Want to start a fully automated business to generate passive income?

You won’t believe how idea #10 turned the rise of AI into nearly $1 million in annual revenue and secured funding from venture capitalists.

We’ll share the characteristics of automated business ideas and discuss the 13 best automated businesses. We’ll also explain how to automate small business operations.

You can either keep reading or click on any of the links below to jump straight to the section that interests you:

What is an automated business?

An automated business runs without needing people to oversee everyday, repetitive business processes. Instead, you’ll have more time to focus on your overall business strategy and other important tasks.

These businesses are some of the best passive income plays. However, there’s often a lot of upfront work required before you can earn passive income. Business automation can apply to:

• Accounting and finance
• AI-driven automation
• Business processes
• Customer service
• Data entry
• Employee onboarding and HR processes
• Marketing and sales
• Purchase orders

Next, let’s look at examples of automated businesses.

Best Automated Business Ideas

Here are some business ideas that can be automated:

1. Vending machines
2. Digital products
3. YouTube
4. Affiliate marketing
5. Dropshipping
6. Content websites
7. Print on demand
8. Mobile apps
9. Music licensing
10. E-books
11. Rental properties
12. Self-service or automated car washes
13. ATMs

Keep reading to learn about these automated businesses.

Idea #1. Vending Machines

Vending machines are a perfect way to make passive income. The machines are fairly inexpensive, and they accept credit cards. Most only have to be filled once a week.

It’s simple to automate your work week to make consistent passive income. Check out our interview with Adam Hill. His company owns Hill Vending and makes over $50K monthly with minimal human intervention:

If this sounds like an interesting business model, check out Adam’s vending course with the UpFlip Academy. He explains everything you need to know to start or buy vending machine routes.

Keep reading for more businesses similar to vending machines.

Idea #2. Digital Products

Selling digital products like online courses, templates, spreadsheets, or calculators is a phenomenal automated business idea. Digital products only need to be created once but can be sold indefinitely.

Jacques Hopkins is living proof of just how easy it is. He started Piano in 21 Days and turned a hobby into $40K monthly revenue. Find out how he started his online business idea in the podcast below:

Idea #3. YouTube

Monetizing a YouTube channel means that you can earn ad revenue indefinitely after recording and posting videos. You can also automate or outsource most of the work, making this a great passive income play.

Find out how to start a YouTube channel with input from three successful business owners who have started their own YouTube channels.

Idea #4. Affiliate Marketing

Affiliate marketers promote products or services and earn a commission for each sale or lead generated through their referrals. Some of the best affiliate marketing niches include:

• Pets
• Technology
• Travel
• Finance
• Home security
• Gaming
• Outdoor
• Parenting

Listen to our interview with Matt Diggity to find out how he turned affiliate marketing into a $5-million-per-year empire:

Idea #5. Dropshipping Business

Dropshipping is an online business idea that’s really simple to start. You find products you want to sell, create a website, and market them. When someone places an order, the money is sent to the dropshipper and you keep the profits.

Find out how Ryan Hogue started earning $50K in passive income monthly from his online dropshipping business:

If you’d rather focus on social media, dropshipping expert Ross Stone teaches TikTok Dropshipping in the UpFlip Academy. Sign up for a free trial to learn more.

Idea #6. Content Website

Another idea is to write evergreen content and earn revenue from affiliate links and ads. Ads create passive income every time people view them, and affiliate links generate revenue every time someone makes a purchase.

Idea #7. Print on Demand

It’s easy to sell print-on-demand products like t-shirts, mugs, and bags with artwork. With this automated business idea, you design the products, maintain a website, and handle marketing. Then, when a customer orders, your print-on-demand partner prints and ships the product directly to the customer.

Idea #8. Mobile Apps

Developing mobile apps is another way to earn passive income through download fees, one-time purchases, subscriptions, and advertising. The average app makes almost $100K per year, while the top apps make up to $400 million each year. Pretty sweet for a passive income idea!

Idea #9. Music Licensing

You can either create your own music or buy the rights to music and offer it for use in movies, videos, and podcasts. You can earn $49 to $499 per license purchase.

Be careful when buying music licenses. Musicians are using Taylor Swift’s strategy of rerecording their albums to take back the master licenses for their work. Meanwhile, record labels are adding a Taylor clause to mitigate their risk.

Idea #10. E-Books

E-books earn royalties, and you don’t have to update them unless there’s consistently high demand over time. Then you might want to revise your books when information changes, but you could also release follow-up books to earn more money online.

Find out how Joe Popelas creates AI-generated books to earn more than $1 million as a small business owner:

Idea #11. Rental Properties

List assets like your home, car, parking space, or boat for people to rent. You’ll make extra monthly revenue with assets that are currently sitting idle.

My significant other and I have been planning our official wedding, and rental companies can generate revenue surprisingly well. The tux shop sells their outfits for $100 more than the rental fee, which means they’re profitable after just two rentals for each item.

Check out how Todd Baldwin buys real estate and earns passive income on home rentals. Surprisingly, he lives in his house for free because of his rental strategies.

