Series 3 Episode 2 – How to Build Passive Income with Lisa Johnson (Part 2)
Welcome back to the podcast. In this episode, we’re going to be continuing our journey with Lisa Johnson. If you haven’t listened to part one of Lisa Johnson’s interview, then please do go back and listen to episode one from last week. In that particular episode we did a really deep dive into Lisa’s personal journey in terms of how she managed through a whole heap of challenges growing up, and how that impacts on how she brings her children up and also how it impacted on her career, which then led her into building a very successful six figure coaching business. So in this episode we’re going to do a deep dive into Lisa’s business, understanding the raw reality of running a coaching business, and some of the challenges that she’s faced. Lisa’s also going to leave you with some of her top tips in terms of how to build passive income in your own business. This is a really great episode and I hope you enjoy it.
Hi Lisa. Thank you so much for joining us again. We’re going to really dive deep into how you’ve completely transformed your life and are now very well known to be the passive income queen. You are a very straight talking coach for entrepreneurs and I’d really like to share some of your wins, some of your tips, and some of the challenges of building an income that’s based around passive income. I’d also like to explore this concept of exactly what passive income is, because I think it’s hugely misunderstood.
Passive income is not trading time for money. So it’s not passive in the sense that you just go to sleep, and money will appear. It’s passive in the sense that you don’t have to be in the room to make it, you don’t have to be anywhere to make money. You can be asleep and you’ll make the money. But passive income is where you have an asset upfront that you’ve created and then you make money from it time and time again. So a really easy example; I always speak about having a spare room. If you have a spare room and you’ve bought the room, you’ve painted the room, you put a bed in the room, you’ve made it look nice, you’ve got the asset, you’ve done the work upfront, and then a lodger can stay in that room and pay you every month and you’re not actually having to do anything else. You don’t need to be there. You don’t need to do any more work. The money just comes in, but you still had to do something at the beginning. And that’s what passive income is.
Most of my income streams are semi passive rather than passive, which means I have to do some work as I go along. Courses are a great example of passive and semi passive income. So let’s say that you have a course; I have a 10 month course that I’ve created, and it’s been done five or six times. So all the powerpoints and the workbooks are written, they’re all there. The work has been done up front. Because I like to teach it live, I go in once a month for one hour and deliver the training. So over 10 months I have to do 10 hours work. So that’s not passive, because I’m doing 10 hours work. It’s semi passive.
However, I will make £200,000 from those 10 hours. So the way to think about it is – if you were doing one to one work, or hourly rate work, you wouldn’t make that much money from 10 hours. That’s where the difference is; going from ‘one to one’ to ‘one to many’, and then becoming semi passive.
I have another course that is completely passive, which basically means someone can just buy it anytime they go off and do it on their own. I don’t do it live but I make the money. So in that sense it’s completely passive. I will wake up in the morning and the money will be there and I’m not having to do anything. However, even with all of that, you still have to market. So it might mean that if you’re growing your list, for example, you have a page at the end of your email sequence where you sell that passive income product. If you’re going to be growing your list anyway, you may as well have some passive income on there and make some money from it while growing your list. So you still, in some way, have to market it. And for me, I love a launch, so that’s how I market most of mine.
How did you first come across the concept of passive income?
Going back a little bit, my journey to being an entrepreneur. I was working in investment banking and was supposed to feel quite lucky about that. I’d got to that point having grown up with not much money, but I was working 80 hour weeks, and then I fell pregnant unexpectedly with twins. And so there was no way that was going to carry on. I mean, I did think it would carry on. I didn’t have any clue about how motherhood changes you. So I went back to work when they were five months old and never saw them, and realised that couldn’t happen.
So instead I got a really easy nine to five job near my house so I could put them to bed and see them in the morning. But I was bored stiff. So I thought, “Oh, I know I’ll start a business!” I’d always thought, it’d be nice to start a business, but I didn’t really know anything about business. So I started a business as a wedding planner and that went badly for a year. I was earning barely anything, doing lots and lots of work and not really earning very much for it. And then I got a business coach; I learned the real foundation stuff that I really should have learned beforehand, changed everything around, and it was a very successful business. So then other people started asking me to teach them what I’d learned.
What foundation lessons did you learn when you were growing the wedding business?
