Should you create a course to generate passive income at your agency?

In my work advising agency owners, a client recently asked: “Should I create a course at my agency?” They knew I offer various training programs for agencies, and were curious if they should create a course, too.

My answer: “Maybe.” There are many reasons to create a course… and many reasons not to do it.

• If you get it right: You can generate residual revenue, attract future agency services clients, learn new things, and perhaps even create a legacy in the industry.
• If you get it wrong: You’ll waste time and money… and miss out on other opportunities that might have a higher ROI.

It’s tantalizing, right? The potential of a new revenue stream, the boost to your agency’s authority, and the potential to attract new clients. But before you start outlining a course, let’s take a step back and consider whether it’s the right move for your agency.

My experience: Creating 15+ courses over the past decade

Over the years, I’ve created and sold about 15+ courses—including live programs, on-demand courses, and other information products—across a range of formats. Several have done OK, while others were—in retrospect—a waste of time. I’ll share what I’ve learned along the way, so you can make better decisions.

Creating a course is NOT easy. They aren’t 100% passive income or “mailbox money.” They can be lucrative, but you need to pick the right topics and the right target audience… and then you’ll need to market it well to get sales. Otherwise, you risk building something that no one wants to buy.

What you’ll get from this article

In this article, I’ll help you decide whether to create a course at your agency. We’ll talk through potential business goals (good and bad), formats, time commitments, and more.

• Although much of the advice applies when you do a speaking engagement for someone else, we’ll focus on self-hosted events—where your agency sets the agenda and collects the revenue).
• Also, we’ll focus on virtual courses (live or on-demand)—because in-person workshops or conferences add an extra layer of complexity.
• Finally, we’ll focus on B2B courses (where a company paid for an employee to take it, instead of a B2C purchase).

By the end of the article, you should have a better idea of whether you want to pursue course creation—through the agency, or on your own via your personal brand. Next month, I’ll share more on how to get started—including pricing, marketing, and other considerations if you choose to move forward. Sign up for my newsletter, to get notified as soon as the “Part 2” article goes live.

What is a “course”?

For our purposes, a course is a step-by-step training program designed to solve a business problem. Participants have a goal, and they buy your course because they think it will solve your problems.

• The course is “curriculum-based.” That is, it’s designed to get participants from Point A to Point B. It’s structured to achieve that learning outcome; it’s not just throwing a bunch of unrelated things at them.
• The course is measurable. That is, you and attendees will know if they met the learning outcomes (or at least, could theoretically measure this).
• The course is a tax-deductible business expense. That is, it’s a B2B purchase that the buyer incurred as a business expense (rather than a self-pay purchase), and they assume they’ll get some degree of business ROI from the course.

Within that definition, there are lots of potential formats. Let’s explore.

What are the potential formats for a course?

Here are some course formats I’ve used. You can probably think of more formats, too.

