---
title: "Called passive, but relies on staff or contractors"
url: https://firstpassmemo.com/flags/called-passive-but-relies-on-staff/
updated: 2026-10-07
publisher: FirstPass Memo (hello@firstpassmemo.com)
---

Red flag explained · Verification, age and operations

# Called passive, but relies on staff or contractors

Short answer: A listing that calls the business passive while mentioning writers, virtual assistants, developers or other contractors is describing work that someone does. That is not wrong, but those people cost money and may leave with the seller. Ask who they are, what each costs and whether that cost is in the P&L.

Updated 7 October 2026 · Checker rule PASSIVE_VS_STAFF

## When the checker raises it

Raised as medium severity when the text uses words like passive, hands-off or turnkey and also mentions contractors, freelancers, writers, developers, VAs, staff or a team.

## Why it matters

Passive usually means passive for the owner, because someone else is paid to do the work. If the contractor costs are in the P&L, the profit figure is honest. If the seller pays them personally, it is not.

Contractors who have worked for the seller for years may not stay for a new owner, or may ask for more.

## A worked example

Composite example, not a real listing

YouTube channel, true crime documentaries, 340k subscribers Asking price: $70,000 Average monthly revenue: $3,600 (AdSense and sponsors) Average monthly profit: $2,900 Business age: 3 years Owner hours: 3 hours per week Fully passive: a freelance writer and a video editor handle every upload

What the red-flag checker (https://firstpassmemo.com/checker/) returns: payback of 24.1 months on average monthly profit, and this flag:

Medium Called passive, but relies on staff or contractors

The text describes the business as passive while also mentioning people who do the work.

Ask: Who are the contractors, what does each cost, is that cost in the P&L, and will they stay?

The same example also raises: Depends on YouTube, Mediavine/ad network (https://firstpassmemo.com/flags/depends-on-a-platform/), No traffic data for a traffic-driven site (https://firstpassmemo.com/flags/no-traffic-data/), No connected data source mentioned (https://firstpassmemo.com/flags/no-connected-data-source/), Concentration not disclosed (https://firstpassmemo.com/flags/concentration-not-disclosed/).

## What to check

- Ask who the contractors are, what each costs and whether that cost is in the P&L.

- Ask whether they have agreed to stay after the sale, and on what terms.

- Ask for written process documents for what each person does.

## Questions to send the seller

- Who are the contractors, what does each cost, is that cost in the P&L, and will they stay?

- Who are the contractors, what does each cost, is that cost in the P&L, and will they stay after the sale?

- Are there written agreements with each contractor, and who owns the work they produced?

- How much of the content do you write personally, and would readers notice a change of author?

## Related flags

- More than 10 hours a week (https://firstpassmemo.com/flags/owner-works-over-10-hours-a-week/)

- Margin above 90% (https://firstpassmemo.com/flags/very-high-margin/)

- All red flags explained (https://firstpassmemo.com/flags/)

## Useful next

- Buying a YouTube channel (https://firstpassmemo.com/buy/youtube-channel/)

- Free red-flag checker (https://firstpassmemo.com/checker/): paste a listing and see which flags it raises.

The checker is a set of plain rules, not an AI model, and its flags are prompts for questions, not verdicts. Composite examples are invented. Informational screening only, not investment, legal or tax advice.

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FirstPass Memo is informational screening, not investment, legal, tax, accounting or valuation advice, and not an audit. Seller figures are not independently verified. HTML version: https://firstpassmemo.com/flags/called-passive-but-relies-on-staff/