Scaling your business with reoccurring revenue.

Show Notes

Transcript

[00:00:00] Do you ever feel like your business is a roller coaster? One minute, you’re crushing it. The next, you don’t know how you’re going to pay your bills. This is a common problem with many small businesses and one of the best ways to add predictability and cashflow into your business is by incorporating reoccurring revenue into your business model.

[00:00:19] And I know you might be thinking to yourself, well, Brad, there’s no way I can implement reoccurring revenue into my. Well, you’re going to want to keep listening, because in this episode, we’re talking about how you can scale your business with reoccurring revenue.

[00:00:37] Welcome to the Liquis Digital Marketing Podcast, where each week we’ll be breaking down complex marketing topics into bite sized steps. You can take now to grow a profitable. For your business, we’ll discuss organic reach, offer optimization, paid advertising, email marketing, content creation, promotion techniques, and so much more.

[00:00:56] I’m your host, Brad Ball, founder of Liquis Digital Marketing Agency. Hundreds of clients of every shape and size reach their business goals since 2008. Thanks for joining us today and be sure to subscribe because you won’t want to miss a beat. Now let’s grow.

[00:01:15] hello, and welcome back to another episode of the liquid digital marketing podcast. In today’s episode, we are talking about adding reoccurring revenue into your. All right. So what is reoccurring revenue also known as M R our monthly reoccurring revenue. There’s also a, our, our annual reoccurring revenue.

[00:01:35] So it’s very simple, really, right. So. When someone pays you on a reoccurring schedule for a service or a product or access to some thing. Right. So we see it all over the place and we’ll get into that. And we’re going to get into how you can implement that into your business and some ideas. Of how you can do that.

[00:01:58] So stay tuned, but basically adding reoccurring revenue, it’s going to add stability. It’s going to add predictability and it’s going to add cashflow. So let me share a story. So when we started our business, we did all project based work. So someone would come to us for, let’s say a website and it was a project we do 50% upfront, 50% at the end project finished.

[00:02:20] And now we’re looking for the next project. Sometimes we had a lot of projects. Sometimes we had no projects. So we were constantly just on this rollercoaster of things are good things or bad things or good things are bad. And that is a case with so many small businesses. When you can add in some type of a subscription or a membership or some thing where people will pay you on a monthly reoccurring schedule automatically.

[00:02:50] Then you start to add in this baseline of cash, that’s coming into your business where you don’t have to constantly go look for the projects. So for us, when we started, all of our projects were these web design projects. Once they were done, they were done. Now we’re off looking for another one and then we got smart and we started adding in service.

[00:03:15] That had a natural reoccurring revenue type of subscription-based service, such as posting. So people would pay us a monthly fee to host their website. That’s a no brainer if you’re building websites. All right. So once we got that going then we took it up another level and we added another service of just maintenance.

[00:03:36] Not just do we host, but now you can also have maintenance on your website. So that’s a, another, the opportunity to implement a reoccurring revenue into your. So things are going well. Right? So now all of a sudden we’re starting to like get enough money into every month that covers our expenses. So any products we come in is just, you know, it’s all above our expenses.

[00:04:00] So that’s the beauty of adding that in. And then now we’ve taken it even a step further and added even a higher ticket item. And that is our marketing services. So now we’re doing marketing and people pay us on a monthly basis to do more. For them. Right? So that is our story. Now that we’ve done this, what used to be our main profit margin?

[00:04:22] Our main source of profit website projects is now just icing on the cake. Right? So if we get a website project in that’s just above and beyond, you know, our expenses and that is what M R R is recurring revenue super important to get into your business. But. How do you get it into your business? So basically in order to have a reoccurring subscription or membership, you basically need to be giving something of value over time.

[00:04:57] Here’s a bad example of trying to create something that would have a recurrent revenue. Okay. I have a. So you buy the course, you take the course and the course is just a static course. You learn something once you go through it, it’s done. You’re good. Well, there’s no really opportunity there to create a reoccurring subscription model.

[00:05:17] What might work is, let’s say you have a course that maybe changes over time, or you’re adding new content, or maybe it’s a bulk of courses that you’re constantly feeding information to, or maybe the course comes with. Access to a special group or continued education or access to you or something in that regard.

[00:05:41] Right? So what the big kicker is you have to have something that continuously gives them value on a repetitive schedule. So maybe it’s a product. Well, that’s easy because if you can have a subscription-based for your product, then they’re getting something tangible. If it’s a service, you know, what is that service?

[00:05:59] What is the value add that they’re getting. So let’s take a look at some examples out there. And honestly, it’s hard to find where these examples don’t exist. There is one industry that I have really, I haven’t really found much on the reoccurring revenue and that’s like your typical real estate industry.

