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How to Build Resilient Businesses for Passive Retirement Income

Passive Retirement Income

These days, it’s relatively easy to start and manage an online business. That’s why so many retirees are using side businesses that generate passive income as part of their retirement plans.

However, if you want that passive income stream to continue, you’ll need to make sure your businesses are resilient.

How do you do it?

The Power of Businesses for Passive Income

It’s hard to overstate just how powerful a passive income business can be for generating retirement income and generally stabilizing your financial life in retirement. The idea is to create a business entity that’s externally and independently capable of producing income indefinitely into the future – without requiring much of your time on an ongoing basis.

Depending on how strict you want to be with definitions, you may reasonably assert that there’s no such thing as a truly passive income business, as all businesses require periodic maintenance and upkeep. Still, even a “sort of” passive income business can be useful.

These are just some of the reasons why.

Broad Portfolio Diversification

A passive income business is a nice addition to your portfolio and can help you diversify your assets and income sources. You may already own dividend stocks, bonds, real estate, precious metals, and other assets, but adding a passive income generating business to the mix can function as an extra layer of security and a measure that can make your income generation even more consistent. This is especially true if you have multiple types of passive income businesses as part of your overall portfolio.

Functional Versatility

Businesses can do almost anything. You can sell products and services in almost any conceivable industry. Or, you can develop new technologies and sell them. You can buy and manage real estate as part of your business operations. And, you can even use institutional crypto trading to get exposure to the crypto market. In fact, in many cases, it’s beneficial to build a business that can do many different things, as this will allow it to generate more total income and – appealing to the main point of this article – become more resilient.


Running a business is generally stressful and time-consuming. But when you have a business capable of generating passive income, you’ll have a path to total autonomy. This makes passive income businesses especially useful for prospective retirees who plan on retiring in the near future. You can spend some of your older working years working hard to get your business up and running. When it’s time to retire, you can gradually pull out and allow the business to run on its own.

Legacy Impact

Some retirees appreciate passive income businesses because of their longevity. If you can build a business capable of lasting decades, you can include it as part of your estate and leave it to your beneficiaries. You may also enjoy the idea of leaving behind a legacy – and continuing to serve your most loyal customers.

Personal Interest

Of course, some retirees choose to establish passive income businesses out of personal interest. If you’re genuinely interested in or excited about the business itself, it will function as a kind of stimulating hobby well into your retirement. It’s a great way to stay connected, stay intellectually active, and have something interesting to do once you’re done with your primary career.

Choosing the Right Type of Business

Much of your success in this area will depend on your ability to choose the right type of business. There are many different avenues for developing businesses capable of generating passive income, but not all of them are equally resilient.

These are some of your best options, though if you exercise some creativity, you can probably generate many more ideas.

Real Estate Management

Real estate has historically been a safe, lucrative investment asset. Accordingly, you could consider creating an entire business around the acquisition or management of real estate assets.

Premium Content

Premium content is another relatively easy way to make passive income. You can create pieces of content with timeless value, and then sell them across many different outlets indefinitely. Books, lectures, and even films are just a few examples here.

Affiliate Linking

If you can build a website or platform that gets a significant amount of traffic, you can generate passive income with affiliate linking. Essentially, this means offering links to external products and services and earning a small commission for each sale you help to establish.


If you have particularly advanced knowledge or expertise in a given area, you can also build a passive income business that sells a useful course. Once the course curriculum is finalized, it can essentially run on autopilot.


If you have software development and technical expertise, you can create a business around a mobile app. Depending on the type of app you create, you can charge money for it outright or charge people for a recurring subscription or access to premium features. There’s no limit to the types of apps you can create.

The Resilience Factor

It’s not enough for a business to consistently generate passive income, though that is a great start. You also need to consider the resilience level of that business if you’re going to use it for retirement income – and especially if you’re planning on leaving the business to beneficiaries as part of your estate.

Resilience is a measure of how easily and how well a business can survive in the face of threats and risks. Every business, no matter the niche, industry, or competence of its creator, is going to face external challenges. The real question is whether your business is capable of standing up to those challenges.

Decently resilient businesses should be able to tackle small risks and periodic threats with minimal effort and a high rate of survival. But if you’re planning on living another 10, 20, 30 years or more, or if you want your business to significantly persist after you’re gone, you’ll need to spend more time and effort focusing on developing resilience.

Identify Risks and Threats

The first and arguably most important phase of this process is identifying the risks and threats that could jeopardize your business. The nature of your business will dictate what types of risks and threats are most important to consider, but these are some of the most common to identify:

Management/Leadership Issues

For many businesses that fail, the root cause can be traced back to poor management or leadership. Even if it’s functioning mostly passively, you’ll likely be the owner and primary leader of this business for the duration of your lifetime. That said, it’s still important to have good team members and consultants who can handle things in your absence and a reliable candidate to fill your shoes when you’re no longer able to conduct operations on your own.

