Recurring income streams – and how to start
You wouldn’t put all your eggs in the one basket, so you shouldn’t put all your income in one basket. Having various income streams helps share the load and reduce the risk and ultimately should help you reach your financial goals easier.
Adding recurring income streams (and yes I mean multiple) can provide a predictable, ongoing source of cash flow which will improve the accuracy of your projections, increase profits, and provide a buffer for any unexpected sales dips.
Here are four simple ways to start earning recurring income for your small business.
1. Subscription Model
The most tried and true recurring income model? The subscription that automatically rolls over each month/each year unless cancelled.
Think newspapers, magazines, Netflix, and those delightful subscription boxes that arrive each month featuring food items, craft kits, cosmetics, specialty teas, books, or clothing. Some B2B examples are cloud based accounting software, document storage, anti-virus protection, and web hosting.
Customers depend on their evergreen subscription services because they make their lives easier or more pleasant. As long as they feel they’re getting value for their money, your customers won’t give the small monthly fee charged to their credit card a second thought. But the key is exactly that, you still have to provide value for money.
Tips for getting started: Talk to your customers about the kinds of products and services they’d be happy to pay for on a monthly basis.
2. Membership Model
If you’re an expert in your field, a membership site can provide a lucrative opportunity to serve more clients on the web—and earn more income.
In addition to paid, password protected content, your membership site can offer your clients an online community portal, where they can socialize and connect with you for group mentoring outside your office hours.
Ideal for location-independent minded entrepreneurs, coaches and consultants, a membership site allows the freedom to serve clients all over the world.
Tips for getting started: What member-only access content can you start creating now that has value to your customers?
3. Affiliate subscriptions
Unlike set monthly subscriptions, being an affiliate may offer a less predictable income stream, but, nonetheless, an opportunity to earn some passive income.
With the affiliate model, brand ambassadors are paid a set fee or percentage of each total sale for each successful referral. If you’ve built credibility and trust in your brand, some of your customers will likely be willing to pay for the products and services you recommend.
Tips for getting started: Make a list of the businesses that you (or your customers) regularly buy from and ask them if they have an affiliate program.
“The benefits of multiple income streams – is that you can earn money without investing ongoing time. Think online courses, ebooks, training programs. You invest the time initially, but sell, sell, sell again and again.”
The other reason we love recurring income streams is it gives you a backup plan. You have your “normal” services on offer but if a client decides they don’t want to buy that service, what is your fall back? Your fallback should be one of your other income streams. You should never send them away without multiple options and multiple choice to buy from you.