[00:06:19] Right. As a real estate agent, what would you be able to do for recurring revenue? And I haven’t found one yet. So if you have an idea, I would love to hear it, but maybe there’s like a, a tangent utility that you could have people subscribe to. I don’t know, but let’s look at some common ones. Okay. So the, probably the most common that you think is Netflix.

[00:06:41] Hulu, all of those guys. And funny enough, they’re all going to that subscription model where you pay them a monthly fee to have access to what they offer Disney plus, whatever it is. Right? So you pay a subscription versus. Blockbuster where you had to go in and rent your movie and pay a one-time fee. And now you’re gone.

[00:07:02] So, you know, there, you have it, like, there’s a, a great example. Another one is Fabletics right? So basically this is like workout gear, where you pay a subscription and every month they send you. And I’ll be honest. I have not subscribed to Fabletics. I don’t know the exact details, but basically they send you clothes and you keep them and wear them, or you send them back or whatever.

[00:07:26] You just have a subscription where you’re constantly getting a feed of workout clothes, which is genius. Because if you are working out often, then you go through workout clothes because they start to get a little stinky. So it makes sense. And it works. Okay, I’m going to take you back in time for this one.

[00:07:43] Do you remember? And this might be for the older generation that is listening the Columbia house, or maybe you’ve watched an episode of Goldberg. Cause I just recently watched where they have this, where you subscribe to Columbia house and they send you. So many like CDs or tapes cause that tapes, and it was basically a mail order subscription.

[00:08:05] And they’d get you in by, you would get, like, I forget what it was by like 15 cassette tapes for a penny. And then the next month, all of a sudden now you’re like paying them, right. Or they’re sending you stuff and you’re like, oh wait, now I owe you all of this money. Anyway, that’s the old school.

[00:08:21] Subscription. So this has been around for ever. Okay. Another example is the dollar shave club. So here is a tangible product that you use and you go through. So I don’t know if it’s an actually it’s a dollar or if it’s $5 of what it is, but you are going to pay them a low fee monthly to have a constant flow of a consumable item.

[00:08:41] They have the same thing with, uh, feminine hygiene products, which I don’t know much about that one, but I know that it does exist and a woman can subscribe to this and get their hygiene products without having to go buy them. They just have a subscription. Another great example is a look at any app you use.

[00:09:01] Almost any app, whether it’s a web based app or whether it’s an app that you installed on your phone, almost all of them have some free version. And then there’s the extra tier or you pay a monthly fee to have the full version. And basically it’s a SAS, a software as a service as a SAS product. It’s, you’re using their app, you’re using their service and that’s basically a reoccurring revenue model.

[00:09:28] So what about us guys that don’t have an app? What about the service based industry? You know, painters, roofers, plumbers, like what are they going to do? How do you implement that? And that is tricky. I’m not going to lie. That’s a tricky one, you know, but if you’re like a coach. There’s a ton of different ways.

[00:09:47] So let’s kind of go into some different ideas on how you can implement this into your business. All right. So one way is just to membership ties. That’s a new word. I think your product. So let’s say you sell a face cream. Well, maybe just kind of like the dollar shave club where you have a subscription where they can buy the product or they can sign up to pay a different amount.

[00:10:12] And they will just get a monthly supply every month used to send it to him. And every month you just automatically build them. So if you’re a product, maybe you sell coffee or maybe you sell ads works really, really well with consumable products, candles, soaps, tea, whatever. If it’s consumable super easy to.

[00:10:32] Now, well, let’s talk about, maybe you don’t have that product. What have you just have a service? So sometimes it’s repackaging your services in a different way to where they’re getting value over time. So here’s an example. I’m going to use us as an example. So. Websites typically. And what we do typically still is it’s a project-based thing, right?

[00:10:54] So they, they come in and there’s the project. Here’s the project price, 50% up front, 50% at the end, blah, blah, blah, blah. And that’s the project. There’s no reoccurring, but let’s say we needed to create this into a reoccurring situation. Well, what we could do and what some others do is maybe there is a setup.

[00:11:14] And then from there it’s just a monthly fee, a lower monthly fee. So let’s say it’s a hundred dollars a month or $200 a month and you have your website and we maintain it and we host it and it’s just on our server and we make sure that everything’s good. You have access to it. And you just, instead of paying us a larger amount up front for the whole thing and us just handing it off to you.

[00:11:36] We’re actually hosting it and maintaining it for a monthly fee. That is, as long as you want your website, you end up, you keep paying. So that is how you can change your services to be monthly. So maybe it’s just re kind of packaging, how you offer your service. Another thing to think about is maybe you don’t have that.

[00:11:56] Maybe you just need to create a new product or a new service. Maybe there’s some tangent thing that you can provide. That is an added value to what you’re already providing. For example, as we were building websites, well, a obvious tangent to that is hosting websites, maintaining websites. That is another way to look at your product and services and see if maybe you just need to create some new ones and see what you can do in that way.