The biggest lesson was; you can’t serve everybody. You have an ideal client; you have somebody that you need to be talking to all the time. Not everybody. And I was trying to talk to everybody. I also had an accidental brand, so I hadn’t branded myself with any kind of messaging with anything that said “This is who I am, this is what I want to help with, this is what I’m good at”. I just hadn’t done any of that. So I was getting budget brides and all sorts of people. Once I got that messaging out, it changed things. I did the money mindset work that we talked about last week at the same time, and it made a big difference on simple things like having a marketing plan and a strategy.
So then I realised that I had a bit of an aptitude for breaking down these kinds of jargon in business into really easy step by step plans. So then people started hiring me to do that, and not just from the wedding industry, from all walks of life. That was when I realised actually that was a business that I could truly love. And I did. It absolutely became my passion. But again, I pivoted a year in, I was doing really well by the first year, and had grown it to multi-six figures, but I never once said “You are so successful because surely if you’re fully booked, you’re successful”. I didn’t feel successful.
I’d given up on nine to five by this point, and was working from six in the morning until midnight. It didn’t seem very successful to me. This life plan I had of traveling and spending time with the kids wasn’t happening. And so I was like, there’s something here that I’m doing wrong. And then I heard a debate on passive income where somebody was talking to somebody else about it saying it was a myth and that passive income doesn’t exist and we need to start talking about it. If anyone ever says anything like that, I’m interested. You know, it probably means that person isn’t doing it but somebody else is doing it really successfully. So I went and I spent about £150,000 on coaching and courses to do with passive income; I wanted to immerse myself in it. Then I started implementing the things I’d learned, giving myself a few passive income streams.
It worked and suddenly 90% of my money was coming from passive and semi passive income streams, and not from doing any one to one work anymore. So I had all this time and all this freedom to travel and nothing was holding me back anymore. So that’s kind of how I got into it. I’ve only been a coach for just over two years, so I’m not somebody that’s been coaching for years and years. Just last year I was on a sunbed in Dubai and somebody wrote to me and said, “You’ve just put a statement on showing that you’ve earned £200,000 in the last 10 to 12 weeks. How have you been doing that? Because I’ve been watching your Instagram and you’ve been on holiday the whole time!” And then I realised that people didn’t know how to do this stuff. I started teaching passive income and then other people started making semi passive and passive income, and the rest is history.
And that’s how you become where you are today! What on earth made you go into a wedding business? I’m really interested.
I thought it’d be glamorous! I like parties and I like to organise parties and it sounded like it’d be a bit like that! So I went into it for the wrong reasons. I did enjoy it, but it was never a passion. I saw a gap in the market when I was getting married, I wanted an urban cool, dark wedding. I didn’t want pastel, I didn’t want to covers, I didn’t want a chocolate fountain. I wanted something really cool and couldn’t find it. So when I became a wedding planner I wanted to fill that gap and do warehouse weddings and urban weddings. And that’s what we did. And that’s eventually why it became successful because once we started putting that message out; we’re not for everybody, we’re just for you – it worked. You know we got rid of 95% in population because they did want a very pretty wedding but 5% of people just wanted an anti-wedding and they came to us. And we only needed the 5% who had big budgets.
Let’s talk about that, because so many people are afraid to niche down. We all hear this. You need to have a niche market because it is so important, right? Because the biggest fear for lots of business owners is that if they niche down they’re going to lose all of these potential clients that are going to pay.
Words like pigeon holing come to mind; people are really worried that if they niche down too much then they won’t get any clients. But the thing is, if you think of it like this; you have a toothache and you walk into a chemist and there are five bottles on the shelf. Four of them say “Gets rid of pain relief fast” and one says “Gets rid of toothache within three minutes” but it’s £10 more than the others. You’re still going to buy it because it’s the exact solution for you. So if there are five business coaches and one is a business coach, particularly for mums who want to work in the creative industry, you’re going to go for that person if that’s who you are. So it’s much better to niche because then you’ll get your people in. I teach a lot of people to have memberships now that are very niche, and some of them are so niche that you would think that can’t possibly be drawing in enough people, but there are millions of people in the world. There’s always people to fill anything that you want to do.
Yeah, I think that that would certainly be one piece of advice I would give to any business owner when starting their businesses, is to just go niche.
Even if it’s the niche that you may not eventually end up with, just get started with it. You can massively change who you’re talking to. Have this one person in your head, give them a name if you need to, but know everything about them. Because I learned that in the wedding business, when I started coaching it grew much quicker and I made money much quicker from it because I knew who I was talking to so I could talk to just that person. When I was looking for a coach the year before, I couldn’t find a coach that didn’t have at least 30% woo woo in their content. They all talked about Law of Attraction and asking the universe and all this kind of stuff, and I knew I didn’t want that. I wanted a hundred percent strategy. I couldn’t find a single person.
