Recurring revenue is a popular and sustainable form of income. In this article, we will explore the definition of recurring revenue, how to create a recurring revenue stream, and the different types of recurring income.
Creating a Sustainable Income Stream with Recurring Revenue Models
Recurring revenue models are the most profitable and sustainable type of business model. They provide a steady stream of income which can help to grow the business.
There are many ways to create a recurring revenue model and each one has its own advantages and disadvantages.
One way is to provide paid-for services in exchange for a monthly fee, such as Netflix or Spotify.
Another way is to offer products on an ongoing basis, such as Amazon Prime or Apple Music.
Networking as a service is another form of recurring revenue business model in which a company provides networking products and services to its customers on an ongoing basis. The primary industries that typically use this model are IT, technology, computer and telecoms.
A recurring revenue model requires a level of commitment from the customer in order for the business to continue to grow. If a customer does not buy your service and other services, the business will suffer.
The most sustainable of these models is a monthly subscription that gives access to an array of products or services. In this model, customers pay more than one time in order to receive a set of defined benefits.
Recurring income model examples
A recurring income plan is a business model that generates a consistent, predictable and reliable cash flow. The most popular recurring income plan is the subscription-based model where customers pay a monthly fee in exchange for access to the product or service.
With this type of business model, it’s possible to generate a high monthly income with minimal upfront investment.
You can start with as little as $1,000 and create an online course or membership site that provides value to your target market.
Examples of recurring income plans:
- Short-term coaching: $10 per month for 1 hour of coaching.
- Online course: $29-$89 per month (depending on length) with a 60 day money back guarantee.
- Membership site: Monthly pay as low as $1 to access content, courses or tools.
- Subscription software: Subscriptions start at $0.89 per month and charge $14.99 for upgrades.
Although $1 per month may not sound much, multiply that by thousands or even hundreds of thousands of customers and you have a very healthy and sustainable recurring monthly income.
Each of these models has different pros and cons, so choose the one that will provide you the best return on investment for your budget.