Service-based startups are challenging to scale because many services  are delivered as a one-time sales, and many costs are fixed so don’t scale up and down exactly in-line with demand. This creates a typical feast or famine scenario, as most service-based businesses lack steady and recurring revenue. Irrespective of the type of company, recurring revenue is an essential income stream because it provides a consistent stream of income that can be relied upon to cover expenses and grow a business. 

Unlike one-time sales or one-off projects, recurring revenue comes in every month, making it easier to budget and plan for the future. Additionally, subscription-based models typically have higher customer lifetime values, meaning each customer is worth more to the business in the long run. In other words, recurring revenue is the key to a sustainable and successful business.

Can service-based startups make recurring revenue? Certainly, yes! 

Here are the five best recurring revenue ideas for service-based businesses. 

1. Create a Membership Program

Building a membership program for your customers can be a great way to generate recurring revenue. For example, customers can access exclusive services, discounts, premium support, and other benefits by paying a monthly or annual subscription. 

To get started, you'll need to determine what type of membership program will best fit your business. Once you've decided on the program structure, you can begin marketing it to your customers. By offering a valuable membership program, you can keep your customers coming back month after month.

Remember, the membership program has to offer some value to your customers. Plan your membership benefits based on the type of your business. 

2. Introduce Retainer Agreements

Introducing retainer agreements may be a good option if you're looking for a way to increase your recurring revenue. By entering into a monthly or annual subscription agreement with your customers, you can provide them with a set amount of services each month or year. This strategy can help to stabilize your revenue stream and provide you with a predictable income. 

When introducing retainer agreements to your customers, it's essential to be clear about the contract terms and what they can expect to receive. Be sure to outline the agreement's benefits, such as stability and predictability, and explain how it will work. Once you have their agreement, be sure to deliver on your promises and provide the agreed-upon services promptly and professionally.

Remember that you must do a lot of research before introducing new contracts. If not executed properly, it may impact your business negatively.

3. Build a SaaS App 

Yes, you read that right! It may sound unreasonable to build new apps for revenue generation. Interestingly, many businesses, such as web development companies, MSPs, marketing agencies, and creative service providers, have created apps supporting their services and charging their customers monthly, quarterly, or yearly. 

These apps can range from service management to feature enhancements. Here are a few examples.

An online reputation management agency, which used to provide ORM services manually to each client, built an app to automate the entire business process and eventually converted their business model from service to SaaS.

An e-commerce development company created a Shopify app, marketed it, and made huge recurring revenue. 

These are some examples of how service-based companies can tap into recurring revenue. 

4. Explore Affiliate Channels 

Many of your customers are the target audience for a lot of SaaS companies. For example, if you run a digital marketing agency with hundreds of clients, many companies, from hosting services to business software providers, love reaching out to you. 

Affiliate marketing is a great way to make additional, recurring revenue. By promoting products and services that you believe will help your customers and add value, you can earn a commission on every sale you generate. It can be a great way to boost your revenue. 

The key to success with affiliate marketing is finding the right products and services to promote among your customers. You'll want to choose something you're passionate about, so you can sell it effectively. Besides, the product or subscription should also provide value to your customers. 

5. Forge Strategic and Technology Partnerships

Many leading technology companies like Microsoft and Google offer technology partnerships for companies of all types and leverage their customers to increase revenue. 

Partnerships like these are relatively easy to find. However, winning them can be difficult, especially for small companies. 

The right technology partner will help you develop and implement the systems and processes necessary to drive recurring revenue. They will also provide the expertise and support needed to keep your business on the cutting edge. 

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