In the end I went with a coach that had 10 or 20% woo woo because I had to; there was nobody else out there. So I knew when I started I wanted to only talk to people who didn’t want that and lots of coaches said to me, “I wouldn’t do that if I were you. Because people like that stuff, if you do that you’re cutting off so many people”. But I knew that by doing it, those 5% that really were sick of listening to the woo woo stuff and had probably paid coaches before and not made money, would come to me. And that’s exactly what happened. Once I pivoted and only wanted to teach passive income and starting businesses quickly and growing businesses quickly, we just dropped that, and I gave myself a new message.
Yeah, fabulous. How did you go about choosing a business coach? You said you invested £150,000, so how did you start that journey of actually choosing who was the right coach for you?
I think it’s really hard. I’ve made big mistakes and I’ve not always chosen well. I’ve paid £30,000 to a business coach that I learned not even one single thing from. I’ve learned to do due diligence a lot better now. So how I used to choose was just to look on their website, see if there was somebody that had got to where I wanted to be. If they’ve already been through it, they can teach me the lessons they’ve learned. I also need accountability. I’ll go and watch Netflix all day if I don’t have any accountability, so I needed somebody to do that. And so I looked at websites and online testimonials.
After my experience with a really bad coach, I’m much, much cleverer. I won’t choose solely based on a testimonial, I will want to speak to the person that has worked with them because testimonials aren’t always 100% sincere. So I’ll ask to speak to the people who’ve left testimonials, and I’ve spoken to some and they’ve said don’t work with that coach. I think that happens a lot. We talked about bullying before in the online industry, and I think that very strong coaches can bully people because people are scared of what they can do to their business. They can bully them into giving them testimonials.
So now I don’t go for somebody because of what they’ve earned, or where they are, or how famous they are, because I think that’s all that crap. I go for somebody that behind the scenes has it more sorted. They’ve got systems in place. I want a sustainable long term business and that’s what I want to teach my clients to have. Not a quick flash in the pan, make a few hundred thousand and then you disappear.
Are you happy to share with us your current coaches, your current mentor?
I coach lots of different people now, so what I realised is that I’m much better choosing coaches that have a specialism in the thing I need. So for instance, I needed a sales coach, and I sometimes work with Jessica Lorimer because she’s great at sales stuff. I have a launch coach when I’m launching and that’s Jade Jemma. She’s really, really cool. I have a mastermind that I’m in with Selena Soo in the US; I feel like in the US there’s a different mentality around money, and they’re not so afraid to talk about money. In the UK when we talk about money, I get a lot of flack online about it. In the US when I talk about money, they’re much more comfortable with it. So I feel more comfortable in groups, especially in mastermind groups, with people who are earning six to seven figures because I can be myself over there a lot more.
I also work with a really cool mindset coach called Sharry. She’s brilliant because I need mindset help all the time. I’m a target because I’m a bit marmite online, and that can really mess with your energy so having somebody that I can talk over those things with really helps me. I coach with lots of different people for different things, instead of having one coach that does everything, because I don’t think one coach knows everything and nor should they.
I love the fact that you’ve got different coaches for different things and I often talk to podcast listeners about relationships. I think, for example, we can’t expect our partners to provide support in our life, and business, and kids everything. We need to have networks of people that we can go to to support us in our different relationships.
If you expect everything from one person, you’re very likely to be disappointed. So you know, people will come to me to learn how to launch or to make money quickly. They’ll come to me for passive income. In true honesty, no one’s going to come to me to for mindset coaching; that’s not my bag.
It’s sticking in your lane, sticking to what you’re good at, and what you want to be doing. Sometimes as a business owner, we get these big shiny objects that come up, don’t we? And we’re like, “Oh somebody wants to pay me to do this!”. But actually, is it going to give you the lifestyle that you want?
Once you start turning down clients, that’s when you realise you are a true business owner because you don’t have to take everybody on. As soon as you don’t have that lack mentality anymore, you will make money from the thing that you love doing. Profit follows passion always. So if you start doing things you’re not passionate about you, the money slows down.
I love that. I love that phrase, profit follows passion.