Idea #12. Self-Serve or Automatic Car Wash

A car wash can be a fully automated business. You can also add a more personal touch like John D’Eri did when he started Rising Tide to help provide jobs for autistic employees:

Idea #13. ATMs

An automated teller machine (ATM) is another fully automated business model. You’ll place the machines at strategic locations and the money will be deposited into your account when people make withdrawals.

Best of all, you don’t even have to find the locations. Paul Alex started ATM Together and has helped more than 2,000 people start an ATM business with their full-service ATM offering:

What are five ways to automate your business?

Five common forms of business possess automation include:

• Marketing automation
• Email automation
• Workflow automation
• Test automation
• Process automation

Small businesses should use automation strategies on any repetitive tasks they can. This creates opportunities to generate income using passive income strategies.

Keep reading to learn more about ways to automate work tasks.

What is marketing automation?

Marketing automation uses technology to streamline marketing campaigns. With marketing automation software, you’ll be able to manage routine tasks without having to be as directly involved in day-to-day tasks.

Marketing automation helps small businesses target customers through email, social media, and other channels. You can watch your results in real time to make sure your marketing is effective.

Marketing automation often encompasses:

• Behavioral targeting
• Campaign management
• Social media management
• Customer segmentation
• Customer data management
• Email marketing
• Lead prioritization
• Personalized advertising

We recommend Tailwind for social media management.

What is email automation?

Email marketing is used to communicate with leads and clients. You’ll need email marketing software or a customer relationship management system (CRM).

Consider how customers progress through funnels. From there, create the emails you want the automation system to send to customers when they perform a specific task. Here are some common emails you’ll likely need to send:

• Welcome emails: You’ll want to send a welcome email and confirm that the customer intentionally subscribed to the mailing list. If you offered a sign-up discount, provide the customer with what you promised.
• Reminder emails: Automate re-engagement efforts such as sending emails about abandoned carts.
• Celebratory emails: Send emails triggered by birthdays, anniversaries, and other occasions to make people feel special. It might increase your income too.
• Company announcements: You can automate sending emails about product updates, launches, discounts, and other important business announcements.
• Feedback emails: You can ask for reviews, send surveys, and ask for other feedback to verify customer satisfaction and improve your offerings.

What is workflow automation?

Workflow automation uses software to complete tasks and activities without human input. In other words, it streamlines the movement of documents and data within work processes.

You can use workflow automation for more than just marketing and sales. You can also use it for accounting and human resources. Workflow automation can help you:

• Delegate tasks
• Increase efficiency and accuracy
• Reduce errors
• Reduce manual work
• Reduce repetitive tasks
• Track progress

What is test automation?

Test automation streamlines software development and quality assurance processes. The goal is to create automated scripts or test cases that can be executed automatically while simultaneously increasing precision and speed.

This can be particularly helpful when you start an online business. If you use automated systems to process payments for an online business, you’ll need to test your systems for vulnerabilities and accuracy.

What is process automation?

Process automation is similar to workflow automation, but it covers the big picture instead of individual tasks. For instance, your online store might have an automated process to fill an order, update inventory, and ship the product.

Meanwhile, a workflow would focus on a single department, which means you would have separate workflows for:

• Processing the order
• Updating the inventory
• Shipping the product
• Accounting for the financial aspects of the transaction

Workflow automation is usually a component of a broader process automation strategy.

How do I automate my business?

If you want to start an automated business, you’ll need to plan carefully and think through which tools you want to use. Here are steps to guide you through the process:

1. Define your goals.
2. Identify tasks to automate.
3. Choose your automation tools.
4. Establish process boundaries.
5. Establish clear roles.
6. Track results.
7. Refine your processes.

Every small business should take this approach while pursuing online business ideas or launching local service businesses. While it may cost more upfront or increase your overhead expenses, you’ll save time and money by automating your business.

Keep reading to learn more about each step.

Step #1. Define your goals

Automation business ideas need to be well suited for your goals. Before you start automating your business, think about what you want to accomplish. Some common goals for online automated business ideas include:

• Earning steady cash flow
• Increasing profit margins
• Improving efficiency
• Getting more work done without hiring new employees

Once you know what your goals are, it’s time to identify repetitive tasks.

Step #2. Identify tasks to automate

Look for tasks that take too much time or resources. How many of them could be completed by a machine or a software tool?

You’ll want to find tasks that are:

• Repetitive
• Boring
• Time consuming
• Distracting
• Prone to human error

Basically, find tasks that feel like a chore, don’t add value to paying customers, or cost a lot for people to do. Those are the best candidates for automation.

Step #3. Choose your automation tools

You’ll need workflow automation software that can connect systems and reduce the problems caused by manual tasks. At a minimum, you’ll need the following to run an automated business:

• Internet connection
• Accounting software
• Email marketing software
• Customer relationship management software
• Your own website
• Social media accounts and monitoring

Each of these will play a crucial role in your ability to pursue hands-off business ideas. Keep reading for how these influence the best passive businesses to own.

