Why Every Business Should Have a Monthly Recurring Revenue (MRR) Stream [Ep. 196]

Michelle (: 00:00

Hello, hello my beautiful listeners. Welcome back to another episode of The Real Truth About Business. Today we are diving into one of my absolute favorite, favorite topics to talk about. And that's reoccurring revenue and why every business I feel like should have some reoccurring revenue stream. I talk about this with my one-on-one clients and talk about the mastermind and I've taught a masterclass on it.

and especially, hopefully in: 2023

more prevalent. And so let's just dive right into like, why do I love it and why do I feel like everybody needs it? Well, number one is it creates a monthly baseline, right? Like it's reoccurring revenue, revenue that reoccurs in your business every single month, right? Why, who wouldn't want that? Especially, you know, it creates a level of stability and

I understand there's nothing stable and there's not to say that there's not people that are going to end out of a contract or something of that sort, but not everybody's going to leave at the same time, right? Ideally. And so creating reoccurring revenue gives you a stable or a sense of stability in your business from a cashflow perspective, right? From a cashflow perspective, you can work off of that.

. Right? And: 3000

Michelle (: 02:16

when I am looking at goal setting, my goal setting would then be, no, we need to get another 5,000 or 6,000, right? Because your reoccurring revenue is your base. And that becomes like this bonus income that you can just always count on. And then when you're working on your sales or you're looking at projections, you're always shooting high. But at the very least, then you're going to hit your number. So anyway, that's a whole topic for another conversation. But basically, like reoccurring revenue is this base.

stability that you have in your business and it allows you to build off of it. So it creates a sustainable level of revenue. And one of the things like I am always a huge fan of stability. You know what I mean? Like when we all know the entrepreneurial journey is up and down and ebbs and flows and all these things and I get that. But when you have reoccurring revenue, there's usually something to fall back on, especially when life changes or something.

the chances of every single person bailing on their contract at the same time or leaving, it just doesn't usually happen. There's a level of stable, sustainable income that it creates when you have these reoccurring revenue streams. The other thing is, is it gives you a baseline for your time because you know what you're committed to. When you have reoccurring revenue coming into your business, depending on what that looks like and how it's coming in,

you know, okay, let's say I have $5,000 or $3,000 in reoccurring revenue coming in. You know exactly what your time commitment is to continue to withhold that, right? Or to maintain that. You know exactly what you need to do as a exchange for that reoccurring revenue. So if it's one-to-one clients, if it's a membership, right? Like so the 100 Coffee Chats Club is a reoccurring revenue stream. I also know that it only takes an hour of my time.

Right? I have rapid fire coaching clients. Those are a reoccurring revenue. I know exactly what that looks like. And so when it looks, when you're looking at your business from a capacity standpoint, when you have reoccurring revenue, you know exactly where you're at and what your capacity is to take on new, whether that's new project income, whether that's new, another reoccurring revenue client, you can look at it from a very stable place.

Michelle (: 04:39

and understand exactly what you have so that you're not over committing yourself. And so I love it for that reason is that it creates this really great way for you not to over commit, but also to scale your time. And that brings me to my next point is it is scalable, right? Most reoccurring revenue streams are very, very scalable because they're in the form of a membership or a group program or retainer, something of that sort, the rapid fire, I'm gonna talk a lot about that, but

you can always scale it, right? It's a very scalable income in the sense that once it's set up, it runs itself for the most part. You know, most situations, no matter how you do it, when you have a reoccurring revenue stream, it's very scalable. All right. And then one of the other really important lessons or one of the really important

points here is that it creates customer loyalty. Because reoccurring revenue means they're in your business and you're building a relationship with them month after month after month after month after month. Right, and so it creates this loyalty around and builds your trust factor and it builds your lifetime value of a client versus a one time value. Which that also is going to be another episode because I think that is such a point that is missed. There's so many people that are looking for that.

one-time value, that one-time sale versus a reoccurring lifetime value. Right? And I'll give you an example. Like I have a reoccurring revenue client one-to-one that has been with me for five years. Okay, five years. The lifetime value of that client is far larger than any new one-time client coming in, right? Not to mention the loyalty and all the other things we've created, the different opportunities that we've created.

you know, other programs that I've sold her and things that we've done. Like the lifetime value is massive compared to a one-time value. And you build that when you have reoccurring revenue, because also if you think about it, when you have somebody that's on a reoccurring revenue stream for you, it you're keeping them, you know, I always use the analogy, like they're, they're in your pond. They're continuing to stay in your pond.

Michelle (: 06:55

And so when something new is coming out or you're launching a new offer or maybe it's a supplemental offer, so for example, my one-to-one clients that are on RapidFire Retainer, when Hunter Coffee Chats Club came out, of course I immediately talked to them about it first, because they were the first people that I wanted to tell about it. They're already in my pod, they already know, like, and trust me, and so there's an opportunity there to upsell or give them that next step.

