Recurring Revenue
I got this question yesterday:
"Stacey, curious your thoughts on owning and growing a franchise that has one-time revenue vs recurring."
Everyone thinks they want recurring revenue.
It’s the holy grail, right?
Predictable cash flow. Reliability.
The feeling that you don’t have to always be "on" chasing the next sale.
But here’s what most people don’t think about:
Most recurring revenue businesses are small tickets: $100-200 per customer per month.
You need A LOT of customers to make significant money.
500 customers at $150/month = $75,000 monthly revenue.
Sounds great until you realize it could take years to build that customer base.
You’re also losing customers every month for various reasons.
All while spending lots of money to acquire them & deliver the service.
Meanwhile, project-based revenue is less frequent but has much larger tickets.
$5k, $10k, $20k per project.
You don’t need many of them to be profitable.
10 projects at $10k = $100,000 monthly revenue.
But every day you need to go out to earn it.
In my coffee/smoothie franchise, had had "on-demand" sales with an average ticket of $9.50. But then we got into catering, which had an average ticket of $575. Some jobs were big ($10K+), while others were small ($375).
We had re-occurring revenue when existing customers return for additional coffee/smoothies in the store, as well as when existing clients re-booked us for catering jobs.
All models work. It’s about understanding the tradeoffs.
Recurring revenue is a long-term game if you’ve got patience and capital.
Project-based revenue can be a quicker path to significant cash flow.
On-demand requires you to be ready to handle whatever comes at you.
There are many great franchises that offer the combination of recurring revenue + projects.
When you evaluate franchises, don’t just look at "recurring vs. one-time" as better or worse.
Look at:
Average ticket size
Time to profitability
Ease of operation
Plus, a lot more. Aren't you glad you don't have to figure out your perfect franchise match all alone? ;)
#YouGotThis
Stacey Riska, your lifestyle matchmaker 😊 helping you "do what you love, love what you do"!
P.S. Spend time with people who fit your future… not your past.