Revenue Streams and Building Recurring Revenue Into your Business

Revenue Streams and Building Recurring Revenue Into your Business

Without consistent regular income your business will die or never get started, and so you need to be absolutely clear where your revenue comes from if you want to succeed. And when it comes to revenue streams and revenue generation, the optimal mix depends on the kind of business that you have. 

As examples let's look at two types of business – a retail business and a coaching business.

I think there are a few different types of revenue in any business, so that's important to understand. So for example, if you're a retail business, probably most of your revenue is going to be from retail product sales, typical that sold over the counter and probably some online or mail order aspect too. Whether you're selling shoes, or widgets, or meals, whatever it might be, that's where you'll make most of your money.

But now let's  think about what else you can do to bring additional revenue in. Maybe you could add some kind of coaching or training in using what you sell, perhaps in the form of classes, possibly some kind of craft workshop. 

It could be a wine tasting session or set of classes – perhaps labelled as a "Masterclass" to appeal to your customers who are real enthusiasts about what you sell. If you sell kitchen equipment it could be a set of cookery classes based round one of your popular products, such as a premium Food Mixer for your home baking customers. 

I'll add a personal example to this, when a local Young's Brewery pub did a wine tasting course which lasted for six weeks and it took place at one of their venues. It actually turned out to be one of the most useful things I've ever done, as I had spent all this time in my first few years in London drinking wine and sort of blundering around wine lists hoping to get something good, only knowing that I really liked a few particular varieties and regions, but I didn't know WHY I liked them! 

So that was a that was a really useful thing for me as a customer, and it made me more loyal to that pub, but it was another revenue stream for the brewery and so classes can be a good additional income source. 

And then the other one that I see more and more of now is some kind of recurring income or re-bills added to the retail model. 

That could be a Product of the Month Club, or it could be a monthly discount for regular orders which, if it's for a consumable product, can work very well. That could be for the kind of thing that you see on Amazon a lot now, the 'Subscribe and Save' type products that offer a discount for regular purchases. 

That can be anything from vitamin supplements to even products like toilet roll – you know, you can literally have your toilet roll sent to you as six rolls a month or whatever you might want to have. So that's a massive area now for all kinds of retailers. 

And, talking of Amazon, they've got probably the biggest recurring income service of the lot with Amazon Prime.  I'm sure most people reading this are members of Amazon Prime, as it just makes so much sense to the customer to get all these benefits in one place for a relatively low price. 

And they've got something crazy, like 100 million members in the USA alone and another 15 million in the UK , each paying $99/£79 a year, so the numbers are just astronomical. That is one absolutely brilliant recurring income method.

Another one you are probably aware of is doing affiliate promotions for other people's products and services. A lot of this is carried out more online than face to face due to the tracking possible with online sales, but certainly promoting other people's products (that are typically complementary to what you do) for a cut of the sales price can be a very important income source. When done face to face in retail situations it is more likely to be a less formal "you recommend me and i'll recommend you" kind of arrangement where no money as such changes hands, but will likely lead to more business in the future.

And then anther source of revenue is creating and selling information products, and this is possible even for a retail business, though it may be more relevant a little further down the line as a business becomes more mature. 

If you're a bricks and mortar business it might be more of a B2B sales opportunity related to information on the business that you run and what you do, such as your expertise in building your particular type of business. 

A great example of this was a very successful information product by a guy who had a popular chain of fish and chip shops based in Yorkshire in the UK, and he wrote this

book, or course in reality, on how to make money by running a fish and chip shop. 

Rumour has it that he made more money from the book than he ever did from his Fish & Chip shops! 

But it's no surprise that this kind of book was a success really as when you set up something like this you have to invest a lot of money up front because you have to buy all the equipment, kit out the premises, buy the stock etc. 

You're talking about tens of thousands of pounds, if not six figures, so to then spend a few hundred pounds on some proven information about how you can do it better and minimise your risk of failure, kind of makes a lot of sense. 

So here's a summary of the retail business income streams:

• Product / Retail Sales

• Coaching / training

  –Classes (e.g. craft, wine tasting)

• Recurring income (rebills)

  –Product of the month club

  –Monthly discount for regular order, esp if consumable product

• Affiliate promotions of other people’s products or services

  –Can be mostly digital via email list

• Creating and selling information products

  –the story of your success with your retail business, perhaps further down the line

The other example we will look at is a coaching, or 'expert', type of business where you are remunerated for passing on your skills and knowledge to others.  

This is probably the most common type of "side hustle" for people to start, typically alongside a day job (so could be relevant to a lot of you) simply because it avoids the start up costs of a traditional physical product type of business. 

So for those running a coaching / consulting / training business, where most work is done face-to-face or in small groups, the main 'bread and butter' income will come from those paid for 'sessions' of some form.

But for people working in this area, and where a lot of communication is done digitally or online, affiliate promotions, promoting other people's products and services, can be a really important way of earning extra money.  

Indeed for some people, especially those with a large audience,  affiliate marketing can be a sole source of income because it is totally scale-able and is not limited by your maximum number of weekly billable hours, which is the big limitation of a conventional coaching type of business.

The next income stream here – and one that is very important to me personally – is creating and selling information products. If you are a coach or expert and you are NOT doing this, then you are leaving money on the table.

I went through this with an example in the retail section above, but it is even more crucial here to be packaging your face-to-face training and selling it as digital downloads of PDFs and videos etc because it is a fantastic and scale-able income option for any expert or coach.

Now here i'm leaving the best till last for coaches, and although we have covered it already above, I believe it is the most important of all for this kind of business.

And that fourth element is recurring income, which I'm a massive fan of simply because it is the smartest form of income, and it can come from your own products and services – often in the form of memberships and group coaching. 

And the great thing is that there are benefits on both sides. This is simply because it also usually makes more sense for the clients of coaches to be in a membership, or regular format of coaching, because one off 'hits' of information will rarely achieve change in any field of life, and people need consistency and support for real 'transformation' to happen.

But it's certainly crucial to know where your income comes from, and also any income dependencies. So you need to know what comes first as, for example, you need the shop with its regular customers and footfall of visitors  before you can have the craft classes or the product the Month Club.

But recurring income is a crucial part of any business for its owner. It's quite simply security. It's regular cash coming in. It's a safer foundation.

And therefore it's the key for moving your business from being that "side hustle" or a part time weekend job that you'd like to be full time, and dumping the day job, because that's the biggest thing for people who run expert businesses or are contractors or coaches, it's that business life can be 'feast or famine' sometimes, and so anything that allows more consistency of income is very welcome.

Because you can have a few good months and then you can be scrambling around to pay the bills. I know what that was like. I absolutely understand that and it's not a good place to be.

To summarise the options for coaches and experts:

• Coaching / consulting / training fee income (Face to Face)

• Affiliate promotions of other people’s products or services

  –Ideally including recurring products

• Creating and selling information products

• Recurring income (rebills) from my own products and services

  –Membership

  –Group coaching

If I had my time over again, the first thing I would do is set up recurring income pretty much from day one, or certainly at least in the first few months once I had got the foundation in place. And it's not as hard as you think if you take a systematic approach and examine how best it can work for you as a key part of your ongoing plans.  

We use cookies to give you the best online experience. By agreeing you accept the use of cookies in accordance with our cookie policy.