To that number. If you are a Saint artist and I will help you get the code, that where you can get it for free, but if you're not a, say an artist and you still want this, which hopefully you do, and hopefully you can understand my heart for why I would want to give it away to some, but also would want to.
~You know, ~be able to monetize if you will, the time and investment on the front. End of being able to do it, then go ahead and go to Heather. K Burg, B U R G e.com/automate. And you can also check out the link in the show Okay. By now, you are probably wanting a little bit more about how you can focus on the passive income side from your team. And so in next week's episode, I am going to be talking specifically about this. And we're going to be diving [00:21:00] into how you can create leveraged and passive income from your team. And you can also do a little bit of analysis on whether you're actually doing that.
In your business right now. And then after that, the next episode, we'll be talking about additional revenue streams that you might want to add into your business. So that again, would be something that can serve your personal business, something that can serve your team, which is the we side of the business.
So I hope that. Starting the focus on your own personal business today and creating that leverage and passive income and kind of analyzing whether or not you have that in your business right now i hope this has been helpful can't wait to talk more about this in the next few episodes so get excited
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