Okay. And I know like upselling it sounds when we have such a negative connotation around all of these terms, like, Oh, you're only, you know, people be like, you don't want to sell them again. If they're already your client. No, if you have something else that is a massive value to your client and it's a win-win, absolutely you should be selling them because that's why they still trust you. You should always be looking for what else do they need and how else can I serve them?

Right? That's the beautiful thing about business, especially when you have these long-term loyal relationships is what else can I do to continue to serve them? So you have, those are like my top four. I think it was four reasons that I gave you why I feel like you need it and how it's going to benefit your business, right? The benefits of

Obviously from a cashflow perspective, that's number one. Number two, from a time perspective, you can understand your capacity and not getting over committed. Number three, it's scalable in so many ways. And number four, it creates a massive customer loyalty. Okay, so those are really in general, we could end this episode right here and that would be enough. But I wanna dive in deeper about like, what does it look like? What does it look like? So reoccurring revenue can be...

a variety of different things. It can be a membership like the 100 Coffee Chats club is a membership, right? Where people pay every single month, we meet weekly, we network, whatever. That's a membership. It could be a membership that's more like a small training, you know, a supplemental training type membership where maybe you have a guest expert once a month or

Michelle (: 09:06

you have you're doing a training once a month. So maybe it's I'm in a membership right now. That is one masterclass a month. The coach that runs it she does it is it's a membership and she offers other things I think like she offers a networking call. But the base of the membership is that you get one masterclass a month with her. And it's a low cost membership, reoccurring revenue scalable, she can put as many people as she wants in there because she's running these master classes on zoom. Okay.

So it can look like that and they can be high ticket or they can be low ticket. Don't think memberships have to be low ticket, okay? We typically believe that they are low ticket but memberships can be high ticket, right? So the Accelerated Business Alliance, Mastermind, that is a higher ticket. Masterminds in general are still considered, I mean, it's similar to a membership, they are higher ticket, okay? Payment plans.

are a great reoccurring revenue stream, especially if you have a very high ticket offer. I know a lot of people like to offer like a pay in full discount, but again, from a time and capacity and then a cashflow perspective, payment plans are a great reoccurring revenue stream. If at any point, I mean, I typically offer a payment plan and I prefer when people choose that, just from a cashflow standpoint. Because again, I like to know what my baseline reoccurring monthly revenue is, where I'm at and what I'm...

what I'm striving for from a goal setting perspective, payment plans are a beautiful thing. And that can be simple. So again, you don't have to create something new. Maybe you just make a different payment plan option in your business if you don't currently have one. Retainer clients, that is personally my favorite of all time. I am a firm believer in having retainer clients, long-term retainer clients, six, 12 months.

The rapid fire coaching model, I'm actually getting ready to teach a master class on it. I'm gonna talk a little bit more about that at the end, but no, it's called the rapid fire profit accelerator. If you want to implement this rapid fire unlimited support style in your business, I am going to be teaching a master class on exactly, not even a master class, it's a full on workshop on exactly how to implement this unlimited support model in your business to scale your one-on-one and create

Michelle (: 11:28

a reoccurring revenue stream without adding time or a team. Okay. Those are the big things. So I'm super excited to teach that because to me, it is one of the best and most scalable one-to-one reoccurring revenue streams out there. And I think every single service provider from email marketing to I have a dog training client that's offering it to coaching to anything, anything. If you are a B2B service provider or B2C service provider, even. You can implement this style of retainer.

unlimited support package. By far my absolute favorite. And then there's group programs. Some people thrive and love, love group programs. I personally am not a group program person, but I see the value in them. I just don't learn best that way and I don't teach best that way. And so group programs are an incredible opportunity for reoccurring revenue stream. And again, it could be a six month program, it could be a three month program.

It could be any different things and as long as you have a payment plan or it's a monthly fee, right? To have this group program, you can, it creates a reoccurring revenue stream, right? And again, all of these terms per se are interchangeable, right? Like I say retainer clients because to me, retainer means like we've done some deep work and now they're just on long-term retainer support.

ly popular back, I would say,: 2018

just because I think it got so overdone, just like everything does in the online space, but in general, I think it's brilliant. I see like Justin Welsh has a great subscription model. I think it's like $9 a month that you pay and every month you get these templates of like his best performing LinkedIn posts. And they're just basically like templates. Here's what it was, here's why it worked and here's the template for how you can interchange it.