Economic Downturns

A big economic downturn would hypothetically harm most types of businesses, but small and fragile businesses have the potential to shatter during even a moderate recession. It’s important to bolster your business’s finances so that it can continue running, even during a temporary dry spell.

New Competition

If you have the only course on the market for a given subject, you should have no trouble attracting a steady stream of customers. But what happens when someone offers a course that is better or cheaper than yours? If you want your business to be resilient, you need to have a plan for how to tackle new competition.

Evolving Technologies or Needs

Some businesses become obsolete due to evolving technologies or needs. Kodak, while not a passive income business, was an industry leader until it rigidly adhered to a technology that was quickly becoming obsolete. How can you make sure your business continues even as consumer needs and available technologies progress?


Resilience also demands your attention to possible cyberthreats. If a hacker or social engineer compromises your website, will your entire business collapse? What are the potential damages of a data breach, and how can you prevent one?

There are specific strategies that can help you guard against these risks, but also general strategies that can help you protect against all of them simultaneously. We’ll be exploring some of the most important resilience building strategies in both categories.

Diversify Your Business’s “Portfolio”

First, work on diversifying the portfolio of your business. Just as you need to diversify your investment portfolio to minimize risk, you should diversify your business operations.

Products and Services

For starters, you could offer a broader range of products and services. If changing technologies render one of your products obsolete, or if a new competitor offers a better version of your core product, having a robust selection of other products and services can help you retain most of your income.

Streams of Income

You can also diversify the streams of income that your business is capable of generating. This is very similar to offering different types of products and services, but sometimes, you can generate new streams of income without having to innovate. As a simple example, if you own a real estate management operation that keeps an apartment building running, you could install vending machines and coin-operated laundry machines to generate income on the side.

Target Markets/Customers

You may also be interested in diversifying the target markets and customers that you serve. This way, if one of your audience segments chooses an alternative competitor, or if one of those segments no longer has the financial means to pay for your products and services, your business can continue operating relatively seamlessly.

Keep in mind that most of these strategies can simultaneously improve the resilience of your business and increase the total amount of income you generate. This makes them ideal for a wide range of business-building retirees.

Additionally, if you can’t find a way to diversify these items within your main business, you may find it beneficial to diversify your business portfolio by creating multiple smaller businesses. Having three small, passive income businesses that sell different things is similar in risk to having a single passive income business that sells three different things.

Improve Visibility and Tracking

It’s a good idea to improve visibility and tracking within your organization. This is going to make it much easier to identify changing trends or worrying patterns, long before they become significant problems. Of course, the big downside here is that increased visibility and tracking is going to demand more of your time and energy, assuming you don’t already have personnel in place to handle this. Still, it’s worthwhile to put on your data analyst cap and measure everything you can to gauge the health of your business periodically.

Create Backups and Cybersecurity Strategies

Cyberthreats are rare, but they can be devastating, so it’s important to create backups and invest in cybersecurity. You should be aware of the biggest cyberthreats your business could face, and you should have strategies implemented to guard against them. Even simple upgrades, like using better passwords and installing a VPN, can benefit you. Also, you should make sure there are multiple backups of all your most important information, so if your primary sources are ever compromised, you can continue operations anyway.

Instate Good Leaders (and Plan Ahead)

Good leaders can foresee, prepare for, and overcome almost any conceivable risk or threat. That’s why it’s so important to have a good leader, as well as backup leaders, in place. Who do you trust to run things while you enjoy your retirement? Who is going to take over this business when you’re gone?

Create Contingency Plans

Finally, consider creating specific contingency plans for disaster scenarios and probable threats. For example, how would your business adapt if there was a sudden, unexpected 50 percent drop in the number of visitors to your website? In what ways can you get the edge over a new rival or competitor? If your cash flow begins to dry up, what strategies can you employ?

You don’t need to be able to predict the future. You just need to be able to speculate about the best ways to handle various threats. The more specific you are in your conceptual planning, the better.

With these strategies, you should be able to build more passive income businesses to fund your retirement – and you can make those businesses resilient. Establishing true resilience demands research, energy, and even a bit of creativity, but these upfront efforts will pay off if it means withstanding even a major single threat in your lifetime. And if you plan on leaving these business interests to your beneficiaries, they’ll thank you for creating something truly reliable and sustainable.

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Managing Editor
Deanna Ritchie is a managing editor at Due. She has a degree in English Literature. She has written 2000+ articles on getting out of debt and mastering your finances. She has edited over 60,000 articles in her life. She has a passion for helping writers inspire others through their words. Deanna has also been an editor at Entrepreneur Magazine and ReadWrite.

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