18/04/2024

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7 side income businesses that practically run themselves

7 side income businesses that practically run themselves

For many, becoming a business owner is a key component of the American Dream. It means flexibility in how you spend your day, control over business decisions, and hopefully, a path to long-term wealth and financial independence.

But you don’t have to start a business from the ground up—or say goodbye to work-life balance—in order to be a successful entrepreneur. Whether you’re looking to earn some extra side income or quit your 9-to-5 for good, buying an existing business that essentially runs itself could be the answer. 

“One of the biggest pros of owning a passive income business is the possibility of growth and the creation of franchise value,” says Ben Johnston, chief operating officer at Kapitus, a small business financing firm based in New York. “Should a business grow and prove sustainable for the long-term, the owner may be able to sell it for multiples of what it produces in annual income.” Additionally, Johnston says, if you do decide to become more active in the daily management of the business down the line, you could replace some of the overhead cost of other management and earn greater returns in exchange for your time.

7 side hustles that require little day-to-day involvement

The key to starting a successful, self-sustaining business is creating a solid foundation. That means investing the necessary time and resources upfront, which could mean buying high-quality equipment, securing customers, and if necessary, hiring support staff. 

While the income from owning a business is rarely 100% passive, there are certain businesses that practically run on autopilot once you build that foundation. So if you’ve saved up a solid initial investment (or qualify for financing) and are looking for a source of ongoing income, consider these low-maintenance business ideas.

1. Take over a laundromat

One of the biggest draws of owning a laundromat is that these businesses are considered recession-proof, since they provide an essential service. According to analysis by the Coin Laundry Association, coin-operated laundromats typically range in market value from $50,000 to more than $1 million. Additionally, they can generate between $15,000 and $300,000 in cash flow per year.

The startup costs for a laundromat can be quite high, however, which is why many people opt to purchase an existing business. You can find laundromats for sale on business listing sites or through brokers. Laundry equipment distributors may also have insider information on local businesses and can connect you with owners who are considering selling. When it comes to investing in an existing laundromat, a general rule of thumb is that it’s worth four to six times the annual net revenue.  

2. Buy an automatic car wash

With the right preparation, another business that can essentially run itself is a self-serve or automatic car wash. These businesses are relatively easy to manage, as customers perform the labor using existing equipment. There are few, if any, employees required, as well as minimal inventory and maintenance. 

For those reasons, owning a car wash can also provide excellent return on investment. A 2022 survey conducted by Auto Laundry News, a car wash industry publication, found that the average monthly income for a self-service car wash was $1,975 per bay.

Again, the success of your business will depend on many factors. Oasis Car Wash Systems notes that a couple of the biggest considerations when choosing a car wash business include traffic and accessibility. You should aim for a site that sees at least 1,000 to 3,000 cars per day, and is highly accessible and visible from the street (think: corner lot, multiple driveways, and separate entrances and exits). 

The cost of buying a self-serve or automatic car wash ranges quite a bit. It’s possible to purchase an existing business for under $100,000, while locations in high cost of living areas can run into the millions.

3. Set up a vending machine route

If you’re looking for a passive income business with a lower barrier to entry, consider investing in vending machines. The costs involved in starting a vending machine route are essentially just buying the machines and stocking them with inventory. From there, all you have to worry about is occasional maintenance, as well as restocking and collecting money from the transactions. 

This is another business that relies heavily on location for success. You’ll want to work with businesses to place your machines in high-traffic areas such as office buildings, malls, hospitals, schools, etc. And the more vending machines you own, the more your profit margins stand to improve, since you’ll be able to qualify for wholesale discounts on inventory and the route will become more efficient in general. 

It’s possible to purchase vending machines used for less than $1,000. New ones will run $3,000 or more, especially for modern machines with features such as card readers or touch pads. However, with the right products and placement, you should be able to recoup that cost fairly quickly. eVending states that their machines can be paid for by selling seven to 10 products per day at an average profit of $.50 per product. 

4. Place ATMs in strategic locations

Similar to a vending machine business, you can also earn income by setting up a route of ATMs. When patrons pull out cash, they pay a surcharge to use the machine, and you get a cut of that fee. One ATM location that gets 80–100 transactions per month produces about a 40%–70% annual return on investment.

You’ll want to find locations that get a lot of foot traffic, especially from people who may need cash on hand. That can include grocery stores, casinos, gas stations, bars, restaurants, and clubs. It’s also a good idea to choose locations that are well-lit, highly populated, and monitored so people feel safe using your ATMs. 

ATM Brokerage notes that smaller routes only require basic maintenance, including filling the machines with cash and making sure the receipt paper is full. Installation costs can run between $200–$500, depending on the location and complexity. As for the machines themselves, a new, free standing ATM costs around $2,000 to $3,000, though you can find used ones for around $1,200. Keep in mind that you’ll need to have a lot of cash flow to maintain a fleet of ATMs, as each one typically goes through about $6,000–$8,000 per month.

5. Buy a successful blog

Blogging is a business that requires little overhead, though it can take months or years to create high-quality, original content that generates lots of page views. The good news is you don’t have to start a blog from scratch. There are plenty of successful blogs in place that are already generating revenue—whether it’s through affiliate links, display ads, sponsored content, etc.—and may be available for purchase on a marketplace like Flippa for as little as a few hundred dollars.

The older and more established the site, the better chance it has of generating ongoing passive income (and the more expensive it will be to buy). Your earnings will also depend on the blog’s subject matter. Google, for example, estimates that a beauty and fitness blog that receives 50,000 monthly pageviews could generate about $7,800 in Adsense revenue per month. On the other hand, a science blog with the same amount of traffic would bring in about half of that.

6. Rent out billboard advertising space

Selling ad space on a billboard you own is about the closest to a 100% passive income business there is. That’s especially true if you already own land where you can put up your billboard (keep in mind you may have to adhere to local zoning laws and/or obtain a special permit).

The startup costs to build one can range considerably. For a single-faced wood billboard, you may spend anywhere from $5,000–$20,000 to have it constructed, depending on the exact size and height. However, these costs may be well worth it if you have a great location. On the low end, advertisers in a rural town may pay around $250 per month for a classic billboard campaign. But if your billboard is located in a major city, you could charge $14,000 or more per month.

7. Invest in a self-storage facility

Often categorized as a niche real estate investment, another business that doesn’t take much day-to-day oversight is a self-storage facility. From 2009 to 2018, self-storage facilities averaged an annual ROI of 16.9%, which is higher than any other type of commercial property, including office, industrial, retail, and apartments. 

Storage facilities are also inherently low-maintenance, since the steel buildings are durable and require little upkeep. And with the help of technology such as kiosks, specialized surveillance, and web-based contract management, there’s no need for anyone to be on-site. However, if you aren’t interested in becoming the owner of a storage facility, you can also choose to be a passive investor in someone else’s business.

The takeaway 

There are many ways to make money on the side, from picking up a small side hustle to launching a new business. If you’re looking for something in between and don’t want to spend a ton of time, money, and effort keeping your side income flowing, consider a business that (almost) runs on autopilot. If you go this route, it’s crucial to do your due diligence, crunch the numbers, and invest in a business that can have long-term success.