Look at recurring revenue
This article first appeared on June 8, 2011.
It’s strange, but one of the topics that my staff most like to discuss with me is what will happen when I am no longer in charge of Taskmaster Enterprises.
I used to think that they were worried that the business couldn’t survive without me, but after seeing how excited they get when they speak of my departure, I realise they’re probably thinking differently.
Whatever. I always give the same answer to the question of what will sustain TM Enterprises after I am gone – recurring revenue.
One of the worst things that can happen is that your customers become one-offs. They buy, they’re gone.
What you want is a situation where customers become rusted onto your business and provide revenue throughout the year.
For services businesses, this means establishing long-term contracts with clients or getting them to engage you on a retainer. Either one of these arrangements will ensure money is coming in every month, not just once a year.
For product businesses, it can be tougher. But recurring revenue is still possible to create. For example, you could sell a maintenance or servicing contact alongside your core product. Or design your product such that customers pay for regular updates.
Think outside the square and shore up your future.
Get it done – today!