At the start of every business venture, it is normal to see the business owner trying to put things in place for the business to thrive.
He looks for funding when he’s not financially buoyant enough to self-fund, seeks advice before localizing his business, brings in the best of equipment not minding the costs involved.
He also invests in some essentials – like an industrial heating blanket for curing factory composite materials, websites for digital promotion, and heating blankets for other curing and thawing purposes – just to make sure the business has everything it needs to succeed.
But at the point of doing all these, not one business owner would ever entertain the idea of closing down the business eventually. Not with the amount of money, time, and effort invested.
However, the harsh reality is that businesses fold up, ventures liquidate, and companies go out of business.
Why? Many people might be quick to point out poor business planning and inadequate capital as the major reasons behind business closure.
But the truth remains that the top reason for closing a business is actually lack of profits, according to the Global Entrepreneurship Monitor.
So, now that we’ve pointed out the number one cause of business closure, how can a business owner protect his venture from becoming a victim of this unfortunate doom?
The answer isn’t farfetched; businesses simply need to turn enough profits if they want to stay in business.
And turning enough profits starts with generating enough revenue – the kind that keeps on flowing and consistently covers your overhead.
But instead of wondering how you can make enough profits to keep your venture in business, the right question should rather be: how do I find recurring revenue? To this end, here are five strategies you can start using today.
Customer Satisfaction is King
There is no shortcut to revenue generation; if you want it, you simply have to go look for it.
And in a business, there is only one place to look – customer satisfaction. If you want to experience high turnover in your business constantly, you need to always ensure that your customers are constantly satisfied with the services they are getting from you.
Not only will this encourage your existing customers to refer your brand to friends and family, but it will also ensure that sales never drop.
The key to building recurring revenue is to move away from the idea of providing customized service to everyone who wants to work with you and standardizing your offerings a bit.
A good practice would be for you to look for ways to create a system that suits you and your core customers and then seek out others like them. If you basically try to provide solutions to everyone who comes to you, you’ll never create a solid business.
All you’ll be doing is providing your own personal service. And quite, unfortunately, that’s what most solopreneuers are doing these days.
Recurring revenue generation is all about consistency. The more the cash inflow, the greater the revenue generation, and of course, the larger the profits turned.
Although it may be tempting to depend on just one client who sends you loads of work or brings you a lot of trades, you don’t want to stick with that if you’re aiming to enjoy recurring revenue.
The reason is that that can leave your cash flow at risk if the source dries up. To keep your business cash inflow steady and constant, you’re advised to double up on your income sources by diversifying your income streams.
Decrease Direct Costs
When you’re looking to generate more revenue with the sole aim of making more profits, cutting down your costs and expenditures might be another great place to look.
Not because costs will directly translate into more profits, but when you reduce your business expenditures, you invariably hack down your cash outflow.
If you work with suppliers and other third party agencies, go to them and ask for a discounted or reduced price offer, and if they are not open to reasoning, do not hesitate to change them.
By and large, look into your direct expenses to see which ones can be reviewed; trust me, chances are there are so many expenses you can hack down, you only need to review them to know which ones.