‼️ Why does Deb emphasize that her advice on how to build sustainable service-based business is tested and proven? 1:34
🔥 Not all advice is good advice! Join us in the Life After Corporate club in Clubhouse.
4:39
✨ What does it take to build predictability into your business model? 5:37
1️⃣ Create a renewing revenue stream by packaging services as products. 8:18
2️⃣ Create a marketing strategy that delivers predictable results and what it takes to make it. 10:00
3️⃣ Create software that you sell as a service.12:47
✌️ Predictability is peace of mind. 15:02
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The Magic of Predictable Recurring Revenue
What if you knew what to expect your revenues would be month after month? What would that give you? Peace of mind that you didn’t have to struggle, confirmation of your value, a base from which to expand your business? Yes, all of that.
What if you knew what to expect your revenues to be month after month? What would that give you? Peace of mind that you didn’t have to struggle? Confirmation of your value? A base from which to expand your business? Yes, all of that. We are unpacking the magic of predictable recurring revenue and it feels good. Welcome back to another episode. If you’re new to us, welcome home. It’s here that you will find tested and proven advice on what it takes to launch and grow a sustainable services-based business. I emphasized tested and proven because of an experience I had on Clubhouse. I know you want to dive in and get to that predictable revenue stream. On my daily beach walk, I tapped into Clubhouse and got into a room that was about building online courses.
If you’re not familiar with Clubhouse, it’s a social platform that is audio-only. There are thousands of clubs with people gathering from all over the world to discuss everything from cryptocurrency to the future of the planet, entrepreneurship, spirituality, mindfulness and every topic you can think of. There’s even a Lullaby Club if you have insomnia and want a bedtime story or be sung to sleep. It’s pretty good. If you would like to learn more about Clubhouse, drop me a note in the Life After Corporate Facebook Group. I’m happy to host you as a club expert on the show or give you a link to join our club if you don’t already have one.
Let’s go back to my beach walk. When I’m walking, I sometimes love to catch up with podcasts that I follow or tap into a Clubhouse room. Sometimes I love the solitude and meditation of listening to the waves come in and out. I decided to see if there was an interesting discussion happening on Clubhouse. I found a room talking about online courses and I love talking about online programs. I’ve built my entire business largely on programs that are a combination of online learning and real-time mentoring. It’s a great way to build leverage into your business and generate recurring revenue.
The coach who was moderating the room, also known as the mod or moderator, was handling questions from the audience and dishing out advice on what technology platforms to use, effective marketing strategies and even how to run Facebook Ads to fill your course. When I heard her say, “All you need to do is boost a post,” I thought I was going to lose my cookies. It was clear that she was new to this herself. She didn’t have a ton of experience. From the advice she was offering, I’d be surprised if she was earning more than $50,000 a year.
Predictability is peace of mind.
When you’re in Clubhouse, you’re either in the audience, raise your hand, get on stage or unmute your microphone and ask a question. One woman got on stage to ask a question about enrolling people into her Masterclass. Without going into all the dirty details, she was simply steered way far in the wrong direction by this “expert.” I was upset by this. I reached out to that woman who was asking that question to have a call with her and share my experience launching online programs. Not to sell her anything but to be a good citizen.
She could tell that there was something off with that moderator’s advice and was grateful for our call and the advice I shared. Buyer, beware. Clubhouse has democratized expertise by allowing anyone to take the stage and offer their advice but not all advice is good advice. Choose your rooms and experts carefully. Vet your sources and connect with people you know, trust and follow who they follow. If you’d like to learn more about Clubhouse, you can search for the Life After Corporate Club and follow us there. I promise you that I only bring in trusted experts to share with my community. It’s a way for you to get real-time answers to your pressing business questions about how to start or grow your business. How cool would that be? Plus, I would love to get to know you. There are many readers and we don’t know each other in real life. Maybe you follow me on one of the social platforms. I would love to have a real-time conversation with you.
Let’s go back to the topic at hand, the magic of predictable recurring revenue. It is every entrepreneur’s dream. I frequently hear new clients say, “I want to make money in my sleep.” That’s not the actual definition of recurring revenue. Having predictable monthly revenue will make you sleep much more easily. There are many parts of the process that you can automate and transactions may be happening while you’re peacefully dreaming about your next beach vacation.
I want to break down for you what it takes to build predictability into your business model. There’s nothing worse than waking up to $40 in your business bank account. This did happen to me early on in my journey and it doesn’t feel good. It lights a fire under your butt to get your hustle on because it’s scary but no one wants to be hustling all the time. It’s not fun and sustainable. This is where your corporate experience can come in handy.
Predictable Recurring Revenue: Not all advice is good advice. Choose your rooms and your experts carefully. Vet your sources and connect with people you know and trust.
As you likely know, predictability is a requirement for public companies. Investors love predictable revenue models because they hate surprises. They want to be as sure as they can be that a company is going to meet or exceed the revenue projections. If you worked for a public company, you know exactly what I mean. Every quarter, the CEO and CFO report earnings to investors. If they have missed their targets, it’s never good. They can expect an investor to sell off or even reduce the valuation of the company.
A great way to keep investors happy and valuations high is to be able to predict what your future revenue will be. Entrepreneurs love predictability too. The worst thing that can happen to a business owner is a month with little to no revenue or just $40 in your checking account, especially as you grow. It’s not good for you as a business owner either, especially if you were the first and only investor in your business. Let’s be honest. You sleep a lot better knowing that there is revenue that you can count on making its way to your bank account on a regular basis. Yet, when you first start out, there’s a ton of variability in revenue. Some months it rains and other times, it’s a drought. It’s hard to manage expenses and impossible to hire staff if the money coming in isn’t reliable.
