A business that generates passive income seems too good to be true. But these types of businesses are out there.
You just need to know where to look. In this article, I am going to share 12 examples of businesses that can be run passively (or at least semi-passively).
The great thing about these sorts of “self-running: businesses is that they can still generate outsized returns. Sure, your high yield savings accounts can generate some passive income (as can dividend yielding stocks, bonds, and the like).
But as a general matter they can’t generate the type of cash flow that a profitable and well-run business can offer.
So now that we know why you should consider “passive” businesses, let’s get into some of the best examples of these types of enterprises.
Note: If you prefer to see a condensed version of this article in video format, check out my YouTube video below.
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The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
If you are looking a solid, dependable, recession-proof business with a super-high success rate, laundromats can be the perfect option for you.
Now, they are not going to be 100% autonomous, but they can be set up to be mostly passive. After all, the machines do the labor intensive stuff for you, like washing and drying the clothes (with your customers performing the legwork of loading and unloading the clothes).
Now if you want to make this even more passive, you can hire people to take care of the stuff that the machines and your customers won’t (like opening and closing the store, cleaning up, taking care of repairs, collections, etc.)
Want more details on how to do this? Check out my article on how to start a passive laundromat in six easy steps.
2. In-Bay Automatic Car Wash
You’ve probably all seen these before. When it comes to car washes, in-bay automatic car washes are as automated as they come.
These car washes are frequently found at 24-hour gas stations, convenience stores, etc., and are typically unsupervised. You also see them in rows on a lot dedicated to car washing (again often unmanned).
The machines handle the rest after people purchase their tickets and park their cars in the bay.
If you want to learn more, check out my beginner’s guide on how to get started with a passive automatic car wash.
3. Vending Machine Route
A great option to make passive income is to run a vending machine route. The aim is to set up a lot of vending machines in busy areas and earn money each time someone uses one of your machines.
The only significant activity involved in this is replenishing the machines’ inventory and taking money from them. This might not be a major concern if you possess a small number of machines, but if you have several, you may want to consider outsourcing this task (to make it all more passive).
Also, you may want to equip your machines with technology that can help you run your company more automatically, such modern payment readers (the less cash you have to deal with, the better) and inventory tracking software that alerts you when you are running low on a certain item.
Additionally, the program records every cent that enters the device, allowing you to hire route runners without as much concern that they will be pocketing money from you.
For more details on this business, check out my beginner’s guide on how to start a vending machine route for passive income.
4. ATM Machine Route
Similar to vending machines, this passive income business involves setting up ATMs in busy locations and earning money each time a withdrawal is made.
But it’s even easier to run than a route for a vending machine. You don’t have to worry about stocking your machines with 14 different kinds of snacks and beverages.
You only operate with a single inventory item – cash. And even stocking your machines with cash can be outsourced.
Curious to learn more? Check out my beginner’s guide to ATMs for Passive Income.
5. FedEx Route Business
Did you know that you may purchase a FedEx delivery route covering a certain area?
The business model is simple – you will profit from each delivery made within that region. It; somewhat pricey to buy one, but if managed properly, it can generate a ton of semi-passive income.
You do not have to worry about marketing, customer acquisition, or competition because FedEx is your partner and they take care of all that. The only thing you need concentrate on is making the deliveries within your region on time.
And that delivery obligation is performed by drivers that you hire. As you can imagine, the majority of FedEx route owners own several of them – they aren’t doing the driving themselves.
Now, depending on how big of an operation you have, you will want manager to supervise the drivers and make sure things are running smoothly.
If you want to learn more about this business, check out my beginner’s guide to owning FedEx routes for passive income.
6. Bread Route Business
You can purchase a bread route that covers a region, similar to a FedEx route. Once you control that area, you can sell bread to stores in that territory and earn a percentage on each transaction.
This means selling well-known bread brands to large shops like Walmart and Target, including Wonder, Nature’s Own, Pepperidge Farm, and Sara Lee.
The best part is that many of these distributorship contracts are exclusive; as a result, if the local store wants to stock your brand of bread, they have to purchase from you.
Most bread routes are dependable, well-established companies that can produce consistent money right away. There is a healthy demand for these kinds of routes, and the business model has been around for a while.
The best part is that you can run this business passively if you choose the correct drivers to handle your routes.
To discover more about this business, read my article on buying bread routes for passive income.
7. Billboard Business
Billboards are a passive source of income, just like any other asset that you may rent out. If you have a nice collection of billboards, you can make a nice profit, especially if you own them in busy areas and have spent a bit of money for contemporary digital billboards.
