Thinking of Recurring Revenue Model

Wealthy Education
A free video tutorial from Wealthy Education
Millionaire Investor | Investing Strategies That Work!
4.3 instructor rating • 56 courses • 154,355 students

Lecture description

Introduction to the recurring revenue model and explanation to why you should adopt the recurring revenue model for your business. Important lesson!

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English [Auto] After thinking about your business idea you should find a business model that will stick with your idea. You should think of a model that will be most suitable for your business. There are many different business models out there. But in this course I'd like to introduce to you and I highly recommend you taking a look at the recurring revenue business model. So what is recurring revenue in very simple terms recurring revenue means predictable revenue or in other words recurring revenue is a revenue that is highly predictable. Let me give you some examples so you can understand clearly what is defined as recurring revenue. For example one kind of business which has been adopting the recurring revenue model for a very long time and I think you're familiar with is your utility providers such as your internet provider your electricity and water providers your telephone service provider and so on the revenues that those businesses have been making are recurring revenues. Do you know why. That's because when you use their service you have to pay for it periodically. You have to pay those businesses every single month to keep using their services. You have to pay the same to them every month so they can predict the revenues that they would potentially earn from you. There are many types of recurring revenue that you can consider adopting with your business. For example a subscription model you can see this type of recurring revenue from some magazine and newspaper publishers in order to read those newspapers or magazines you have to buy a subscription from the publishers. And when your subscription expires you have to renew your subscription. So the renewal payment will be the recurring revenue to the publishers and those revenues are predictable because the publishers know how much you would potentially pay them in your next payment period. Membership is also a kind of recurring revenue. For example you offer a membership to your customers. So the amount that they pay annually to maintain their membership is the recurring revenue. Now you understand what recurring revenue is. So the question is Why should you adopt the recurring revenue model for your business. And I bet that's what you care about. I prefer the recurring revenue model because it has a significant benefit of being highly predictable over time. And another benefit is that the recurring revenue model is able to stick the customers closely with your business. For example when buying your products or services that customers have to stick themselves with your business if they want to keep using your products or services. So assume that some day you don't have any new customers. You're still making money from your existing customers. That's awesome right. I love focusing on making recurring revenues simply because have you noticed that making recurring revenues is somehow similar to making passive income. You only need to do it one time but you can earn many many times. Once the customers love your products they'll stick closely with your business. In this case you can keep making money from them.