5 min read
3 steps to achieve recurring revenue in any business
Does the amount of revenue coming into your company fluctuate each month?
It can be difficult to plan and prepare for future expenses if you are unable to predict how much cash you will have in hand each pay cycle. This is why having recurring revenue strategies is a vital consideration for any business. The ability to build up an ongoing and dependable source of income can give your organisation the capability to structure future growth and achieve business objectives. However, many financial stakeholders will agree this is generally easier said than done. For some companies, it may not seem obvious how recurring revenue models can be incorporated into the overall structure. Fortunately, it doesn’t need to be difficult to implement a strategy that can encourage customers to make regular payments. In fact, there are many different recurring revenue models that can be modified to suit almost any business. To help get your started, here are three key steps you can take to understand and implement the potential of a recurring revenue stream in your company.
Identify the opportunities
Many business owners assume that sustainable and recurring income needs a particular channel or platform through which to enter their business. Whether it’s a sunk-money subscription or a locked-in, long-term contract, the ability to keep customers on your books for months or even years is immediately achievable for some companies. However, it’s not just contract and subscription-based businesses that can benefit from recurring revenue. In fact, almost any organisation could implement one of the potential models that draws in reliable income each month. For instance, a company that sells services on-demand could consider asking customers to invest in an automatically renewing retainer subscription – giving them priority access to maintenance, upgrades and services related to the purchases they have already made.
Invest in the right model
When you have made a choice to implement a recurring revenue model, it helps to have the right structures and software in place to support this initiative. For instance, direct debit is ideal for a recurring revenue stream, as it gives customers the ability to set up automatic payments and continue paying for your services with no further effort. This makes it incredibly easy to establish an ongoing relationship with your hard-won customers, and is also known to increase loyalty in many businesses. There are many potential benefits of a paperless direct debit solution, with a channel through which you can support recurring revenue being just one of the most significant.