Of course, the billboard industry is not entirely passive, just like all of these other enterprises. After the existing customer’s contract ends, you will need to find new clients who want to rent billboard space from you. You will also need to manage other aspects of the business.
Want to learn more about this business? Check out my article on how to get started in the billboard business.
8. Bounce House Business
You have probably seen bounce houses before and can appreciate why parent are drawn to this option when looking for something unique and fun to do for their child’s birthday or another special event.
The best part of this business is that you can run it on the side and schedule appointments around your other commitments.
Furthermore, since these are merely plastic structures that you transport, erect, and inflate, it is simple to turn this business into a passive one. All you need to do is deflate the structure and pack it away after the rental period is finished, so it simple to hire and train someone to do this for you.
For more information on how to start a bounce house business, read my article on the topic here.
Blogs may be my favorite passive income business.
Blogs can generate high revenues relating to their price and can be run almost entirely passively. You can buy an existing blog for 25 to 40 times its monthly revenue on sites like Flippa, Empire Flippers, and FE International.
Among the three, I really like Empire Flippers because they strike the perfect blend of high quality vetting (so you don’t see a bunch of scammy websites being sold) while still having a ton of profitable options to choose from.
They get a new batch of websites for sale each week (on Monday morning), so you can predictably see what’s new and jump on any great deals that are unveiled. I am an active user and love their service.
And unlike other businesses, blogs can generate passive income without you having to do much of anything. There is no physical location, no inventory, no marketing needed (google sends traffic your way if you write good posts), no customer complaints to address, no employees to supervise, and no orders to fulfill.
Blogs are generally monetized through ads or affiliate links placed on the website. That’s just a fancy way of saying you can get paid every time someone visits the blog and views or clicks on an ad or buys a product you are promoting through one of your affiliate links.
It’s really that simple.
To read more about buying blogs for passive income, check out my detailed article on the topic here.
If you don’t have the funds to buy a blog right now and don’t mind putting in the work to start one, check out my article on How to Start a Blog From Scratch.
I cover all of the key areas you need to know, including how to set up your website and most importantly, my best tips for writing great articles, getting traffic to your blog, and monetizing that traffic.
Now buying a money making blog can be expensive (especially if you want one that makes real money), so if you want a nice middle option, you can hire a service to create a website for you. Make Lemonade is a UK based firm that specializes in this.
I have used their content writing service to help me expand my blogs when I was running short on time, but they do offer a full service model, where they will create your website for you from start to finish and include content that has gone through their rigorous keyword research process.
Check them out here if you want to learn more.
10. Rental Property Business
Rental homes can be a great source of passive income. I manage my eight rental houses primarily in a passive manner.
They have delivered really dependable revenue streams. The secret is to buy nice homes in areas that people want to live in. That will attract high quality tenants who will pay their rent on time and generally take care of your place.
But even then, you will need to make occasional repairs and fill vacancies. That’s where a property manager comes in. You can pay them a portion of your rent (typically between 8-10%) and they will take care of all of that for you.
On a final note, buying rentals is not as expensive as you may think. You can get financing for rental properties (in most cases, you only need 15% down with low interest rates). Not only does that help with affordability, it also enhances your returns because you are putting less money down to secure the asset.
If you want to learn more about rental property investing, check out my step-by-step guide to start investing in rental properties.
11. Self-Storage Facilities
Ok, while on the topic of real estate, are you interested in running a successful and passive real estate business that spares you from dealing with issues like disgruntled tenants, broken toilets, and other inconveniences associated with running rental properties?
The unmanned self-storage facility can be ideal for you. As its name suggests, you don’t need to be on premises, so it can definitely operate as a passive income business.
With this kind of business, you may benefit from both high returns and cheap maintenance, all while being secure in the knowledge that your company has a 92% success rate!
If you want to learn more, check out my guide to starting a passive self-storage business in 7 easy steps.
I think franchising can be a perfectly fine passive income business, depending on the type of franchise. One solid advantage that franchises have is that they often have great processes and procedures for operating their business.
Again, I look to fast food as a prime example. Many fast food franchise owners do not run their restaurants. They have highly trained managers that follow the detailed operations manuals to a tee. It works and that’s how they make their businesses run so smoothly.
If you want to learn more about the best franchises for passive income, check out my article on the topic (including 7 concrete examples you can explore)
So there you have it: 12 examples of businesses that are natural fits for being operated passively.
Now I want to emphasize that almost no business can be operated completely passively and there are risks involved in owning any business, so you need to bear those things in mind before you commit to starting or buying a business.
If you want more great passive income ideas, check out my ultimate beginner’s guide to passive income [25+ strategies that work], where I cover tons of effective strategies that generate passive income.