A picture of four coins falling towards a table in a trickle.

8K – Recurring Revenue

by mike tombs
Comments are off for this post.

Onto week 5 of the 8 Key Drivers of Business Value: Recurring Revenue!

Having a reliable and consistent source of income without having to fight for every sale tooth-and-nail will not only make your business more valuable, but also far less stressful.

There are six main types of recurring revenue, which I will put in order from worst to best:

  1. Consumables – disposable products like toothpaste
  2. Sunk-money consumables – a customer invests in an item (called a platform) and buys supplementary items along with it. Razorblades are a good example.
  3. Renewable subscriptions – fixed-term subscriptions such as with magazines
  4. Sunk-money renewable subscriptions – purchase of a ‘platform’ with a subscription on top for information, such as the Bloomberg terminal that stockbrokers use
  5. Automatic-renewal subscriptions – subscriptions with renew automatically such as document storage
  6. Contracts – Hard contracts for a defined term. Think mobile phones

If you want to dive into the nuts-and-bolts of how to achieve a more valuable business, we’ve put together a short training webinar to help you out. You can get free access to it at:

-> https://events.genndi.com/channel/ValueBuilder

Share this article

Comments are closed.