If you’re reading this, then you understand that the world is changing. And that you can be an agent of this change. That you can create a service that other people find helpful in their daily lives. And beyond sharing your gifts and expertise to the world, you realize that you can use these gifts to earn an income beyond what they have ever thought possible.
You’ve come to the right place.
Congratulations on arriving on this page thus far! Starting a recurring revenue business is a way to do just that.
We have prepared a series of articles for entrepreneurs wanting to start a recurring revenue business. We want to help entrepreneurs and business owners transform their ideas into reality to build a sustainable business that provides recurring revenue for themselves and their families.
In this series, you will learn how to:
You may have heard that the recurring revenue business is the key to scaling your business and earning a passive income. It’s the Holy Grail of businesses that promises a one time set up and your business is up and running. It’s mostly digital products that require no significant investment, no inventory, and almost instant income.
But the droves of hopeful entrepreneurs and creators who came in and suddenly left did not realize that setting up this business is not as easy as 1-2-3. This is not a magic business. It’s not something you set up and leave to grow on its own. It requires passion, commitment, and technical know-how. And yes, it needs work to work.
Working alone, though, does not guarantee success. You may end up falling into the pits of marketing, the setup, the technical boo-boos. And frankly, the constant stress of getting new subscribers and keeping existing ones from canceling might get anyone down if you don’t have a plan in place.
Luckily for you, we have already set up a guide; this way, you won’t be alone in this process. We have been in the recurring revenue business since 20xx and has helped hundreds of companies recover $130 Million in revenue.
According to Investopedia, recurring revenue is the portion of a company's revenue expected to continue in the future. These revenues are predictable, stable, and counted on to occur at regular intervals going forward with a relatively high degree of certainty.
While one-off sales are great, and many companies have succeeded in this type of business, it is unsustainable. It puts your business at significant financial risk because you need new customers consistently. With recurring revenue, all you need to do to get another sale is to retain that customer, which is much easier and less costly than acquiring a new one.
Recurring revenue is what you get when you launch a SAAS or subscription service where your clients pay to access your content or service continuously. This business model generates an income that can bring business owners peace of mind because it brings consistent and reliable earnings monthly.
While the topmost benefit for the recurring revenue model is the consistency of income, it has other positive outcomes that contribute to any business’s stability.
You have an existing client base, and you are more or less sure of getting a consistent income. This means you can focus on creating new products, upping your customer service, or perfecting your marketing skills. You don’t have to worry about getting new clients every day to keep your momentum going.
Imagine this, at any given time during the week, your client drops by your website to use your service. They see you and recognizes your ability to help them with their needs. And if you play this right with proper retention techniques, they’d see you as a brand whose always there to help when they need you. It doesn’t matter that they’re paying for the service; they are thankful that you’re there.
Monthly recurring revenue businesses are almost like a monthly collaboration with your clients. You work for them, and they take your service for something that they need. And if you’re as passionate about your business as making your clients happy, bringing an intense look at the data that your clients provide for free can reveal a lot. If you’re savvy enough, you will see their data -how they use your program, pain points, and preferences. Building long-term relationships require an innate understanding of your client’s wants and needs, and making these services available in a way that your competitors won’t or can’t is a great help in making sure they stay with you for a long time.
Are you convinced yet? We believe that these three outcomes are more than the continuing revenue model. This makes a business that keeps on giving with the personal satisfaction of a stable and consistent revenue.
So you’re all aboard. What’s the first step?
It might be a cliche but let’s give this a visit first. If we are to ever succeed in any journey, goal setting is perhaps the most crucial step to make. Ask yourself, what’s your goal beyond making oodles of money? No judgment there, but we want to define our purpose as something specific, measurable, achievable, relevant, and time-bound.
If that rings a bell, yes, you are right. It’s the time-honored and classic SMART Goals from Peter Drucker's Management by Objectives. If you’re not familiar with the term, “SMART” is an acronym with a focus on creating specific (and realistic) targets to hit.
Setting SMART goals helps you clarify your ideas, focus your efforts, use your time and resources productively, and increase your chances of achieving your dream. Just saying that you want to start a business is vague, and you don’t know if you’re a step ahead or behind. In this context, make goals that are quantifiable so you can measure your success. SMART goals can break down your dream into five measurable factors.
Let’s get to it!
Smart goals are clear and specific; for example, “I want to create a course that helps people be the best influencer on Linkedin so that I can start a business online and earn a passive income within the year.” Note that it answers the five W questions:
Goals should be measurable and can tell your progress. This helps you stay motivated and focused on your plan. If you’re not able to measure your goal, you might wake up one day and realize that the year has gone, and you have not even started making a recurring revenue business. For example, “Make a course outline by the second week of January, finish recording 12 videos by February and upload the course on Teachable by March so I can launch my course by April.” Measurable goals can answer the following questions:
A goal outside your capabilities, time, and options might as well be an unachievable dream. Your goal needs to be achievable and within the bounds of reality. For example, ask yourself if launching a course by April is realistic if you have a full-time job, as well as skill and technical limitations. Do you need to study and develop some new skills? Do you have enough time to record all of your videos by February? What can you do to settle these previously unexamined variables? Are there resources that you need?
Setting an achievable goal allows you to identify limitations and take steps to overcome those limitations so you can consistently take a step towards your goal. Ask yourself the following questions to check if your goal is achievable:
One of the less understood parts of the SMART goal is relevance. Is your goal relevant to you? Or more to the point, does it matter to you? Moving forward a year from now, will it still be a worthwhile endeavor for you? Also, will it be relevant to your target clients and customers? Appropriate goals can be understood by answering these questions:
A goal needs to be time-bound; else, it’s just a dream. No matter if you want to achieve your goal five months from now or five years from now, anchoring your goal to a time frame makes it achievable and workable. It ensures you have a deadline to focus on. Longer-term goals are usually unmanageable if not defined within a time frame. For example, You would need to have a website to host your courses. You plan to take this on by yourself. While you are confident about your tech skills, you would still need to study the website backend to serve your clients efficiently. How long would you need to dedicate to these short-term learning goals to manage a website necessary for your long-term goal of launching your course? Answer these questions to know if your goal is time-bound:
So getting back to our goal-setting, while there are other schools of thought regarding goal-setting, here at Gravy, we are fans of SMART goals. We believe that they are the foundation and the template for an excellent plan. Starting a Recurring Revenue Business is not for the faint-hearted, but a solid plan can make your goal a bit easier. Regardless of whether your plan is just to make oodles of money or save the world with your knowledge, specific and measured goals are the key to success.
After that, it’s a rinse and repeat process. You can either scale up or start again, this time with a template for your success.
Stay tuned for our next article!
Do you have any questions about how to set SMART goals? Let’s talk about them in the comments section below!