recurring business ideas
Last updated on February 22nd, 2024

Recurring Business Ideas To Inspire You

If you own a company, you know that one of the hardest things you can do is generating recurring revenue for your business. It feels like a perpetual uphill battle to create a steady stream of sales.

But there are many benefits of recurring revenue that make the effort worthwhile. However, many companies focus on simply attracting new customers.

For those relying on recurring services that is certainly important, too. But each customer also has the potential to stay for a long time. This results in them generating a steady cash flow, and referring your business to others.

To succeed with your subscription business, find an idea that matches your skills and interests. Let’s explore various recurring business ideas through which you can accomplish this.

Advantages of the recurring revenue business model

The recurring business model is based on a simple principle: instead of relying on one-time sales, businesses focus on providing products or services repeatedly. This can be in the form of subscriptions, a membership business, or regular maintenance services.

Virtually any type of business and industry can work on a model where customers pay monthly or yearly:

  • eCommerce (with subscription boxes)

  • software (with the as-a-service model)

  • streaming services

  • fitness and wellness (with memberships)

  • personal care (with monthly product boxes)

  • food delivery (with subscription meal plans)

  • cars (with subscription-based car rentals)

There are many benefits to the recurring payment model, both for businesses and consumers.

Predictable and stable revenue

One of the biggest advantages of creating recurring revenue is that it helps you predict next month’s revenue. This refers both to hiring talent to grow your agency dream team, as well as spending your budget on marketing.

SPP admin dashboard revenue report

With traditional one-time sales, businesses often experience fluctuations in their monthly or annual revenue. This can make it challenging to manage cash flow and plan for the future.

Increased customer retention

Another advantage of recurring business models is that they often lead to increased customer retention. When customers are paying subscription fees, they are more likely to continue using the product or service, leading to a higher customer lifetime value. This also means businesses can spend less time and resources on acquiring new customers.

Opportunities for upselling and cross-selling

With recurring revenue comes regular touchpoints with customers. This provides businesses with opportunities to upsell or cross-sell additional products and services.

SPP messaging clients to upsell services

For example, a website optimization agency could offer their client to handle the web hosting, and improve the speed of the website that way. Upsells can lead to increased revenue without the need for constantly acquiring new customers.

Better understanding of customer behavior

With recurring service business models, businesses have the advantage of collecting ongoing data and insights about their customers. This can help them better understand customer behavior, preferences, and needs, which in turn can inform product or service improvements and marketing strategies.

Increased flexibility

Recurring business models also offer increased flexibility for both businesses and consumers. For businesses, it allows them to adapt and pivot their offerings more easily based on customer feedback and market trends. For consumers, it provides them with the option to pause, cancel, or change their subscription at any time, adding a level of convenience and control.

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All in all, the recurring revenue business model comes with a lot of benefits—and if nothing else proves it, the growing revenue in this industry is quite revealing. The subscription economy is forecasted to reach $1.5 trillion in 2025.

5 recurring revenue business ideas

A recurring revenue service business idea exists for pretty much everything, from handmade shoes to corporate security. Let’s look at the best types of recurring revenue below.

1. VIP model

The VIP model is straightforward: to get the VIP treatment, customers need to get a plan that charges on a recurring basis every month. As long as they are subscribed to it, they can get access to certain services.

BandsOffAds VIP Club

The main advantages of this model include that it:

  • provides a sense of exclusivity and special treatment for customers

  • encourages upgrades and increased revenue from loyal customers

  • makes it easier for businesses to attract top-of-the-funnel leads and prospects

  • builds trust with consumers/readers/subscribers because they already know your free or low-cost product/service.

The disadvantages and challenges of this type of model include:

  • it’s not ideal for all types of businesses, particularly those that can’t offer a VIP experience or tangible benefits.

  • it requires careful segmentation and targeting to ensure the right customers are being upsold to.

  • it’s not a one-click-to-million dollars model because it requires hard work, strategy, and consistency to be successful

Examples of such businesses include:

  • Bands off Ads: a subscription-based video editing service where the VIP membership brings you a lot of perks, including exclusive access to products, 50% discounts, etc.)

  • The New York Times: offers a free, limited number of articles per month, and then encourages readers to subscribe for unlimited access

  • Substack newsletters: independent creators can set up their own pricing model and charge their newsletter subscribers

2. Recurring services

Most of the recurring service-based businesses revolve around a simple idea: productized services. If you run a cleaning company, a web development agency, or a social media marketing firm, you can offer recurring services to your clients. The most common type of recurring service is a retainer contract. This is where the client pays a fixed amount each month for a set number of hours or tasks.

