If you've been in business for awhile or are considering starting a new business… you might have heard about the “holy grail” of business models.
That's why today we're sharing 7 of our favorite recurring revenue business ideas, to get you going.
Any time you create income that is predictable and reliable month-over-month, it is recurring revenue. If you're not convinced this might be a good idea, grab a copy of the book “The Automatic Customer” by John Warrillow. It's an eye opener!
Many business ideas require hard work and persistence, but pay off in the long run because the revenue stream is consistent, which brings your business the cash flow necessary to grow.
With enough recurring revenue, you are freed to focus on providing the best possible customer service to your clientele, knowing that your time is best spent serving your current revenue streams rather than going out and trying to pitch to new customers.
As you focus on customer service, your word of mouth marketing and brand loyalty increases; this brings in new customers naturally and organically.
The more obvious recurring revenue business model…
If you've ever signed up for or heard of the “box subscription” model then you know it's a powerful thing. In fact, it's taken many markets by storm.
My favorite example of this subscription model was created by my friend Andy over at Plum Deluxe. I signed up for this monthly tea subscription program on a whim to check out what all the fuss was about… and I'm hooked!
Now I look forward to my new tea blend each month, and brewing a cup of tea each morning has become a comforting ritual that sets me up for an amazing day ahead.
At this point, I wouldn't want to quit my subscription and you know that's a great business model… So let's take a look at how you can do something similar, even if you're not in the physical product business.
Here Are Some Proven Recurring Revenue Business Ideas
1. SaaS – Software as a Service
SaaS, or Software as a Service, is any software that is sold on a subscription basis. Because of the monthly nature of cash-flow, SaaS programs naturally drive customer service and increase quality.
In 2012, Adobe switched their Creative Suite to a cloud subscription service. This one choice has drastically increased their annual income, provided their products to more small businesses and increased their value.
There were some glitches that happened while large companies like Adobe and Microsoft transitioned their software models… But they were simply taking a cue from nimble entrepreneurs and small businesses that had grown successfully with the software-as-a-service model.
One of the reasons we chose to offer our AccessAlly plugin as a subscription software is because we're constantly investing our time and efforts into improving the plugin's features and efficiency…and we know that our ongoing clients appreciate these efforts!
If you have a software package, consider offering it on a subscription basis. You can offer higher quality customer service for your customers and recurring income for you!
2. Affiliate Subscriptions
If your business doesn't offer software, how can you take advantage of the SaaS movement?
With affiliate sales, of course!
As an affiliate, you can direct your customers towards the products that make your business run better. They'll appreciate hearing from someone they trust, and are more likely to invest in these same products to make their business run better, too.
When one of your referrals purchases the software of an SaaS program, you, as an affiliate, will receive income from the purchase, every month for as long as they are subscribers. This gives you a part of the software income, while avoiding the costs associated with developing your own software just for recurring revenue.
3. Affiliate Sites
Many businesses online are willing to pay for help directing customer traffic to their websites besides just SaaS software companies.
To provide recurring revenue to your business with an affiliate site, you need a product you can passionately support, adequate website traffic and well-written copy to show readers why they should purchase the product you are marketing.
Many affiliate sites can bring in $500 a month in recurring revenue after a year. These sites will likely not make up your entire business, but they can help increase your recurring revenue stream with some initial effort.
Some ideas to get you going include website hosting plans, and online course subscriptions.
4. Membership Sites
These are great for increasing your customer base, managing your sales funnel and creating recurring revenue for your business!
A membership site adds value to your sales funnel by automating access to some of your products or services for a regular fee. Membership sites charge by the month or year, or both and offer access to routine services or information.
Take a look at our Heartquarters Insider program, for an example of how to structure a membership site offer.
So, for example, instead of spending all your time teaching people how to use software one-on-one, you can set up a membership site that will teach them all the steps to successfully run their business using proven software.
This can also give your customers reliable and affordable support over time.
Hey, if you're on the tech-y-er side of things and want to see the ins and outs of a membership site, check out our free AccessAlly demo site here! You'll get to see some neat features and maybe find a few ideas that will work for your own business.
5. Create Service Plans or Retainers
Many businesses offer products and services that need regular renewal.
Rather than approaching a customer each time they need help with something or need more of your product, offer service packages where they pay for what they need each month.
You earn more recurring income without having to pressure people to buy again and again, and customers receive a discount on the service or regular purchase of products in exchange for the reduced hassle on your part.
So let's say you're a web designer or a freelance graphic designer… You know that your clients will need new marketing materials or a website refresh every quarter, at the very least.
So instead of having to quote them a new project each time, why not offer a package that covers your clients for an entire 3 months? Or a year-long program to keep them growing from beginning to end of the fiscal year?
6. Offer Supplemental Services
Here's another recurring revenue business idea you might not have considered: You can generate additional income through the process of offering tangential services or products.
Whether you are a web designer offering hosting, an interior decorator offering cleaning services, or a business coach offering time management software, supplemental services provide high value for your business and your customers.
These supplemental services offer opportunities to increase your recurring revenue, increase the value of your business by diversifying your product line and increase customers' received value.
Think outside the box on this one if you're stumped. What do your clients also need when they decide to work with you? Do have the “hook up” that might save them time or money? Share it with them!
7. Online Courses Set Up As Evergreen Programs
Similar to a membership site, online courses are a little more geared toward offering specific information regarding your business.
Often, online courses on their own do not bring in recurring billing. However, with a strong sales funnel, they will bring in consistent recurring revenue from new sales.
For this to be successful, you'll have to create a marketing “crank” that you can turn to generate new business. This could be in the form of Facebook ads, ongoing content marketing efforts, or even running a social media challenge.
But once you've got some momentum going, it can turn into a source of recurring sales.
Recurring Revenue Starts With The Right Values
It's easy to get caught up in the glamour of recurring revenue business ideas… and the fantasy that you might only need to work on something once to get paid indefinitely.
That's why many business owners try to create recurring revenue by aggressively pushing their products, creating a high pressure sales funnel and disrespecting their customers. Yuck!
There's a better way!
All of these recurring revenue streams are providing something of value to your customers, that increases the quality of your business systems.
Your customers are your business, and how you treat them is a direct reflection of the type of business you want to run. Whatever method you use, focus on giving customers better service and support through your recurring revenue stream than you can without it.
Recurring Revenue Comes Down To Customer Service
A happy customer is a repeat customer.
For every customer and every need they have, you are presented an opportunity to create recurring revenue through filling that need. While some recurring revenue streams are done through contracts, monthly billing and other modern reminder systems, all recurring revenue streams are based on building relationships with your customers.
Remember, the goal is to help your customers and provide awesome service, not just find a way to increase your income and get regular paydays. (But that's a nice bonus!)
Whether you use one of these 7 revenue streams or come up with your own, leave a comment here letting us know how it worked.
We look forward to hearing how recurring revenue is working to increase your business and also to hear any further questions you may have!