Many business owners have been inspired by the successes of companies like Design Pickle, rushing to start their own unlimited service business. Imitation is the sincerest form of flattery after all.
A recurring service business indeed brings many benefits to the table. But what type of business can offer regularly billed services?
The advantages of a recurring service
New and old businesses often struggle to manage their cash flow. They would like to invest more in their expansion, but are looking for a scarce source of income.
This is where recurring services come in: instead of hoping next month will be better, they allow you to accurately predict your income. Recurring service may be billed
- weekly or bi-weekly,
- quarterly, or
These are the most common types of billing periods used by many business owners. Depending on the client management software you are using, you may be able to configure your recurring services differently.
To keep it simple, a monthly, quarterly, and annual pricing structure is ideal. Here’s why:
- Annual pricing allows you to link your customers to your business while providing a discount.
- Quarterly subscriptions still have value, but the discount should be lower than annual subscriptions.
- Finally, the monthly pricing should be fully billed, as a customer can always cancel easily, leaving you with lower cash flow.
By ignoring monthly recurring income, you can plan your cash flow by looking at quarterly and annual subscriptions, and plan three months ahead. This should give you enough leeway to hire new staff, invest in software, etc.
Next, let’s take a look at a few businesses that would benefit from a recurring service model.
1. Unlimited design companies
As mentioned earlier, Design Pickle is the number one inspiration for any designer looking to start a subscription business. And there’s a good reason for that: it’s incredibly easy to come up with a sustainable pricing model.
Here are some things to consider:
- stand out from the competition by offering something new
- charge a higher price for a faster turnaround time
- propose a plan with a dedicated designer
These are just a few business ideas to think about. One thing that doesn’t work in most cases is using a lower price to make yourself stand out. Low prices attract customers with small budgets, leaving your business struggling to make ends meet with low profit margins.
2. Content writing companies
Many content writing companies have focused on a price per word structure. While it’s not a bad one, it’s not that appealing. Problem number one is that no one knows exactly how many words they need. Potential customers are stuck in front of a price calculator asking them to choose their word count so they can place an order.
Instead, use a pricing structure like this:
- propose word packs (10,000 words, 50,000 words)
- charge more for native English writers
- lower your prices for high volume plans
The idea is to offer a recurring service that your ideal customer would find suitable. For example, many small and medium-sized businesses struggle with writing content. They just don’t have time for this which is why they are looking to outsource this business. By offering recurring monthly plans, you perfectly meet their needs.
3. Video editing companies
Video editing, especially in the podcast niche, is becoming more and more popular. The cool thing about podcast publishing is that it is easy recurring income. Anyone who starts a podcast will try to keep it alive for as long as possible.
There are two possibilities to integrate a recurring billing model:
- provide regular video and audio editing service for established podcasters
- help newbies launch their podcast and bring it to the forefront
The launch plans could include a number of episodes that will be edited as well as the creation of intros / outros, cast, etc.
A successful launch increases the chances that the customer will stay in the podcast publishing business. The business can then switch the client to regular podcast plans (billed monthly, quarterly, annually).
4. Social media companies
Social media users hit a record 4.20 billion according to a study published by We Are Social and Hootsuite. It’s no surprise that many companies are investing heavily in their social media efforts. And some companies are trying to help them in their efforts.
Many former social media managers turned their skills into monthly management plans. Here’s what some of them include:
- a number of posts published each week on a number of social profiles
- monthly reports on social media activities that track engagement
- some plans include a writer, editor and dedicated manager
Standing out from the competition can be a bit more difficult than with other companies. The key might be to focus on specific industries based on your industry knowledge. For example, if you’ve worked in the travel industry, target travel companies looking to expand their social media footprint.
5. Book publishing companies
Hybrid publishers have been successfully producing their business for many years. A reputable hybrid publisher (as defined by IBPA) must meet a variety of criteria, such as meeting industry standards, and demonstrate respectable sales.
To do this, they need a business model that works well for both parties. Most hybrid publishers have a one-time fee that includes services provided for the entire launch of the book:
Interestingly enough, there don’t seem to be a lot of publishers using a recurring service model. This could include the services mentioned above as well as an ongoing marketing service that continues to promote the book. Most books struggle to sell after initial launch, so promoting them with ads should keep the momentum going.
The above article demonstrates that many business owners have the option of offering recurring services. In most cases, they should reduce their workload and improve their cash flow. This allows companies to expand their operations and stay ahead of the competition.