Recurring revenue is the holy grail for many businesses. To the point that businesses with recurring revenue are often valued 5x higher. Yet it’s far more common in some industries than others. For a Software as a Service business it’s the standard, but most companies have little to none.

Challenge yourself to create a subscription based product or service. It’ll simplify your operations, smooth your cashflow, and improve your customer experience.

Of course, it’s easier said than done. So here’s a bunch of examples to start your brainstorming session:

• Offer automatic purchases to customers (e.g. Pet Circle provides free delivery for repeat deliveries)
• Launch a paid membership with benefits for customers
• Provide services on a recurring schedule (lawn care, home cleaning, car wash, etc.)
• Start a paid newsletter with industry-insider knowledge
• Launch a paid community or content/resource platform for your industry
• Offer maintenance contracts
• Licence anonymised statistics and trends
• Launch a niche SaaS product

Service businesses often feel their work is too varied to offer anything as a subscription. The key is to package up services as a product, often called a productised service. For example, at Vokke we used to work with clients on a per-project basis. Now, we work with most clients on a subscription basis where they get a dedicated team for a set monthly cost. This is better for us (recurring revenue, faster sales cycle, easier scheduling), but it’s also better for our clients (faster project turnaround, discounted price, etc.). We’ve also added other ‘products’ like monitoring, threat intelligence and hosting.

We use Practice Ignition to manage our smaller subscriptions (with simple recurring invoices in Xero for the larger ones). They built it for accountants, but we’ve used it for years. You send an online proposal, and customers view the offering, accept T&Cs, and enter their payment details. The software then handles the monthly billing ongoing, including renewals and price changes, etc.

While it’s not easy to introduce recurring revenue into your business, it can be a meaningful way to grow sustainable profit.

I love this stuff, so hit me up if you want to brainstorm!

Until next time