Too many smart business owners are leaving thousands of dollars on the table in their pursuit of a profitable online business. And no—it’s not because they’re missing some secret funnel hack or Instagram growth tactic. The real culprit? The constant pursuit of passive income.
More specifically, it’s the habit of starting and stopping those passive income projects far too early. I see this all the time working with six-, multi-six-, and seven-figure entrepreneurs. It’s especially risky when your revenue isn’t high enough yet to sustain it.
Let me be honest: I have a selfish reason for bringing this up. I want you to make more money. Why? Because I want you to hire me and I want to deliver a confident ROI on your investment. Do you know how many $17 e-books you’d need to sell on your blog or Pinterest to justify that? Way too many.
That’s why selling services—or even a high-ticket group program—is such a massive advantage. These aren’t the flashy, low-hanging-fruit strategies you see plastered all over Instagram, but they work.
So today, I want to talk about why so many business owners chase passive income too soon, the costly mistakes it leads to, and why you can actually build a chill, profitable, service-based business without burning out. Nobody else wants to say this—but it matters. Let’s get into it.
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Table of Contents
Alright, you know I don’t bury the lead. Today we’re talking about that shiny little thing everyone’s chasing: passive income.
In my opinion, that obsession is actually costing you thousands, maybe even tens of thousands, of dollars. And yes, I know that sounds dramatic, but after eight years in the online space and over five years working B2B, I see this trap all the time.
I also know why you fall into it. You’ve heard the promises for a profitable online business like:
- “Make money while you sleep.”
- “Sell one course to hundreds instead of coaching one-on-one.”
- “Automate your business and live on the beach.”
- “Crank out a Canva eBook in 15 minutes and sell five a day.”
It sounds dreamy, right? And trust me, I’ve fallen for these pitches more times than I’d like to admit. The promise is compelling, and that’s why so many of us chase it.
I’m Not Anti-Passive Income
Now, to be clear, I’m not anti–passive income when trying to grow a profitable online business. But when I say “passive income” here, I’m really talking about lower-ticket business models that require high volume and a ton of upfront work—things like templates, GPTs, eBooks, and all those digital products being pushed online. The fantasy is that you’ll throw up a ManyChat automation, tell people to comment a word, and suddenly you’re rolling in sales.
And sure, most of you are more level-headed than to believe it’s that easy. But the allure is still there, and it’s powerful.
The reason I want to have this conversation is simple: I made a casual comment on my stories recently about how people jump into passive income too early, and I got a flood of questions. So let’s dig in—because we all know courses, memberships, and digital products take massive upfront work, and most business owners underestimate just how much.
Passive Income Isn’t Passive
And here’s the part people really underestimate when growing a profitable online business: it’s not just creating the product. It’s the launching, the list building, the audience nurturing, the follow-up, and the customer support.
Honestly, I didn’t realize until I started working behind the scenes of more businesses just how intense customer support is for these lower-ticket offers. We’re talking about multiple emails a day even before you’re making “bank” in the industry. Things like:
- “I lost my link.”
- “The link isn’t working.”
- “I can’t find my login.”
- “Can you reset this for me?”
- “My payment failed.”
And here’s a funny aside: I always assumed payment plan issues were automatic. Like, if your card expired or maxed out, the system would just retry in a couple of days. Turns out, with a lot of platforms, it’s actually manual. Meaning the business owner is the one getting notified, chasing down failed payments, and handling all of it behind the scenes.
Consumer Expectations Are HIGH for “Passive Income”
So yeah—if you’ve ever thought, oh, it’s just a $27 product, how much work could it really be? The truth is, it’s a lot. Customers expect quick responses, they have specific questions, and the volume adds up fast. It’s a side of passive income most people never talk about.
I was on Threads the other day, and a post sparked a conversation with a friend: once you’re selling anything over $97, the general public expects access. Not one-on-one coaching, but at the very least responsive, quality customer support. They expect to be able to reach out, ask questions, and get answers.
That’s where things get tricky. There’s this awkward middle stage where you’ve started to make some passive sales, but you don’t yet have the volume to cover the actual costs of running that kind of business. Things like more advanced software, or hiring a VA to handle the inevitable stream of support requests. And yes, people talk about the upfront time investment, but rarely about the upfront money investment. You can bootstrap it, sure—but you’ll hate it.
Passive Income Is Hard to Sustain Before You’re A Profitable Online Business
So what happens? I see this all the time:
- Someone decides to “go all in” on passive.
