In an ideal world, your business would sell a product or service that can be delivered either completely by staff, by outsourcing or digitally. I want you to think about ways your business can charge a monthly fee, either in addition to, or instead of a one off fee. A classic example of this is…
Hove based accountants, Bainbridge Lewis (www.bainbridgelewis.co.uk). They could charge an annual fee like most accountants, but instead they take the entire annual fee and split it over the year into monthly payments. This makes cashflow far easier to manage as you don’t end up with fluctuating months of good and bad income. In addition, it’s much easier to predict business growth, plan your business investments and other finances.
A new way of thinking
Consider how you are billed by most other firms; Your website, your office rent, bills, utilities – they’re all monthly. If it’s even remotely conceivable that you can attach a monthly cost to your service then you should give it some serious thought.
If you don’t want to re-think your pricing model, then how about creating a new product entirely to cater for it? You will be putting yourself in good stead to deal with any dip in sales in the future and really solidify the business.
In John Warrillow’s book, ‘Built To Sell’, he talks about the idea of building your business as if you are trying to sell it even if you don’t have any intention of doing so. A good example of this is my brother Rob’s business. He runs a video production company called Silver Lining Productions. They create amazing short films which tell the stories of their clients’ businesses in creative ways.
Rob sat down with Tim Coe, the USP Pro to create his Utterly Seductive Proposal and what they found was that Rob’s business could be built around weekly distributed videos, filmed in bulk, that build an audience for his clients. They called it YouTube Weekly (www.youtube-weekly.com).
This service has a £495 monthly fee for shooting in 1 session then they edit the videos and distribute them over the month. At the moment, Rob works with each of his clients privately but he could easily bring in an editor to do that portion, or a camera man depending on whether he preferred shooting or editing. It’s a fantastic shift from being a required part of the job, to selling an end result which is repeatable.
You can do the same sort of thing. Want another example? Socks? Boxer shorts? Condoms? You don’t think you can turn those into a monthly revenue model? Of course you can. Manpacks.com created a business that sends you a monthly supply of a range of different mens’ items for a fixed monthly fee.
Just keep it in the back of your mind and consider how you could turn what you do into a monthly revenue model. If you are stuck for ideas, make an appointment and put me on the spot and challenge me.