Internet connection

You can’t benefit from low-cost automated business ideas without getting an internet connection. You’ll need an internet service provider (ISP) to make your business data, website, and business finances more manageable. Contact your local ISP to set up your internet connection.

Accounting software

You’ll need an accounting software company to manage your business finances. Most online businesses that run themselves use QuickBooks.

Their advanced accounting has the workflow automation features you’ll need for an automated system. Still, we suggest talking to QuickBooks support to ensure you get the most affordable plan with all the features you’ll need.

Email marketing software

There are some standalone email marketing software providers, but almost all CRM providers offer email automation. It usually makes sense to start with the lowest plan and upgrade to more advanced options as you scale your business.

Customer relationship management software

You’ll need CRM software to keep track of target users and clients across all communication points. You might also hear this referred to as client management software (CMS).

A CRM or CMS system helps you store information on your target audience, including names, emails, addresses, phone numbers, and social media accounts. You can also track where people are in your sales funnel.

We recommend using either HubSpot or ServiceTitan.

Your own website

Whether you’re a consulting business, self-publishing, or running vending machines, you’ll need a website to help customers learn more about your business. You’ll want to optimize your website using search engine optimization techniques to show up better in search engines.

You might also consider writing a weekly blog post. Updating your website frequently signals to Google that you’re an active business.

Learn more about creating a website.

Social media accounts and monitoring

Social media marketing is crucial to any strategy to automate money-making. You’ll need to set up all your social media channels and connect pixels to your website. Remember to also connect your social media to your CRM and other software that needs access.

Once all the integrations are done, you’ll need some tools to support passive income automation. Consider the following types of software for social media monitoring and management:

• Marketing automation software
• Chatbots
• Pixels and tags

Keep reading to learn more about how small businesses use each of these automation tools.

Marketing automation

Marketing automation software isn’t just for email. It can also help you manage your social media outreach by automating tasks like making posts.

Chatbots

AI chatbots can instantly respond to queries about product offerings and customer issues. Ideally, whenever you answer a question, you should add the question and the answer to the chatbot. Over time, you’ll have to answer questions less and less.

These chatbots can be connected to social media and websites. I imagine they would even work for automated SMS communications. However, I haven’t seen any automated businesses manage frequently asked questions like that just yet.

Zapier has a great list of AI chatbots. You should look because it’s one of the more common integration tools to have.

Pixels and Tags

Fully automated businesses almost always use pixels and tags for smoother marketing operations. Tags are just bits of code that you add to the web page’s header.

Once you’ve done that, it will track user interactions with your page to help you make better advertising decisions. You can also use tags for advanced marketing strategies like retargeting people who added something to the cart but didn’t buy it.

Keep reading for more about how to use automation tools for your small business.

Step #4. Set business process automation boundaries

Business process automation uses intelligent systems to streamline how you run and manage your business. That doesn’t mean automated processes should be used in all scenarios. You’ll need to set limitations on how they operate.

Consider whether you need a process to operate at specific intervals or based on certain triggers. Creating the proper boundaries is crucial to maintaining the affordability of software. Check out how time intervals can impact automation costs below.

NOTE: These numbers are not based on actual costs. Most software will have set price points based on running processes a specific number of times. Then they’ll charge extra for each additional process or step.

As you can see, if you ask for real-time information when you only need hourly, your business will need to process 3,600 times as much data. You’ll likely have significantly higher automation and data storage costs to support your business idea.

Next, you’ll want to consider people’s roles when looking at passive income businesses to buy.

Step #5. Establish clear roles

What happens with the parts of a business that you can’t automate? Examples include things like stocking a vending machine.

Establishing clear roles for the people involved in implementing, maintaining, and working alongside automated processes is essential. You’ll want to create standard operating procedures (SOPs) to help create a business that runs itself.

Step #6. Track results

Once you have all the business process automation and SOPs set up for your passive income ideas, you’ll need to track the results for your small business. This is where pixels will help you.

Step #7. Refine your processes

It’s not enough to automate your business and let it keep running. Best practices change and your business will grow as you get more customers. This means that you’ll need to update your automation processes to make sure that they stay relevant and cost efficient.

You should also revisit your processes whenever results aren’t as expected. If you aren’t selling as many products or you’re losing customers as time goes on, check your automation to make sure everything is functioning properly.

Step #8. Create an efficient culture in your workplace

While a software tool can help you achieve many of your goals like monitoring social media or keeping in touch with customers, even the best businesses will need human intervention for some aspects.

The key is to make sure that these tasks are actually necessary and contributing to the success of your business. You’ll want to teach employees to look for ways to automate the business and reduce the time they spend doing monotonous tasks.

Paul Akers is one of the leading minds when it comes to running a lean business. Check out our playlist with him below to learn more about building a culture that continually improves the company’s efficiency:

Which business idea do you like?

We’ve discussed automated eCommerce business ideas to help you understand automation. Then we provided you with 13 business ideas that allow you to automate income generation.

Lastly, we discussed how to automate your business. As you can see, almost any business can benefit from automation. 

What other online business ideas have you seen fully automated? Let us know in the comments below.