- They scale back or stop selling services.
- They tell themselves, “Services are hard, nobody has money, I’ll just make a course.”
- They rush to get it out there because they need revenue now.
- It doesn’t sell fast enough.
- They pivot, tweak, rebrand, maybe spend on ads.
- Eventually, it gets shelved, and they go back to offering a higher-ticket service just to bring in cash.
And the cycle repeats. Exhausting, right?
Here’s the thing: I get why we do it. As service providers, we’re constantly told that trading time for money is the worst thing you can do. But in reality—especially in the first zero to five years of business—services are often the smartest path. Even now, with an established business, signature methods, and systems, I know that pushing into passive would take an enormous amount of work. More work than I’m willing to do right now for a volume-based model.
Running A Service-Based Business
And here’s what most people miss: services can be scalable. My revenue is higher than ever with services, partly because I’ve built an agency-style model. When you have help with delivery, you can absolutely scale service-based offers. You can make great money, work reasonable hours, and build something sustainable.
When you’re in the earlier stages, I honestly think it’s smarter to focus on services. Not only is it the fastest, most sustainable way to bring in consistent revenue with a smaller audience, but it also gives you more experience.
For example, I run more of a volume-based business. I’m not the copywriter charging $10K to one client a month—I’ve got a roster of about 40 one-on-one clients at any given time (with a team supporting delivery). Because of that, I get to see trends play out across dozens of businesses at once. If everyone’s experiencing a summer slump, I know it’s industry-wide—not just “two clients are slow.” That perspective only comes with working with a higher volume of people.
The math on passive income doesn’t math
And listen, the math on passive income is not as glamorous as Instagram makes it look. I know because I’ve lived it. I have a $27 eBook for my destination wedding business. It sells 4–5 copies a month, completely passively, without me promoting it. Over two years, that’s about $2,592 in revenue.
Sounds nice until you realize:
- It now needs a full update, which will take me 2–3 days of work (plus extra research since I’m not in weddings anymore).
- If I spent that time on client work, I’d make far more than $2,592.
- At the current sales volume, even bumping to 10–20 sales a month, we’re talking maybe $500—with customer support headaches.
So when people say, “I built it once and now I make money in my sleep,” the reality is…it’s not once. It’s ongoing updates, promotion, customer support, and marketing—whether that’s TikToks, Instagram, SEO, or paying someone to drive traffic.
Is Your Profitable Online Business Ready For Passive Income?
Passive income is a viable model. It just requires way more upfront work, investment, and patience than most people realize. Personally, I know I can make more, with less frustration, selling services.
And I’m not alone. My friend Colie did a whole episode on her podcast, Business First Creatives, about why she shut down her template shop to go all in on done-with-you services. It’s not that she couldn’t make passive work—it’s that services were simply more profitable, more enjoyable, and more sustainable. And I think that’s a decision more entrepreneurs should consider.
Here’s what I want you to take away: yes, with services you’re technically trading time for money—but it’s not the doom-and-gloom story the online space makes it out to be. You can earn a great hourly rate, build flexibility into your life, and create the freedom you’re after with a service-based business.
Starting With A Service-Based Business
And if you’re thinking, “Okay Kara, I get it. Maybe I’m not ready for passive yet, but that’s where I want to go eventually,” that’s perfect. Services give you what you need to get there:
- Cash flow to reinvest.
- Experience and clarity about what works.
- Proof of results to back up your future offers.
- Reputation and audience growth, which will fuel your next chapter.
The truth is, services don’t lock you into endless one-on-one calls forever. You can raise your rates, build systems, offer VIP days, hire a small team, package your service into a product after testing it, or create one-off strategy sessions. There are so many ways to scale a service-based business into something profitable and sustainable.
And when you’ve built that foundation—when you have demand, practice selling, and money in the bank—you’ll be in a much better place to create the course, membership, or product you’ve been dreaming about. Until then, you can actually enjoy your life as a service-based business owner, instead of constantly stopping and starting passive projects that drain your time and energy.
Chasing Passive Income Is Expensive
At the end of the day, chasing passive income too early costs us money and momentum. Building services first gives you stability now and options later.
If this resonates with you, or even if you disagree, I’d love to hear your thoughts. DM me anytime, let’s keep the conversation going. These are nuanced topics, and the more openly we talk about them, the better decisions we can all make.
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