• Webinar: Live or recorded, people get 30-90 minutes of content, delivered in a primarily lecture-style format.
  • There may be some interactivities, but guests typically aren’t networking with each other. The learning objectives are less ambitious than for a workshop, partly because webinars tend to be shorter than workshops.
  • There’s a price ceiling for webinars, considering that your paid webinar is competing with free “lead-gen” webinars.
  • I’ve delivered webinars on a range of topics, with my “recorded webinars” as the recorded version of this format.
• In-person workshop: Live program, typically for under 50 participants. Usually for 2-8 hours (with breaks), and usually with small-group breakouts.
  • There might be a social component before or after the workshop, to facilitate networking between attendees. They might also include a “hot seat” option, for people to get live feedback from the trainer.
  • I haven’t self-hosted an in-person workshop in years, and COVID doesn’t make me any more eager to do it. But I’ve done in-person workshops for others—primarily for lead-gen purposes—where others have taken on the “organizer” risk (in return for their making more money from the event).
• Live virtual workshop: The remote version of the in-person workshop, including virtual versions of interactive exercises. Sessions are more likely to be 2-4 hours long (it’s hard to keep virtual students’ attention for a full day).
  • These often include multiple sessions over several days or weeks. They’re also likely to have some form of virtual community, for participants to communicate with each other during the program.
  • Compared to on-demand, you’ll have more room to improvise and handle unexpected questions—but also higher demands on you (as the live presenter). You’ll definitely need someone serving as the “producer,” to handle technical issues.
  • I’ve done several of these: the “Work Less, Earn More” bootcamp, the 8-week Agency Leadership Intensive, and a 3-week “How to Stop Scope Creep” workshop.
• On-demand training: This is a self-contained, self-directed course that people take without a live instructor.
  • Some courses have a monitored community, where the instructor or a “teaching assistant” help in some way. Others operate completely in a vacuum.
  • If a course is 100% on-demand, you’ll need to anticipate what people will ask and wonder about. In a live course, people will just ask… but on-demand, you’ll need to accurately “guess” all of this in advance. It can be time-consuming to record, to get it “just right.”
  • Compared to live, on-demand tends to sell for a lower price—but the margins are theoretically higher. However, if it’s content that “ages,” you’ll need to update, re-record, and re-release it in the future.
  • My “Agency PM 101” training fits this format; I’m also exploring creating an “AM 101” follow-up course.

Other things have aspects of courses, even if they’re not exactly courses. Those include: blog posts, books, eBooks, email courses, “fireside chat” webinars, mastermind groups, online communities, and conferences.

Should you create a course at your agency?

Yes, you should consider creating a course. But whether to do it? That requires some strategic exploration.

Let’s look at potential business goals—including some where a course would help, and some where a course wouldn’t help (and might even hurt your goals).

Business goals: Why would an agency create a course?

Here are some good reasons to create a course at your agency.

1. Get paid to do something you’re currently sharing for free.
2. Generate revenue from people who’ll never afford your higher-priced help.
3. Generate more-scalable “residual” product income, compared to your agency’s services.
4. Create a stepping-stone to help people who might buy your higher-priced agency services in the future.
5. Learn more about a topic you’re curious to explore.
6. Find something productive to do with your time, once you’ve made yourself “optional” at your agency.
7. Get ideas for future services and marketing content.
8. Create something that builds your legacy in the industry.
9. Diversify your income, especially if it’s a side project that you run separately from the agency itself.
10. Increase your potential future valuation, by creating new intellectual property.
11. Offer new opportunities for your team to share their expertise.

Do those sound like you? Excellent. Read the rest of this article for tips and other advice to help you get a good ROI.

Are there bad reasons, too? Oh, yes—read on.

Bad goals: Why would an agency NOT create a course?

Here are some bad reasons to create a course at your agency.

1. You expect to generate “passive” income, with little effort.
2. You don’t have time much to create a course.
3. You don’t want to spend money on strong production values.
4. You need the course to generate six or seven figures, immediately.
5. You don’t like teaching people who know less than you do.
6. You don’t want to do ongoing marketing (and sales) to generate revenue from the course.
7. You expect the course will be good forever, and you don’t want to make regular updates.
8. You want to sell something you’ve already thrown together, and don’t want to spend time updating it.
9. You’re getting bored, and you see a course (or becoming a coach, or…) as a way to “escape” the agency.
10. You want to start with a 100% on-demand course that you haven’t delivered “live” before.

Do those bad reasons sound familiar? If so, that’s OK—but I’d think twice about creating a course, because you won’t be happy with the ROI.

It’s OK to say “no” to creating a course

At a previous marketing agency, one of our clients was the NC Center for Nonprofits. They have an excellent publication: “How to Start a Nonprofit in North Carolina.” At the beginning of the guide, they asked: “Should you start a non-profit?” Paraphrased, their advice was:

“No; this is really hard and complicated. You should probably work with an existing non-profit instead of starting your own. But if you still really want to do this… read on.”