I’ve done things before that I haven’t loved doing. I used to do a lot of one to one work, now I only do one or two people every six months because I like keeping my hand in, I like talking to people, but if I’ve got 10 or 15 one to ones, I don’t enjoy it. I enjoy group work more.
I’ve got a couple of questions that came in from my Facebook community, and there’s a real common thread. One of the questions that came in was how to align passive income with a service based business. I went on to ask what her business was and she said that she’s a social worker, and they’re looking at outsourcing courses. She’s not sure that people would pay for an online course or a membership. And one of the things that really resonated with me was understanding what your client wants before you launch. If you’re looking to invest loads of your time and effort into building an asset, there’s no point in doing all of that unless you know what your audience needs.
Don’t write a word, any course at all or membership until you’ve sold it. This information that you have is in your head; it’s not going to take you long to get it down or to video it. And you can give yourself time by saying that you’re going to drip feed the course every two or three weeks if you need to so that the first time you can write it as you go along. I’ve seen people take six months making these lovely shiny courses and they haven’t asked their audience whether they want it and then it doesn’t sell.
Secondly, there’s a system. So I’ve developed a system called The CASSH System. I realised that I was doing the same thing over and over again to make passive and semi passive income. The way I was teaching my clients was the same all the time. So I developed a system, and trademarked it.
- C is client. First of all, before you even know if you want to do a membership or a group program or workshop or whatever, know who you want to help. Who do you want to serve? It might not be who you think. So lots of people think that it has to be about that business. So a LinkedIn coach thinks they have to do a course about LinkedIn. What about if you also go to the theatre? You might want to do a membership for people that go to the theatre. It doesn’t have to always be your business. It could be something you used to do in a call centre, customer service for instance, that you now want to bring into a course or membership. There’s loads of things you can do. You need to open your mind a little bit about who you want to serve.
- A is about audience. You need to grow and nurture an audience. There are lots of coaches out there right now telling people that they can sell courses and they don’t need an audience. You need an audience.
- S is about systems and structures and knowing where you want to do it, how you want to do it. There’s so many brilliant places where you can host courses and memberships; some are standalone, some are just plugins on your website. I use MemberSpace which is a plugin on my Squarespace website. There are really easy ways to do things, but also know how you want to deliver. Not everybody wants to be on video. Some people might just like to do an email course. Some people might like to do audio or PDFs. There’s a million different ways that you can actually put stuff out there.
- The next S is about selling, which is launching. The biggest problem I see is people having an audience and then going “I’ve made a course, I’m going to sell this course”. A launch strategy is as important as the strategy for your overall business. It should take 6 to 12 weeks to launch something and you should do it properly. Launch planning is one of my favourite things to do. It really doesn’t have to be stressful. It’s all about the preparation beforehand.
- H is about retention; making people happy. It’s about retention because if you have a membership, you want to keep the people in there happy. If you have a course or workshop you want to re-market it and have a waiting list. And I think if you get all of those parts right you will always make passive income. I’ve had many clients do my course Passion For Passive, and the bit that most people give up on is growing the audience.
That’s great, and you’ve really answered the second question which was how to get started.
Yeah, and it’s hard to do. You can grow an audience anywhere; I like Facebook groups. I think they work really well still. I know people are very down on Facebook at the moment, but it’s still a free platform. Some people use Instagram, some people use LinkedIn or just their email list. The first time I grew a Facebook group, I had no money so I couldn’t put lots of money into Facebook ads or anything like that. I had to grow it organically and I did, it just took more time.
So it took me about five months to grow an audience of around 1,200 people and then I sold to them and did a £60,000 pound launch. So it was worth that time of helping out in other people’s Facebook groups, being really visible on your own Facebook group and your own Facebook page. You have to put a lot into it at the beginning. Go and talk in other people’s memberships, go and talk in other people’s Facebook groups. Be available and show up.
And then the second time, I really didn’t want to wait that long to grow an audience and sell, so I put Facebook ads into it. Um, I spent about £6,000 on Facebook ads over three months to build the exact same size audience, and then did a £100,000 launch. So Facebook ads have their place, but at the beginning when you’re just starting to make passive income, you don’t know your conversion rates. You don’t know how many people you have to have in a group to convert. And no one can tell you because everybody’s different. Before you know that I wouldn’t be chucking loads of money into Facebook ads, I’d be doing it organically.
So the question that’s come in from Jenny Braithwaite actually was “What is a realistic timescale for implementing passive income, especially if you have a small audience and a new business?”
