“Active or Passive – Which Business Model is more effective?”

If you have an Internet business then a few of your goals may include increasing revenue, building your list and maximizing your exposure on the Internet.  You may try to achieve these goals through a more traditional business model that is used in brick and mortar businesses.  You are stunting your profits if you continue to work in this manner alone.  Instead you need to learn how to automate your Internet business.

What does it mean to automate an Internet business?  Automating an Internet business involves integrating a traditional “active” business model and a “passive business model.  You need to understand how to harmonize these two business models to optimize the success of your Internet business.

A traditional “active” business model can be broken down into the following steps:

1.      You create a product.

2.      You drive traffic to your website.

3.      You sell your product.

4.      You deliver the product.

5.      You repeat the process.

One major problem with this traditional business model is that you have to actively be a part of the process all the time.  If you skip a step then you will not make any money or your business will fail. 

Another disadvantage to solely using a traditional active business model is that you don’t earn money from a product after the product is not “hot” anymore.  For example, the typical process is that you launch a product and it initially generates money, but then tapers off as the market becomes saturated.  The initial product is then dumped in search of a new product.  Other times you may alter the copy, but it increases sales only temporarily.  This is a time consuming process and not the most effective way to make money.

A “passive” business model can be broken down into the following steps:

1.      You create content.

2.      You publish the content to your website.

3.      You drive traffic to your website.

4.      You monetize money from the content.

5.      You repeat the process.

An example of the passive business model is when you engage in Google AdSense.  Google AdSense is when you place Google advertisements on your website.  You earn money every time a visitor clicks on one of these advertisements.  You are essentially selling real estate on your website to advertisers.  A passive model works well in the Internet business environment, but it does not maximize your profit if it is your sole business method.

The question of which business model is more effective can be answered by saying that a combination of the two business models is the best option.  Integrate active and passive strategies in your Internet business so you can earn money all the time.