Likewise: You might decide “no” on creating a course, or perhaps “no for now.” And that’s OK: you can use your time and money to do something else.

What major decisions do we need to make about creating a course?

When my client asked whether they should create a course, here are some of the questions I asked them.

1. What are your primary and secondary business goals in doing this? Go back to the list of business goals I shared above. Are you aligned to some, most, or all of the “good” business goals? Do you have reasonable expectations? And before you proceed… is doing a course the best way to reach your business goals?
2. Is the course a “profit center” or a “cost center”? If you need the course to be highly profitable by itself, that’s a challenge. That is, you’ll spend a lot of time to create it, usually without guarantees on how much money you’ll make. It’s easier if the course is a “cost center”—where it’s designed to generate leads (or hand-raises) for your more expensive services. But that adds its own complexity.
3. Will the course be virtual or in-person? In-person is fun, but it adds a whole layer of complexity around student travel—and your travel, if you aren’t leading the in-person program in your hometown. Virtual is a lot more flexible for you and participants—and you’ll probably sell more virtual tickets, especially if the total cost of attendance is lower than if people needed to travel.
4. Will the course be live, on-demand, or both? There are pros and cons to the delivery methods. Live is more flexible, because you can answer questions and (within reason) adjust topics along the way. On-demand has higher profit margins, but you’ll invest more time up front to “head off” student confusion.
5. Who’s the target audience? Are you targeting the course to your existing clients, to smaller-budget versions of your current clients, or to someone else entirely? How well do you know what the audience needs? If you don’t speak their language already, it’s going to be harder to sell your course.
6. Will the course skew “evergreen” or “hot topic”? A hot topic might get more sales, but you’ll need to re-create the talk to present it again… or it might no longer be relevant. Evergreen tends to be safer, but there’s no guarantee. I originally had the idea that it would be “rinse and repeat” (where I could create the content once and then deliver it forever). That hasn’t been true. I want to fine-tune content (and cadence) each time, based on student feedback and my own debriefs.
7. If the course is on-demand, what platform will we use? You’ll want to use a learning management system (LMS) to host the recording(s), process payments, and manage student access. LMS selection is beyond the scope of this article, but here are a few leads. I use Teachable; other options include Kajabi and Thinkific. If you’re hosting a recording, Gumroad is a simple quickstart solution (no ongoing fees, but a high commission on each sale).
8. Is the course one-time, or is there a recurring fee? You might offer a payment plan on an expensive workshop (as long as people make the final payment before the course starts). But courses generally aren’t recurring revenue (unless you’re selling access to a whole library of courses). If you want follow-on revenue, consider that as you create and market the course.
9. Who’s teaching the course? If you plan to sell your agency, consider enlisting your team to help (so that the agency’s intellectual property isn’t tied to your personal brand). Or if you’re intentionally building your personal brand, then be the one to teach the course.
10. How much time are you willing to invest? As I share below, even a simple webinar might involve 40 hours of your time to create, deliver, and promote. A workshop series might require 100+ hours of work. And there’s no guarantee on the sales you’ll get, unless you use a crowdfunding-style sales model.
11. How much money are you willing to invest? If your course goes viral, your initial investment will be irrelevant—but that outcome is unlikely. Your time has value, especially if you’re still doing occasional billables for clients. But you’ll also likely have hard costs (paying freelancers, and paying sales transaction fees) and soft costs (your salaried team’s time, in addition to your own time). See below for some financial examples.
12. Are you creating a one-off course, or starting a training series? A single course is easier than a series. But if your first course does well, you’ll want to add more; in that case, how do the courses fit together. You don’t need a full roadmap before you launch the first course, but start thinking about how things might together.
13. What’s your risk tolerance? You are likely going to invest time and money (including your time as money), without a guaranteed return. For instance, I did several “training webinars” in 2020. With several months of promos, one sold $4,000 in live tickets. Another (on A/R collections) initially sold only $800—but then more via recordings. The live cohort-based programs have all sold more… but they require creating more-complex programs that take longer to deliver.
14. What self-marketing resources can you access? If you have a big email list that’s filled with people in the course’s target market, you’re in good shape. If you never built your list, and you don’t have industry connections to help promote your course, and you don’t have a dedicated self-marketer at the agency… it’s going to be an uphill climb.