How can you build in predictability from the start? Content-based businesses are a perfect business model for predictable recurring revenues. There are three ways you can build more predictability into your revenue. One is to create a renewing revenue stream packaging services as products. This could be anything from a very affordable membership program model to a year-long Mastermind program that is a five-figure investment. The benefit of selling a service with a monthly billing model is that you have visibility into your cash forecast. As long as you are delighting your customers, fulfilling your value proposition and effectively marketing to enroll new clients, those fees will increase over time.
It’s much easier when you first start out to sell a high-end service with fewer customers. When you launch a low-end membership program at let’s say, $47 or $97 a month, it takes a lot more subscribers to get to your six-figure business. It can be done. I won’t say it’s impossible but it takes dedication, focus and an effective sales strategy that will deliver those consistent conversions every day. If you want to know how those community-based subscriptions grow, read my interview with Joyce Shulman. She’s the Founder of 99 Walks. It’s an app that establishes community around walking as a healthy habit that also has a social benefit. Predictability is golden. Without it, how can you grow your staff? You can’t hire other people if you don’t have consistent revenue to meet the payroll.
Without metrics, you’re just taking a shot in the dark.
The second way to build in predictability is to create a marketing strategy that delivers predictable results. We do this a lot in The Launch Lab and it’s why we created Stand Out Webinars. It’s also known as the rinse and repeat strategy. I have a marketing strategy that consists of paid advertising, organic reach and consistently delivering online talks, webinars and workshops that deliver great value, encourage clients to take the next step and sign up for my programs. I have delivered these webinars enough times that I know the metrics. I know the registration rate will be between 40% and 50%. About 50% of the people who sign up will show up and 25% of those will schedule a call or register for my program directly from the webinar. I can create repeatable and predictable revenue by being consistent with my marketing.
In order to do this, you have to have marketing assets in place, to begin with. This might take a little time to get right. Too often, new coaches and consultants will create a piece of content and send it out there without analyzing the metrics. We want to pay attention to how many people stop by and look at that piece of content. How many people enter their email addresses and download that piece of content? What percentage of prospects take the next step? Are they opening your emails on a consistent basis? All of this can be automated in your lead management system. You shouldn’t be chasing after everyone who signs onto your email list. You should be offering them things of increasing value and giving them the opportunity to share what they’re up to and get to know you.
When you have tight metrics, you can adjust your marketing to get the results you want. That’s how I’ve doubled my business and on track to double revenues again. It doesn’t happen without consistency on my part. I still have to manage my calendar and show up every day to deliver. It also requires that I have the right team in place. If I’m counting on organic growth through email marketing, social media and I have hired the wrong team, that costs me money because we are leaking opportunities. To make this model work, you need to have the right team, content and consistency. You need to measure and adjust along the way.
The third way that you can create predictable revenue is to create software that you sell as a service. One of my favorite colleagues and seven-figure mentors is Jane Deuber. She is the Founder of Global Experts Accelerator and two software platforms that I use to run my business. One is called Smart Biz Quiz, an assessment and quiz tool that has many uses in my sales funnel. I must have seven assessments in place and maybe you’ve taken some of them. I use them to deliver value in my marketing and assess who’s at the right stage to work with me.
Predictable Recurring Revenue: You can create repeatable, predictable revenue by being consistent with your marketing.
Jane and her team have created value in this tool that you can’t get from online survey tools. There are email auto-responders and the data is integrated with my CRM system for better segmentation. This is where we can geek out on the data. I won’t go there but the point is that this is a scalable and repeatable revenue model. There’s a monthly fee for this software. As her company expands, we’re bringing new users onboard. They increase the revenue and it becomes predictable time and time again. They’re able to predict the monthly revenue stream from the SBQ software.
This is how I ran my business in the corporate world as well. We sold a service that we productized as a product. It is renewed annually and the service was sold to corporate executives for $45,000 a year. Based on a renewal rate and sales close ratios, we could build out a predictable revenue model that was very accurate. This enabled us to also predict when we would need to hire new staff on the team. When you’re selling a renewable service or software as a service, you can build predictability in your business.
As an investor in your business, this will help you sleep well at night and be confident that you are on the path to growing your business as big as you want it to be. It also gives you confidence that if it’s time to bring on a team to work with you, you’ll continue to have the revenue to take care of your employees. Predictability is peace of mind. As you build out your business model, think about what you’re offering, how much you’ll charge, how your marketing will work and committing to renewability and predictability in your revenue stream even though at first, this will take some trial and error to get right. The important thing is that you measure. Without metrics, you’re taking a shot in the dark.
Those are the three ways that you can bring predictability into your revenue streams. I hope you found value in this episode. You can create your recurring revenue streams by packaging your services, marketing that delivers predictable results and software that you sell as a service that has a predictable, renewable revenue stream. I would love to continue this conversation on Clubhouse. Be sure to join the Life After Corporate Club if you are already on Clubhouse or the Life After Corporate Facebook Group. There’s a link there. Even if you’re not a member of Clubhouse, you can join our club on Facebook. You don’t need a special invitation. I’ve got 22 or 23 invitations that are waiting for you to click and claim one. That’s it for now. Until next time.
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