[00:12:26] Okay, let’s talk about even creating a group format. So maybe you’re a coach, there’s a ton of voice to do it. If you’re a coach, you know, obviously with your services with products and I mean, there’s a ton of different things you can do, but what if it’s just a group forum? So now what you’re able to do is you’re creating a different price point for people to sign up for a group where they pay a monthly fee to be a part of this group.

[00:12:52] And it’s more of a group format where you can help a larger amount of people at one time for a reoccurring monthly fee, let’s say your a photographer. So, you know, you got a wedding gig, you got, okay, this business needs a photo shoot. This family wants, you know, some wedding pictures done this new business person needs, you got these gigs projects, right.

[00:13:15] That come up and then you don’t have any for a while. You gotta mark it. You’re always looking for the next. Well, what if you created a subscription where every month you go and set up at a location and people pay you on a monthly basis to be able to come to you once a month, or maybe it’s multiple times a month.

[00:13:39] I don’t know. Let’s just say once a month and they get so many shots. And you have maybe said some different scenes set up. So the beauty of this is you don’t have to go find gigs, gigs, come find you. You’re able to get more than just one person through in a setting. You don’t have to travel and set up and worry about the scene.

[00:14:02] You’re picking it. You’re setting it up. People are coming to you. So let’s say you have 10 subscriptions. Now you have 10 people coming in. That day to get their pictures taken, they get, you know, five to 10, you know, shots that you will be able to give them for them to use in their marketing for that next month.

[00:14:18] So now they come back to you next month because Hey, they need some fresh ones. Right. So if you’re they only have like five to 10, well, that’s, you know, one to two pictures up to post every week. Okay, well, now next month they need some fresh pictures. So you’re at a fresh location and now they’re just have a constant stream of getting those professional photos and they don’t have to try to book and schedule.

[00:14:42] They just know you’re going to be here. They’ve already paid for it. They know what to expect. They walk in, they get their pictures done. They’re out. The next person’s in. It saves you time and saves them time and they get what they want. You get what you want, and you’re creating a financial baseline and your business.

[00:15:00] So that is an out of the box idea for a photographer now. I mean, that just, there’s so many different ways to kind of spin stuff like that. So think about your business and your industry. How can you create a service? That’s a new service, what are people’s needs? How can you give value to people? How can you solve people’s needs and make it to be subscription-based or membership?

[00:15:26] Okay, so let’s say pest control, right? So for pest control, maybe it’s you come out and you do, you know, one setting where you do a big pest control session, and then they have a monthly fee where they pay in every month you come out and you just do a, you know, uh, title. Right. Or maybe it’s not every month.

[00:15:48] Maybe it’s a quarterly thing. I don’t know. Maybe it’s an annual thing. I don’t know. Same with your AC and heater stuff. So, you know, maybe this one, isn’t a monthly thing, but maybe what it is is an annual or, uh, you know, twice a year or maybe every quarter where it’s just a maintenance, right. It’s coming in.

[00:16:06] We’re gonna like, you know, recharge everything. We’re going to make everything, make sure everything’s looking good. And it’s a low monthly fee, you know? And then it saves them money in the long run and it creates cashflow and predictability in your business pools. I mean, that one is set up for reoccurring revenue.

[00:16:24] If they’re not, that’s already the thing, the lawn care already, the thing, you know, housekeeping already, the thing. Roofing that gets a little bit more challenging. Right? You only need a roofer once in your life. Hopefully, maybe twice. I don’t know. You don’t need roofers a lot. So that’s a challenging one real estate agents.

[00:16:42] That’s a challenging one. So I get it. There’s there can be some hard. Hard ways to make recurring revenue in some industries, but thinking outside the box, maybe there is some other utility that people can use and subscribe to, or have access to in order to create that. All right. So that is recurring revenue.

[00:17:03] Honestly, implementing this into your business is going to be game changing. And even if you just start small and just start building on it, and next thing you know, by the end of the year, You’re going to start having a bulk of these people that have signed up and are using you. And all of a sudden, you’re going to be able to breathe a little bit better in your business.

[00:17:22] I really want to challenge you to come up with some ways and how you can add recurring revenue into your business. And look, if you are having a hard time coming up with some ideas, hit me up. Leave me a comment, whether you’re watching this on YouTube, whether you’re hearing this on the podcast, leave me a comment, shoot me a message.

[00:17:40] And I’ll help you come up with an idea. And until next time, have a great day. Thanks for listening in today. I hope you enjoyed the show and Hey, if you did, please take a second to leave a review and share this episode with someone who you think might also benefit from it. I appreciate you so much. And as always, we’re here to help.

[00:17:57] If you have any questions about this episode, or want to talk strategy with us about your own project, just shoot us an email to info at liquids, digital.com and we’ll catch you in the next episode.