Recurring income can create cash flow-generating assets in your service business. This will help your profits to continue to pour in while eliminating stress about payroll, especially during the slower season.
Subscription Based Services
One approach is to offer subscription-based services that provide ongoing value to your customers. Some companies I know have done a ‘rent to own’ type service. To set up a subscription-based perk business, you will first need to identify your target market and what services you will offer as part of your subscription model. For example, customers could get X number of air filters for HVAC businesses, seasonal flowers planted four times a year for landscapers, or drain unclogging liquids//hair-removing tools for plumbers. Next, you will need to establish a pricing structure and determine how often customers will be billed. You will also need to set up a system for managing customer subscriptions and ensure that you have the necessary resources to fulfill customer orders regularly. Additionally, you may want to consider offering incentives or rewards to encourage customers to sign up for your subscription service. Finally, you should develop a marketing strategy to promote your new business and attract customers to one of your cash flow generating assets.
You could also consider offering maintenance or support plans for your services, which would provide ongoing revenue and help to build customer loyalty. Setting up maintenance plans for an HVAC business (as an example) involves several steps.
First, identify the equipment that needs to be maintained and the frequency of maintenance required. Next, determine the pricing for each plan based on the scope of work and labor involved. It is also important to establish a system for scheduling appointments and tracking maintenance history. Additionally, consider offering incentives to customers who sign up for annual or bi-annual maintenance plans. Then market the maintenance plans through various channels such as email campaigns or social media to attract new customers and retain existing ones.
You can have maintenance plans for each trade line you have and even bundle some packages together for more savings (for the customer), and more guaranteed revenue for your business.
Another type of cash flow generate assets is a membership program that offers exclusive access to special services or discounts. To set up a membership program for a service business, you should first consider what benefits you can offer to your members. These benefits could include exclusive discounts, access to special promotions or events, priority service, or personalized support. Next, determine the pricing structure for your membership program and how often members will be billed. You should also establish clear terms and conditions for membership, including any cancellation policies or penalties. Lastly, create a marketing plan to promote your membership program to your target audience, and make sure to track your results to continuously improve your program.
This helps your customers spread out the payments. So instead of doing a one-off large payment, they can pay you a retainer ahead of time. They are then guaranteed to use your service. They can use your service ongoing for various projects and you don’t have to quote them each time. They have you on retainer. If you offer a discount for these retainer packages, it will give them a great incentive to choose this option!
Always have some easy-to-say, yes-to ‘add on’ services. It gives you an instant boost to any sale and provides your customer with more value. Think about what products and services you have that complement each other. Think McDonald’s ‘Would you like fries with that?’. We all know it works!
If you’d like help figure out which of these cash flow generating assets are best for your service business, schedule a discovery call here.