How To Build A Recurring Revenue Model

A recurring revenue model is one that produces consistent income streams, not just once a year but over and over again every month, week, day or even hour of each business day! That’s what makes this type of business model very attractive for entrepreneurs.

Most people are familiar with the term “SaaS” (software as a service) which means software and applications you access through the internet. This is a good example of recurring revenue because you are always paying online for it.

Another popular type of recurring revenue is an online course. You pay for the material upfront, but the provider does not go away until you do. Some courses have a free trial period too so you can see if they work for you before investing more money in them.

There are many other types of products and services that use this method of income generation. The important thing to remember about these types of businesses is that they keep coming back around repeat customer who want to re-enter their subscription or purchase version of the product.

Why is this such a powerful business model? Because you never need to worry about how you will earn your next paycheck!

You will always have new customers that spend money on your products and services, making sure that you stay well funded. This removes some of the stress that could get in the way when trying to run a startup.

Establish your company's reputation

how to build a recurring revenue model

The second way to build a recurring revenue model is by establishing yourself as an expert in your field. By creating content that people find helpful, you can generate income through advertising or sponsorship fees, or via affiliate marketing where you earn a commission for referring customers to vendors who offer what you do.

You could write about how to bake the best chocolate chip cookies, or how to take good pictures with a smartphone, or how to save money via grocery coupons – it doesn’t matter as long as it’s something people are looking to learn.

By offering your expertise, you create a valuable resource that people will pay to access. You can then turn those paid sessions into more content and lessons for them to read and absorb.

This isn't necessarily a passive income source, but it can help you shift into that territory if you're willing to go out and educate people about products and services you believe in.

Choose your service niche

how to build a recurring revenue model

Choosing a service niche is an important first step towards creating a recurring revenue model. Your service must be one that people want or need, and that you can create value for consistently.

It should also be something that you are passionate about so that you keep motivated when it’s time to work hard and earn money.

On the other hand, if you pick a product category with little demand then there will be a lot of competition which will discourage potential customers from trying out your services.

You don’t want to start your business and struggle to get clients ever! So make sure your chosen field is somewhere between being well-established and still having enough room for new entrants.

A good way to determine this is to look at the type of content and applications in the market that already exist. If there are no newer apps than what you wanted to develop, then your service has probably found its niche.

Design your service offering

how to build a recurring revenue model

The second part of building a recurring revenue model is deciding how you will offer your service or product. What kind of services do you have? What price points are there? What features must I have to be willing to pay monthly, yearly, or both?

You can either build it into the business model directly, like with a subscription website, or you can add additional products or services that fulfill what the site does. For example, if my article’s main purpose was helping people learn more about leadership, then I could also teach other courses on related topics such as organizational psychology or negotiation.

This way, even if someone only wants one of those two things, I still get paid because I already have them through my writing! It’s an endless stream of income.

Write your marketing plan

how to build a recurring revenue model

The second way to build a recurring revenue model is to offer products or services that people want, so they keep coming back. Product marketers all have their favorite tools for reaching out to new audiences, keeping them engaged, and encouraging repeat purchases.

That’s exactly what you need to do as an online marketer! Finding ways to make money online isn’t a one-and-done activity; there will be repeated purchases in the form of monthly subscriptions, annual memberships, and even daily paid activities like listening to an audiobook while you get yourself ready for work.

You can start by picking a niche and offering solutions within that space. Or you could choose to focus on helping others in related spaces find more success. Either way, your goal is to create useful resources that people are willing to pay for.

Distribute your product through advertising

Advertisements are one of the most important components in having a successful business with RBMs. This is not only because they are cost-effective, but also because they work!

Many entrepreneurs start their businesses with the intention of creating a service that they can sell for money. They begin by offering their services to other people, but then struggle to gain new clients due to lack of marketing exposure.

That’s where advertising comes into play. By distributing information about your business via online and offline channels, you will be giving it more visibility which helps it to find customers.

The key thing to remember when investing in advertisements is to test different mediums and budgets to see what works for your business.

What I like to call ‘low investment ads’ are some of the best types of advertisement you can do to promote your business. Examples include displaying your logo on logos sites or supporting websites, using social media to advertise, or even taking out full page advertisements in magazines or newspapers.

These can all easily be done without too much expense, which is why I recommend them as good starting points if you don’t have much budget at first.

Create a website and content marketing plan

how to build a recurring revenue model

Building a recurring revenue business model is very different from building a traditional income stream or startup mode of operation. It’s important to be clear about what you are offering before you offer it, and clearly state how people can access your service.

In fact, one of the most common mistakes new entrepreneurs make when trying to build their business for the first time is offering too much free material that potential customers have to find elsewhere.

By giving away so much of your product or service without asking for anything in return, you risk damaging your brand and limiting your growth. You will also likely burn out quickly as there isn’t much reward in producing quality content if you aren’t being paid for it.

The second major mistake is not having an easy way for your current clients to re-access your services. If they stop getting value from your products or services, they may go looking else where which could cost you future work.

Identify your target clients

how to build a recurring revenue model

The second part of building a recurring revenue model is identifying your target client group or audience. You will need to do some research, speak with people who are in this market, and determine if they would be willing to pay for your product or service.

You can test out your message on different groups by blogging about it and seeing what response you get!

Many small business owners start their careers as an freelancer or consultant because it is more cost effective than running their own show. It also gives them the flexibility to handle other responsibilities while still earning enough income.

The hardest thing about switching from having one source of income to multiple sources of income is learning how to manage your time.

It’s easy to earn money working long hours, but eventually you will reach a limit where you cannot work any longer due to lack of sleep or motivation. This is why it is important to set regular working times so that you don’t overextend yourself.

There are several ways to go about doing this, such as using a system like the ones mentioned below.

Conduct market research

how to build a recurring revenue model

The second key factor in building a recurring revenue model is conducting efficient market research to determine which products and services you should offer your clients. Your customers will keep coming back if they believe that you have everything they want or need, so make sure that you are always looking into new things to provide them with value.

It’s impossible to know what services and products are missing from the marketplace unless you actively look for them. By being aware of the issues others face and creating solutions for those problems, you’ll find yourself with more opportunities than ever before.

By offering related services or additional features as part of your primary service, you can create lite versions of some of the most popular full-service models. This creates extra income while also strengthening your brand by giving your audience less reasons to go outside of your ecosystem.

Your potential client may be willing to pay slightly more for one feature, but they’re still getting excellent value because you bundled it together.

About The Author

Tiara Ogabang
Tiara Joan Ogabang is a talented content writer and marketing expert, currently working for the innovative company With a passion for writing and a keen eye for detail, Tiara has quickly become an integral part of the team, helping to drive engagement and build brand awareness through her creative and engaging content.
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