Michelle (: 13:48

There was ones that were like social media content calendars. I was in a subscription membership that was Graphics, right? You got graphics and you got social prompts again I think the humanization of those is getting where people don't necessarily want those templates per se but you could really make that something beautiful like

I think Aaron with member vault is getting ready to launch one similar to that. I don't know exactly what it's going to be, but it's going to be a subscription model of like a year's worth of emails. Like here's emails that I sent, here's the open rate and here's how you can implement it. I think they're brilliant. Those are an incredible reoccurring revenue stream if you like to create content. I know I have another friend, she's been doing this with operators, like people in the operation space.

She creates it and just gives them like monthly content that they can use and then customize to their business. And it's a subscription-based model. So again, beautiful. You create it once, you send it out. It's a one-to-many offer. It creates a great revenue stream for her. So again, thinking about this also too, like tying this back to why is this scalable and how you can sustain it? Because most of the time it's maybe work one time or

but it's a one to many for the most part. Or like with the rapid fire business model, that's still one to one, which is brilliant. That's what I love about it so much is that it still allows you to serve one to one, but it's not time on your calendar. Okay, and so that's the thing with monthly reoccurring revenue is for the most part, there's not a lot of time involved. There might be time involved upfront, but there's not a lot of time involved over time, like over the long haul of time. So that's what I love about.

that for the most part. And that's why I say it's scalable because it does free up your time for the most part. Okay, so I also think that reoccurring revenue, why I say it should just be a part of your business is it's a great add-on option. It's a great like step up or step down.

Michelle (: 15:55

So let's say you're getting ready to, I'll give you a perfect example. This year I am going to be running my biz plan program. Like I always do sales plan. I'm going to really dive more into the sales aspect of it this year. Um, but sales plan. And so in itself that will have a payment plan. The, the program itself will have a payment plan. It's a, it's a 12 month program, but then there'll be an option to upgrade.

to one-to-one with my rapid fire support, right? And so it's a great add-on option, right? And so there's that option too. So let's say you run a six week program and you give people the option to upgrade to one-to-one support, or they go through your six week intensive and then they still need support, you can then, this can be like their next step. What's the next step?

what's the next step down. So they don't necessarily now need to meet with you once a month, but they still want your support. You could make it where it's a group implementation type program and so that it becomes a one to many. So everybody that goes through your one to one program, then you step them down and they go into a group implementation and maybe you run a once a month group program, group call, like a Q and A or your co-working or whatever. So I'm saying the possibilities are absolutely endless.

's a great option. So like in: 2023

big packages aren't selling, you have these loyal clients that are on reoccurring revenue, right? They have carried me. If you listen to my episode, the last, my last episode about like the behind the scenes behind my business and how I switched to low ticket and it tanked my income, the way I've been able to do that was because I had these other reoccurring revenue streams already built into my business to sustain what I was doing while I was also promoting something new.

Michelle (: 18:14

Right? And so that's where I'm saying, like, I may have taken my foot off the gas a little bit with one to one so that I could get the Hunter Coffee Chats Club launched, but I had that reoccurring revenue stream where at the very base bottom line, I knew that I had this amount of money coming in. I could count on every single month. And there is a sense of incredible stability that comes with that. And it really allows you.

to either invest into new things. Like I said, maybe your reoccurring revenue stream is just your little fund that allows you to reinvest into your business, that allows you to hire the coaches, to join the programs, to do the networking, to invest into people to help you get something launched. And maybe it's not your only revenue stream, but it's there. And that's why I think it's so powerful to have that, is to have that.

it's almost like a little bonus account, right? It's like you can always guarantee and it allows you to do other things in your business that will grow and scale it that because you have that stability. And I think that's what's most important there. So I can go on and on, obviously I taught a masterclass on this for over an hour. So I can go on and on about reoccurring revenue. And when I work with clients one-on-one, my goal is always to try to find some opportunity for reoccurring revenue.

And it looks different for everybody. Like I said, it looks different for the dog trainer versus my client that loves to do clickup. Like she hates offering one-on-one support, really. So that's not a good reoccurring revenue stream for her, but we do have a reoccurring revenue stream in a different fashion in more of a mastermind, right? So again, it looks different for everybody, but there's always usually some opportunity in your business to create it.

And I highly recommend that you look into it. So if you want to implement or you're curious and you want to create that, um, reoccurring revenue, rapid fire, unlimited coaching, boxer coaching. I know a lot of people call it boxer coaching or that more just on demand level support. Um, definitely get on the wait list for the rapid fire profit accelerator depending on when you're listening to this. Maybe it's already.

Michelle (: 20:29

open cart. It depends. I don't know if you're going backwards, but either way, it will be available live and then replay. So even if you're, uh, missed the live, you'll still be able to get the replay, jump into the show notes and grab the link because there's going to be some massive specials for those on the web, um, on the wait list. And I cannot wait to teach this, this again, there's no upsell.

our biz plan, hint, wink, for: 2024