Let’s dig deeper on the time and money this might require, because it might scare you away.

Time and money: What are the economics of creating a course?

Unless you’re a course creation savant (I’m not), creating a course will take longer than you think. Why? Because there are a lot of moving parts.

Hypothetical example: Doing a simple paid webinar

Say you want to create a simple webinar that you’ll deliver live, and then sell as a recording. You’re an expert on the topic you choose, and you have a small email list that includes people who’d buy the live ticket and/or the recording.

Let’s say you charge $100 for the webinar, you sell 20 webinar tickets, and you initially manage to sell an additional 15 recordings at $100 apiece. That’s $3,500 in gross revenue. For simplicity’s sake, we won’t count your salaried team’s time… but you’re likely to need their help.

How much time might this take?

Here’s how you might spend time to make that happen. (Tip: Use this list to start planning your “workback” schedule.)

• Brainstorm ideas, and write an initial blurb: 3 hours
• Get feedback on the initial blurb: 2 hours
• Revise things, based on internal and external feedback: 2 hours
• Create the initial outline: 1 hour
• Build the initial slides: 4 hours
• Get feedback on the initial slides: 1 hour
• Revise the slides, to make things more coherent: 2 hours
• Work with freelance helpers: 2 hours
• Practice the talk: 2 hours
• Market the talk: 5 hours
• Answer “sales” questions from potential buyers: 3 hours
• Deliver the talk, including prep and debrief: 2 hours
• Load the recording to Gumroad: 1 hour
• Create marketing materials to promote the recordings: 4 hours
• Answer questions from potential customers: 2 hours
• Miscellaneous unplanned time (add 10-15% to the rest): 4 hours
• TOTAL TIME: ~40 hours

What do the finances look like?

Remember, the $3,500 in hypothetical gross revenue (from live tickets and recordings) isn’t your net revenue.

• Let’s say you pay 10% in fees on the live tickets, and 20% in fees on the recordings.
• Generative AI can help, but probably less than you’d like. Let’s say you paid your freelance designer $400 for help with your slides, and you paid a freelance strategist $500 for specific feedback on the talk.
• All-in, that’s $1,325 in fees—for $2,175 in net revenue.
• We won’t count getting help from your salaried team on marketing the event… but you probably needed their help, and it took them away from their other priorities.

What’s the ROI? Well, you spent 40 hours (not counting your team’s time) and (after delivery and freelancer fees) made $2,175 in net revenue. That’s just $54 an hour —compared to, for instance, billing clients $300/hour for your time.

• If you were making a multi-week course, you’d have higher total revenue… but also a bigger time investment.
• And marketing and sales are more complicated, when you’re selling a $1,500 course rather than a ~$100 webinar.

What if you charge $250 for the webinar (20 tickets), and $150 for the recording (15 tickets)?

• You’d get $7,250 in gross revenue; $5,400 in net revenue (after freelancers and fees).
• That’s an average of $135 an hour. Better, but not exactly 100% “passive” income.
• And higher prices usually mean a drop in “units sold,” so it likely wouldn’t be 20+15 spots.

Can you “make it up” later? Well…

Is there a longer-term financial upside here?

Yes, revenue can extend beyond the original program. But you’ll want to approach this strategically.

Yes, you can keep selling the recordings (if it’s an “evergreen” topic) and sell future tickets when you repeat the training again in the future. But that will require additional marketing to make that happen. And odds are, you’ll want to update at least some portion of the training, based on what you learn the first time.

The more strategic solution? Focus on back-end sales. That is, the webinar is designed to encourage a portion of participants (perhaps 5-20%) to raise their hand to hire your agency for a project or a retainer.