If you have zero to small audience I’d give myself a year and I say that because I think it’s really unrealistic to think that you will do what somebody else has done. So I’ve had clients that have taken a year to grow their group to the right place, but now they’re making money constantly every month. And I’ve had some people, for example a great florist I worked with, who after two months of growing her group, she only had 450 people in there. She was like “I’m going to launch”. And I told her no, wait until you’ve got more people because the conversion rate could be quite low and then you won’t have enough people. She told me no, they’re really engaged. I’m going to do it. She did it and she made like £12,000 the first time she did it. So it can work in two months. It just completely depends on how engaged you can get that audience.
Yeah. Fabulous. And that kind of answers quite a few people who’ve asked “How much time do I need?” One of the questions that came in was about what would be the best platform to start on. I know that’s a really super big question because they are quite similar.
If I was starting again, I would ask my audience where they wanted it because it’s not about you, it’s about your audience. So my audience wanted Teachable. They love teaching when it’s nice and easy. And now I’ve migrated a lot over to MemberSpace because it’s easy for them to use and they use it for everything. So I have everything in one place, and if they’re used to using one thing, it’s easy for them to use it for everything else, so they’re more likely to buy more of your courses.
Don’t let the tech stop you. The tech is always the bit that people go, “Oh, I can’t do it because I don’t understand the tech”. There’s so many standalone programs that are really easy and front facing these days, and also you can pay a tech VA £25 an hour and they can do it in a few hours for you and set it all up so there’s no excuse. And especially if you’re going to sell your course or your membership first and then write it, you’ll have the money to get a VA on board to do all these things while you write the content.
The last question I wanted to ask you is; you were recently featured in Forbes. I know you’ve got some huge opportunities off the back of that. Tell us about that experience. How’d you get into Forbes and was that really important for you?
It was, I had a year ago I had a list of realistic goals I wanted to hit and I didn’t hit that one. It’s really hard to get into Forbes. It’s easy to get into Forbes with certain types of articles, but I wanted an article all about my journey, and I wanted it to cover bullying so that I could help lots of people out there that were going through bullying.
It took a while, and it came about in a strange way. I’m in a mastermind with Selena Soo and a lot of other amazing entrepreneurs. One of the people in the mastermind needed some help with passive income. So I was helping her with passive income and then she asked if there was anything she could do to help me. She was a really good story teller and great with getting your story out there. So she helped me with my story, and she found it really interesting. She was really adamant that I should try to get into a publication, which was when I told her that I’d love to get it into Forbes, but didn’t know how to get it in. It turned out she was a writer for Forbes!
Then the amazing thing about it was that it trended. I’ve been really lucky enough to build a brilliant membership of 400 amazing women who help each other out every single day with whatever anyone needs. I told them about it and they were like, we’re going to share this for you. Let’s get it trending, let’s get it on the front page. I spoke to my friend who wrote it and she said, it’s quite hard to do that. How many page views do you think you’ll get? She said you’re going to need 40 to 50,000 views to get Forbes to pick up on it.
Within the first 24 hours we had 120,000 views, and in the first week a quarter of a million views and it trended everywhere. So Forbes put it on their social media, they put it on their front page, they did everything that I could possibly want them to do. And what I love about Forbes is they’re strict. So as soon as they saw it was trending, they got in touch with us and said we need proof of every single thing you said in that article because if it trends, it’s important. I think that’s such a good thing because you can’t fake that stuff then. So yeah, it was such a great experience for me, so many things came out of it, and I do feel like it’s a bit of an achievement.
Wow! A massive well done. I often talk about this in terms of external validation; we shouldn’t seek external validation, but it is nice to have recognition of what you’ve achieved.
The main thing that it did for me is I received over a hundred messages from people who had read it, who have been bullied, and said it really helped them. I feel like if you can do it, I can do it. And that’s exactly what I wanted. Interestingly enough, it really helped a lot of people being bullied, but that one article got me bullied online. Somebody saw it in a group and didn’t like it and said that I’m probably a con artist. Somebody wrote to her and asked if she knew me, which she didn’t. So I reached out to her and said, I’d love to have a conversation with you so that you can get to know me and then you can decide whether that’s who I am or not, but didn’t get a response.
We talked last week about how it’s really a reflection on them as a person, not on you.
Yeah. It’s funny how things trigger different people in different ways, but what I’ve really learned is that you can’t control how people react to the things you do. You can only control how you react to what they do. It’s like a weight lifted when you start thinking like that. You can’t control them and neither should you try.