What is recurring revenue?
Recurring revenue is a portion of your revenue that is expected to continue to exist in the future. As opposed to one-off sales, recurring revenues are predictable, stable, and can be expected to occur at regular intervals in the future with a relatively high degree of certainty.
You can think of recurring revenue as a subscriptions customer pay for your services.
You can measure your recurring revenue, using different metrics, such as:
- MRR (Monthly recurring revenue)
- ARR (Annual recurring revenue)
Why should I focus more on recurring revenue?
As a freelancer you’re most likely between two positions,
- working with client project → this drives revenue
- searching for new clients → to find projects → that drive revenue
The goal with recurring revenue is to sell your work as a subscription or as part of a long term contract, this will allow you to provide your services and gain predictability in your revenue.
How can I start getting recurring revenue?
Easy!
Sell your work as part of a monthly or yearly subscription.
Give them a subscribe button, that’s all they want!
Here is a few practical examples of services:
Example #1 - Jane: UI/UX designer
Jane is an UI/UX designer
She work with customer to create the best interfaces and visual for their website.
To earn recurring revenue Jane could:
- Offer for example 5 illustrations for $299 per month
- Offer 10 hours of work for a customer for $500 per month
Example #2 - Patrick: Website developer
Patrick is a website developer, he usually charges a one-time fee to create website for his clients.
To earn recurring revenue Patrick could:
- Offer updates and security updates for $X per month
- Offer support and make small changed on request for $X per month
Theses are basic examples but I hope you see where I’m going.
Who should I sell my subscriptions to?
As we previously explained in a previous post:
Trying to get new customers who are completely new to your business will require a lot more energy to convert.
Focus on your current customer and offer them your services.
Your current customer will be the ones that will likely bring you the most revenue in the shortest amount of time and effort.
Simply because your current customer already trust you, and hopefully happy to work with you.
How can I do it?
There is many ways you can offer theses subscriptions services, here is 3 options available to you: (Including our solution Payge.io)
1. Use Payge.io - A payment platform made for freelancers
Pros:
- Personalised payment pages and invoices.
- Automatically send bills and reminders.
- Offer upsells up to the last minute on your invoice.
- Accept Credit Card, Paypal, Crypto, Bank , ….
- Take a hold from customer, before starting the work.
- Tax reconciliation
- 24/7 Support
Cons:
- 10 templates available at the moment
2. Share your subscription with your customer and send them a monthly/yearly invoice
Pros:
- Low cost
- Old school
- Good for <5 clients
Cons:
- Lot of work
- Separated accounting
3. Use a billing platform (Zoho, Freeagent, Zuora, ….)
Pros:
- Lot of features
- Easy tax
Cons:
- Lot of configuration
- Low personalisation
- No way to add upsells