The recurring income business model

Here’s the recurring income business model to add to the prostitute/billable hours business model and the project based model.

The recurring income model. It’s my hero.


Since writing this article, I’ve gone much deeper into the world of recurring income. You’ll find much more information on this business model, recurring productised services, memberships and tons more over at  Adventures in Products.

Adventures in Products

What do I mean by recurring income business model?

One of the things that I look for with my business coaching clients is to find a way they can charge the same clients a regular fee for ongoing work.

In business, cashflow is king. It rules your entire life like some feudal lord with control over his serfs.

I want my clients to rule their own lives and not have to worry about cashflow, so I’m always looking for a way that they can make sure that they’ve got regular money coming in.

That’s where the recurring income business model comes in.

You might offer packages of work rather than one-off projects. Or it might be the retainer model, where your client agrees to pay a regular fee to access a certain number of hours of your time or a bundle of services each month.

Alternatively, you offer a discount to the client if they book so many sessions over a full year, something like a “buy 12, get two free” offer.

Why would I give them a discount?

You’ll read elsewhere on the blog that I don’t approve of giving discounts. I see giving discounts as lazy marketing or what people do when they’re not so confident about what they’re offering.

But, one time that it is good to give a discount is to bring in regular recurring work.

It’s better to have regular work, and therefore monthly recurring revenue, than to maximise the amount of your billing. Your business will be more healthy if you know that you’ve got 5K coming in on a monthly recurring basis. That’s better for you than getting 65k in February and then nothing for the rest of the year.

That recurring income helps you plan and invest in the business, and it boosts your confidence.

Some examples of recurring income model businesses

90% of my business coaching work is on a recurring income model, and I’ve set this up on purpose because it makes me feel much more confident and healthy. Clients pay me a monthly fee, and they get a productised service. Some clients just come along to meetings, and I never hear from them in between. Others phone and email me a couple of times a week or sometimes more.

Overall, this tends to even out, and I know after 20+ years of being a business coach, the average number of hours I spend supporting clients.

Jon and Roy at Spike Insight have done a fabulous job of this with a combination of recurring, subscription based data products.

How the recurring income business model works for other businesses

A car mechanic might want to increase her monthly recurring revenue by offering quarterly tune-ups and servicing.

recurring income business model

Most people only get their car sorted out if there is either a problem or if the MOT is due. Most mechanics are missing a trick by not offering a quarterly or annual service to keep the car in tip-top shape.

The regular checkup would be better for the owners because any niggling little problems would be dealt with before they became big problems or potentially dangerous, plus the car would be running at its maximum potential.

Our mechanic might even include an upsell on the deal of a cleaning or valet service at the same time as the tuneup.

Recurring income business model for lawyers

Most lawyers are only called in when there’s a problem or a significant change.

Again, I think they’re missing a trick. A good lawyer would forge a great relationship with her clients by having a monthly or quarterly meeting. Or maybe become a board adviser or non-executive director (NED) She could offer a legal perspective on the challenges their business faces. And she would be in a great position to sell in her one-off services of negotiating or checking contracts as they went along.

If I were a legal firm, I’d offer this at much less than my standard hourly rate to establish an ongoing relationship with my clients. The fee for the regular meetings would also give my firm some great recurring income.

What about the copywriters?

recurring income business model

Copywriters are usually called in when somebody is re-writing their website or they have a new brochure to write.  When you have a new client, you have the opportunity to suggest that as well as the new website; your clients will need content written every month. Plus, someone to check the site and make sure that it’s all up to date and working correctly.

I’ve noticed that creatives, like copywriters and web designers, are less likely to build recurring revenue streams like this. This is crazy – wouldn’t it be much more fun to be a copywriter who does regular work for the same client? And wouldn’t you be able to add much more value to your client’s business by keeping their tone of voice or brand on track or making sure they are making the most of their website?

Don’t be tempted to walk away at the end of a project and start hunting for the next one. By thinking more in terms of your company using the recurring income business model, you can provide a better service to your clients, increase cash flow, and have predictable revenue.

What’s not to like?

And the bookkeepers?

recurring income business model

If you run a bookkeeping business, you probably already have monthly recurring revenue because your clients need you every month. But maybe they also need something beyond just keeping their books up to date. Maybe they need a monthly report on the health of their business or the state of their investments.

Providing the monthly written report could be a very nice extra source of recurring income. And it sets you apart from other bookkeepers.  A simple upsell like this could be your Purple Cow differentiator, which gives you more clients than you can ever need.

How can your business change to the recurring income business model?

I think you get the idea – you need to transform your business if you’re not already getting regular fees from clients. And you might need some help to do just that.

The next step for thinking through how to develop recurring income is to start thinking in terms of productised services.

Read more about productised services






Photo credit – Complementary Camels by Pascal, Jaguar by Pedro Riberio Simoes, Corrections by Quinn Dobrowski, Bookkeepers from Barefoot College, and Julia Chanteray with client by Vervate.

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The Joy of Business
Sweetspot Pricing
Julia Chanteray