Recurring revenue creates business stability through renewable products and services.
Do you know why memberships, subscription boxes, and automatic renewals are so popular? Because people love to be a part of something and to receive new things regularly.
And where there is predictable RR the business owner can relax a little bit because a certain amount of money will be flowing in each month without their having to make any more sales. This is also the reason payment plans are so popular for entrepreneurs as well. Yes, there is a risk someone won’t meet their obligation, but most of the time people do. As a result, recurring revenue streams can be a great way to grow your business and have “guaranteed” income each month and I recommend having at least one offer to many of my clients.
How to Set Up Your Recurring Revenue:
1. Create an offer that people want every month.
Many people join memberships and subscriptions because the offer has something new each cycle. I belong to a few memberships where each month has new trainings that I love. There may be a members-only masterclass, new members-only bonus, some accountability, or other “new” perk that keeps the subscription fresh.
If you don’t already have something that would support a regular renewal, create one. Start with the outcome. What is the client going to receive with this offer? Sales support? A Product box? A new course or masterclass? Why would they choose to work with you each month, what are you giving them?
2. For subscriptions, use membership software to minimize your tasks.
There are a lot of different kinds of membership software available that will automatically “renew” your members each month and keep your client’s payment information secure. I don’t recommend manually invoicing or running cards for small payments in a membership. It is labor-intensive and there is a risk of making a mistake, double charging, invoices not being sent, etc.
Invest in a membership portal or software to automate the billing tasks. I have personally used a single purchase of Memberpress for my WordPress website linked to PayPal for my monthly recurring membership for non-traditional law students. I know that there are other platforms and software products available for you to explore.
A note on payment plans.
You can still have recurring revenue with payment plans for your products and services. You can decide how many payments you want to receive for each offer. I don’t recommend stretching the payments too far out past the end of your program or service. And I always recommend adding to the monthly payment enough to cover your additional fees and to reduce the risk of someone not paying.
For example, I have an offer that is $697.00. I have a plan for two payments at $365, or $730, and three payments at $250.00, or $750. The little bit extra in each payment offsets both the increased interchange fees and the risks that someone won’t make all of the payments. Payment plans can be a great way to have a regular income for a few months on a single sale.