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Make Your Company Worth More By Adopting This One Strategy

 In Business Development

Creating a business to thrive without you at the reigns should be a top priority when you’re building a company. Finding a way to bring in recurring revenue can take your company to places you never thought was fathomable. I’ve put some major thought into this area over the past couple of months.

At our company we offer many digital services. My one challenge is to create an avenue within those services to build a steady and growing revenue stream. We are currently doing this by monthly retainer fees on web projects, hosting fees and apps for sale among others. We’re not where we need to be yet but we will get there by innovating the ways of the company cash flow.

It’s not just tech companies benefiting from this but with today’s off-the-shelf digital offerings many companies are raking in the dough.


What are some ways to create a revenue stream for your company?


  • Long Term Contracts With Monthly Fees. This particular method can turn those one time sales into a a nice revenue stream by offering an optional AND renewable contract when one expires. You should even go as far as penalizing the client if they cancel or even reward them for renewing. If its a high priced item then offer financing – this allows you to add some extra fees to the total price as well.
  • Subscription services/ products (with auto billing). When you have monthly, quarterly or yearly payments being made automatically, your recurring revenue thrives. Make people commit and pay on a regular basis only allowing them to cancel if they call a toll free number or select to do so online. Dating sites have thrived due to this model. Members join three months at a time and often forget to cancel after the first three months and they are charged again and again.
  • Repeat Customers. Duh, if you are offering something great then people will refer you or keep coming back themselves. Offer rewards as incentive somthey have another reason to keep coming back.
  • Offer a variety of products/ services. This is my back door sneak attack. When you offer a variety of top notch services then you can package them in a way that keeps the customer progressing and growing. We did a project for my professor in grad school. We developed a nice new website and blog for her and her consulting services, then sold the fact that we should do monthly search engine optimization, then sold her on publishing her books into a digital format for tablets … and then we got her to buy into a web marketing campaign to increase sales on her books. So you see how we moved from the foundation of website to marketing everything he had to offer. We went from a $3,500 project to almost $18k in total thanks to the variety we offered. She also pays 200$ a month in hosting fees.
  • Sequential Products. This is a hot commodity nowadays with software. I think Adobe has this one down pat. Every two years or so they come out with a whole new family of programs that compliment current technology standards. Customers are almost forced to shell out the extra money to upgrade their software. This model follows a predictable sequence along with additional new specs for the buyer to keep interest levels and interaction high.


So, what are the major advantages of the recurring revenue model?


  1. It would allow you to go public a lot easier. This is one thing shareholders would want to see – a healthy revenue stream that can bolster growth in the short term.
  2. It helps build brand loyalty. It gives you a reason to reach out to customers more frequently. Companies with recurring revenue models also gather data that tracks consumer trends on a much more precise level, which helps you innovate pricing and packaging per say.
  3. Built to scale. As you expand your customer base you can easily forecast what directions you are moving (or can move in) as well as what else will work in conjunction with your product(s).

The one question I would like to leave open for you is: How do you sustain the recurring revenue once you establish it? Share your thoughts below.

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