I’ve had mixed results on this. My courses and information products are often part of the buying journey for people who later become 1:1 services clients. But most info product customers never buy anything else.

Should we hire someone else to create the course for us?

Can you outsource course creation to someone else? Probably, but I haven’t done that… or at least, not 100%. My team helps with design, feedback, and production support—but I’m still the “showrunner” for courses at Sakas & Company.

• If you’re not excited about creating courses to help people, you probably shouldn’t be creating courses. If your course is solely a money grab, your prospective student will notice. If they haven’t bought yet, they won’t. And if they’ve bought the course already, they’re likely to request a refund.
• The economics may not work, either. Remember the first hypothetical? If you now paid a freelancer for 30 hours at $75/hour to create the course, you’d still need to spend some of your time… and the gross profits would drop further. If this outsourcing meant you could focus on marketing the course, that might boost revenue.

But ultimately: how does this course revenue compare to a single project or a single month of a retainer? If you build an evergreen course that sells out every year or every quarter, you’re in good shape. But if you invest time in a course that doesn’t pay off, you’ll have chosen poorly.

Seek additional training and other resources

If you’re serious about creating courses, plan on spending 10-20 hours learning about course creation (on top of creating your first course itself). Like being a designer or developer or copywriter, course creation is a craft itself.

Here are some resources to help up-level your course creation skills.

• Read The Workshop Survival Guide by Rob Fitzpatrick & Devin Hunt. This is a must-read.
  • Ideally, read it before you create anything. As the subtitle notes: “How to design and teach educational workshops that work every time.”
  • The book is targeted to people who have prior experience creating workshops—and who want to improve their courses—but even if this is your first, you’ll get the lay of the land.
• Check out Smart Passive Income by Pat Flynn.
  • There are several free options. If you like those, you might consider buying his marquee Heroic Online Courses program. (I haven’t bought it, but I would if I were new to creating courses.)
  • Even if you don’t buy anything, SPI courses are known for having strong production values. You’ll see ideas of things to try yourself. But keep in mind that he has an entire team supporting him, so don’t expect to match his results in your first course.
• Consider joining the National Speakers Association or your local equivalent.
  • NSA is the place to go if you’re a professional speaker, or if you want to make money from speaking or speaking-adjacent activities. It’s not just keynotes; many NSA members are corporate or freelance trainers, and members often create courses to extend their reach.
  • The focus is “speaking as a business,” rather than “speaking skills” alone. There are national resources, and there are local NSA chapters (including the option to attend as a guest, at a higher per-event price). For instance, I’m involved in NSA Carolinas, the chapter for North Carolina and South Carolina.
  • If you’re outside the U.S., check out the Global Speakers Federation to find your nearest options—like the Canadian Association of Professional Speakers or Professional Speakers Australia.

Don’t want to make the leap to something like the National Speakers Association?

• Consider Toastmasters as a first step. My parents sent me to Toastmasters while I was in middle school; I didn’t love it at the time, but I’m glad they did. There are chapters all over the world, and their programs will help improve your speaking skills. Each chapter has its own culture; shop around if you don’t like the first one you visit.
• You might also check out the Association for Talent Development. ATD focuses on people who do corporate training, but some of their “training on training” includes programs about facilitation, instructional design, and more.

Regardless, be sure to read my “Part 2” article next month—on how to create and sell your course. Sign up for my newsletter to get notified as soon as the article goes live.

What should you do next?

From what I’ve shared here, should you create a course? And if so, what’s the right format and topic? Consider taking a few hours to reflect on what I’ve shared here, and then regroup with your executive team on what to do next.

I share more on steps you can take to creating a course, including pricing, marketing, and tips on delivery. Don’t miss out—see “Part 2” here.

Good luck! If you’d like my 1:1 consulting advice as you create your course, please get in touch and my team can recommend options. Imagine: if you’re not sure what to do next, just a call or two could save you dozens of hours of work.

Question: What’s your next step, to decide whether to create a course at your agency?