Sara Dunn

Web Agency Owner + Specializing Enthusiast

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November 13, 2018 By Sara Dunn · 2 Comments

Why Recurring Revenue is Key

In my last four videos, I’ve been sharing the things that I’m afraid to tell you. This week, I’m back with something I have no fear around sharing.  In fact, I want to shout it from the rooftops.

I decided to talk more about this after my confession from last week, which was around how only a very small percentage of my income this year has come from my niche business. Even though I am hustling hard, feeling successful, and booking projects, that small niche part of my business is still small.

So you might be wondering… where is revenue coming from as I’m making this transition from generalist to specialist?

I don’t want you to think specializing requires a huge financial hit (if you set yourself up right).  My agency hasn’t been down on income while I’ve made these big shifts. In fact, this is likely to be our most profitable year yet.

How?

Recurring revenue.

While I’ve been out launching new things, messing around with webinars, pitching myself for podcast interviews… 37% of my company’s revenue has come in from recurring revenue from retainers and ongoing service packages.

It was several years ago I realized that it’s a much better situation for my agency and our clients if we work together on an ongoing basis.  After their website project is launched, we continue on as their website partner with an ongoing maintenance package. This is a great situation, because we continue to maintain the website, manage updates, help them with their hosting, and make ourselves available for questions. It also means that every single month, we’re bringing in revenue from our clients to support them for those services.

Having a solid basis of recurring revenue allows us to take bigger risks and make bigger shifts without worrying about where every dollar is going to come from, or worrying (too much) about saying no to some of the work that isn’t in our wheelhouse.

Recurring revenue is something that I definitely want to focus on in my niche as well. My mind is already spinning on some ways that we can make recurring revenue in my specialized wedding search engine optimization business, and it will continue to be a big focus of mine in the future.

I would love to talk about this topic more. If you’re interested in learning more about how we structure maintenance packages and how I might recommend that you do it too, I would love to hear. Send me a tweet, or write a comment here, and I would be happy to share.

Filed Under: Specializing a Web Agency

About Sara Dunn

Founder and Project Lead at 11Web. Constant tinkerer. Going to figure out this specializing thing. > Twitter · Instagram

« Things I’m Afraid to Tell You #4: Income
2018 Year in Review: Peaches, Pits, and Fuzz »

Comments

  1. Joshua says

    December 4, 2018 at 1:46 pm

    Awesome, Sara! We currently have about 80% of our income tied into MRR and the rest is mostly additional projects from those clients with only 1-2 outside. But I’ve been working on breaking into an entirely new area of creative doing Social Ad Campaigns (because it requires knowledge of social, data, web, marketing, and creativity). Right now it’s about 25% of our overall but trying to turn the niché into larger MRR is a challenge! How do you go about demonstrating value to clients that don’t fully understand? Is it convos or white papers or videos and resources? Or a combo of all of the above? Thanks!

    Reply
    • Sara Dunn says

      December 10, 2018 at 7:37 pm

      Thanks for your comment, Joshua! Love hearing that you’re growing your recurring revenue. If clients aren’t understanding the value, the best thing you can do is use case studies. Show them the value that similar businesses have received from your services so they can understand the potential. They will be worth the time!

      Reply

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