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The advantages to this model include that it:

  • provides consistent and stable income for service-based business (which was, traditionally, one of their main challenges)

  • establishes a long-term relationship with the client, leading to potential upselling opportunities

  • allows for better planning and budgeting for both the business and the client

  • makes it more likely for customers to recommend you (as opposed to one-off customers, who might not trust you enough to recommend you to their peers)

The main challenges and disadvantages of this model are:

  • businesses need to carefully manage their time and resources to ensure they deliver on their retainer agreement without overworking themselves

  • clients may have difficulty understanding the model, what each package includes, and why they should pay a fixed amount each month

  • not every service can be productized like this (e.g., if you run an agency doing paid ad campaigns, it might be difficult to offer a fixed number of hours each month)

Examples of businesses that use this model include:

  • Legal services: where clients pay a fixed retainer for ongoing legal advice and support

  • Video production services: like Vidpros, for example, which offer monthly video editing packages

  • Virtual assistant services: offering monthly subscription packages with a set number of hours for administrative support

3. Software as a Service

This is, perhaps, one of the most famous recurring revenue models out there. From Salesforce to Service Provider Pro, it seems everyone’s dipping their toes into the SaaS waters—and for a lot of good reasons.

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The biggest advantages to building a recurring SaaS business include:

  • no need for office space, you can develop a digital product

  • low cost of entry for developers

  • usually large profit margins

  • high appeal for investors

Another advantage is that, thanks to the subscription-based model, you don’t have to keep creating a new product each month. The business can focus on improving and adding features to their existing one.

But it’s not all sunshine and rainbows. Here are some of the biggest challenges when building a SaaS company:

You need:

  • coding knowledge or money to hire coders

  • marketing skills or money to acquire customers

  • UX/UI skills or money to ensure your product is easy and enjoyable for people to use

  • to maintain and grow your SaaS business, not let it stagnate

You also must ensure you engage your customers enough for them to stay loyal and not churn.

Examples of SaaS businesses include:

  • Service Provider Pro (provides client portal software for productized agencies)

  • HubSpot (offers a variety of subscription-based services, including CRM, social media management tools, and more)

  • Canva (offers a free version with limited features, but encourages users to upgrade to their paid subscription services for access to more templates and features)

4. Community

Online communities are making a comeback—and a pretty profitable one too. According to some studies, almost half of all membership sites make a six-figure income every year.

The Agency Collective Community

Membership communities make an interesting and beneficial proposition to anyone looking to build a recurring revenue stream.

Here are some of the main advantages and benefits:

  • a sense of belonging for members, which leads to increased engagement, loyalty, and retention

  • access to exclusive content and resources that non-members don’t have access to

  • the community can serve as a sounding board for ideas and feedback on products or services

  • potential for upselling existing members

  • opportunity to build products, merchandise, and other streams of income

  • low cost of entry (building a membership site can be done with less than $100/year

Online communities are not a business model without its challenges:

  • difficult to grow an online community (particularly since there’s a lot of noise out there)

  • managing an online community can be hard too (because of trolls, spam, and other types of unwanted behavior)

  • you need to have enough content, activities, and resources to keep your community engaged

Examples of companies that use this model include:

  • The Agency Collective: an online community for business owners to connect, learn, and grow together

  • Elpha: a community for women in tech, with a paid membership option for extra features and resources

  • Patreon: a platform that allows creators to connect with their fans and earn recurring revenue from subscriptions

5. Online courses

Online courses are evergreen content. With good know-how of a topic, some video editing and/orwriting skill, and a bit of time to make sure your courses are up-to-date. This is one of the few recurring business models that are as passive as possible.

There are multiple ways to sell online courses too:

  • you can build your own website (using platforms like Teachable or Thinkific),

  • sell them on platforms like Udemy, or

  • create a course and sell it through your own email list.

Here are some of the biggest advantages to creating online courses:

  • low cost of entry (compared to physical products, for example)

  • high profit margins (once created, there is minimal upkeep compared to other recurring revenue models)

  • potential to reach a global audience, increasing your potential customer base

  • can be sold multiple times without additional effort

Challenges of creating online courses include:

  • requires knowledge and expertise in a specific field or topic

  • competition can be fierce, so marketing and selling your course may be difficult

  • the market is constantly changing, so courses need to be updated regularly to stay relevant and valuable

Examples of businesses using this model include:

  • Skillshare: a platform for creatives to learn new skills, with a subscription-based revenue model

  • MasterClass: an online platform where experts in various fields teach courses on their specific

  • Copyhackers: a famous conversion copywriting course

What is the best recurring revenue business idea?

The five examples presented above only scratch the surface of how large, diverse, and generous the recurring business model can be. Ultimately, it’s up to you to determine which idea aligns best with your skills, interests, and goals.

If you’re looking to add a new stream of recurring income, building a SaaS might not be it. Unless you plan to dedicate yourself to it part-time until you can switch to making it your full-time occupation. Similarly, if you don’t have experience or expertise in a particular field, creating an online course isn’t a viable option.

Do your research, consider your strengths and resources, and choose the recurring business model that fits you best. With dedication, hard work, and a bit of luck, any one of these models can lead to long-term success and financial stability.

Remember it’s not magic, though: passive or not, recurring businesses need strategic thinking, innovation, and constant effort to keep them afloat. So pick one that you’re passionate about and get started on bringing your recurring business idea to life.

Avatar of Chris Willow
Founder of SPP
Chris started Service Provider Pro back in 2014 as a way to help automate a video production agency he was running at the time. Being early to productized services, he was frustrated with having to piecemeal different tools and services and ended up building an all-in-one client portal platform for himself and a few friends. That eventually took off and now Chris helps agency owners scale through software and systems.

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