Business Model Trend #3- Create Recurring Revenue
Winning business models of the future will use membership models such as: home repair clubs, weight loss clubs, computer repair clubs and hundreds of other recurring revenue models to make their sales more predictable and profitable.
Of course, to create a business model with recurring revenue, you must have a suitable customer base and product. However, many business owners believe that recurring revenue is only for health clubs. Many business models have creatively used recurring type payments that are not memberships. Examples include:
- Web applications such as salesforce.com
- Coffee clubs
- Book clubs or Columbia house CD club
- Audible.com uses credits instead of cash
- Home warranties and extended auto warranty business models are effectively prepaid repair bills
Creative business owners will find ways to create a business model that has recurring revenue vs. a sell-deliver-resell business model.
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