122: My Top 5 Sources of Recurring Revenue

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This is your time. How can we earn twice as much in half the time with joy and ease while serving the highest good? That is our guiding question here at the Freetime Cafe, your home for heart based business. I'm your host Jenny Blake. Join me for conversations with authors, friends and fellow business owners as we explore ways to free your mind, time and team to do your best work. Now onto today's show.

Hi friends. Back in episode 112, I shared my three biggest business regrets. One of them was not creating a flagship course that I could go all in on instead of creating all these different courses over the years. After that episode went live and I was pondering, I thought, you know, in a way I did do that, but just on the B2B side with corporate licensing for pivot programs. So it sparked the thought. I shared three big regrets or strategic errors, what I could have done differently. And on the flip side, one thing that I have been really intentional about is creating recurring revenue in my business. That has been really important to me because I realized that the launch model just exhausted me as much as I could. I tried to focus starting in 2015 and create three. Although it has expanded to five, three main streams of recurring revenue. Whether that was corporate licensing, coaching, or my community, everything was billed on a recurring basis. Before I get into the details of how I set those up, I really want to give a special thank you to Daily GC from the US who left a review on July 21 that made me smile so much that as I told Michael, I said, oh, a review just came in. He got out his phone, started filming me as I read the review out loud. And then he posted this on my internal family photo album. We use iphotos and that way the extended family can kind of see what each other is up to. And so I just want you to know, Daily gc, that this review sparked a lot of joy and there's even now a video of me reading it and that my family living all across the country could see. So thank you so much. It starts by saying Joyful Solutions for Entrepreneurial Overwhelm. Can I give six stars that's when I about fell out of my chair. In the universe of entrepreneurial overwhelm, Jenny and her guests consistently offer relevant, actionable nuggets to help you achieve focus, clarity, and results. If you need a compassionate guide to get you through the messy middle or to rearrange the fragments of your next great work, this is the place. Many episodes such as Building a Second Brain, Shout Out Tiago, and How to Start Writing a Book course or Workshop offer roadmaps that are worthy of a second listen. You will be joyfully grateful. Thank you Jenny. And I gotta say thank you Daily gc. Truly, this review was a gift that keeps on giving. Thank you. Thank you. If you're enjoying the show, the best way you can help out is send this episode to a friend with that, let's get into it, shall we?

Let me give you the lay of the land first. I still do have about 10 plus streams of income in my business, but some are much more active than others. So there are five sources of recurring revenue and then there are some one off sources as well. Under the recurring bucket in order of how much revenue they produce. There's corporate licensing. Right now it's pivot programs, so I didn't get any new clients during the pandemic, but I have two that have been with me on retainer recurring annually every year now for about five years. So corporate licensing is a really joyful source of revenue. I love it because it means that these companies can roll pivot out globally without just relying on me coming in to speak. Corporate licensing makes up about 60% of my income and that area of the business is a bit fragile because 60% coming from only two clients, well, that would get a tsk tsk from writers like John Warrilow in his book Built to Sell. You never really want to be relying on just a few big fish clients that provide that much revenue because of course if one decided not to renew, it would have a big impact on the business. That said, I'm not complaining. I'm so grateful for these two and I do hope to land more. It's just I had some big contracts get canceled when the pandemic hit and we're still kind of in odd financial times. I'm also excited about exploring free time and licensing that to companies too, but it's going to take a little more work to really see where it fits. The second recurring stream of revenue is coaching, and that's all through subcontractors at this point. Every now and then I'll do something like my voxer coaching experiment. I'll put the link to that in the show Notes. That's been super fun this summer. Coaching, we bill on a monthly retainer. So that's where there's pivot coaches and free time coach that if you want to get one on one coaching, we bill on a monthly retainer. Good until canceled. And the coaches and I split 60, 40, so the coaches get 60% and the business and I keep 40% for marketing and operations and managing the back end of all that. Something I want to share about coaching is that even when I was taking one on one clients, one of the best things I ever did in my business was switch from project based billing where I would bill for a three month package or six month package. I never knew who was getting billed when and the packages would extend and it was total chaos. So one of the best things I did was switch to monthly recurring billing. I would bill all my clients on the 1st of the month and I got to the point in terms of batching calls where I would have four clients at a time and I would only meet with them on Thursdays. So I might have four calls on the A week of the month and the C week of the month and that was it. So then the rest of the month I could at least have two full weeks without meetings if I wanted to set it up that way. And it got to the point where I would say sometimes to new clients, I only coach on Thursdays. If that doesn't work for you, I'm happy to recommend somebody else. So not only batching the billing on a monthly recurring basis, good until canceled again, no minimums. Some coaches don't like that because they feel like there's a bigger investment that they put in upfront. What I liked about it was that it kept both of us on our toes. It meant that every month I wanted to make sure that the clients were getting tremendous roi. And knowing they could cancel at any time, but also telling them some of my clients have been with me for three years and counting was a nice way to set that. There is no expectation that when they would sign up for a three month package, they just assume that they're done after three months. Sometimes that was the case, but other times we would shift the nature of our coaching and just keep doing more and more great work together. So having this extended group of coaches is the second stream of recurring revenue in the business and then the third is my private community. I have had this for seven years now. It's changed and morphed over the Years you've heard me talk about it. It's called BFF now. At the moment. It used to be called Momentum. Momo for short. Brilliant Sparta before that. This has been one of the most joyful sources of recurring revenue in the business and licensing is very lucrative. I love it. I love working with big innovative organizations and having the private community where I jam with fellow solopress preneurs has also been so rewarding and I really do enjoy having the balance of both. Sometimes it's a little tricky because I'm not going all in on one type of client. I will have Fortune 5 companies that I work with and then I'll have the Fortune 5 million, as the founders of Basecamp would say, where we're working together in our community of heart based business owners. So BFF has been super joyful. And what I love about the recurring revenue model in terms of private community is there again it really rewards content and quality. There's a great book called Subscribed and they talk about how the model of paying community or software services is that you do need to keep providing value over time. It's not like you sell someone something once and then the transaction is done. Private community is about building relationship over time and then each new person brings something valuable to the community. The value of the community grows and grows over time, not just as the content archives grow and grow, but as the relationships between people grow. We have a really special group who's engaged and generous and so this has been a really joyful source of recurring revenue. Coaching and community both account for, well, when you compare it to corporate licensing, probably just 5 to 10% of overall revenue. But those amounts are significant and they do help pay for my team, they help pay for software services. So they really do provide a valuable function in my business. In addition to the joy aspect, the fourth stream of recurring revenue is video and book royalties. I'm kind of laughing because I was going to say this is passive in that I don't necessarily do something every month. Primarily I have five LinkedIn learning courses and so I will get royalties from those every month. And then book sales. And that could come from any of my three books or the audiobook. It just depends, you know, each book is in a different state of royalty and in a different sales pace. Sometimes the checks are quite tiny, like for life after college I might get a check for $25, you know, because there's less activity happening around that book that came out 10 years ago. But I'm laughing as I call this fourth one video and book realties passive because creating this IP was not passive at all. So it's kind of a misnomer, but it's a lot of effort up front. And then what is nice is that those royalties can come in in a passive way after that. So it's just an asymmetric effort map because it's so much to create. But then the reward is having anything that I do that promotes those books or those videos brings in royalties each month.

We'll be right back just after this.

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The fifth source of recurring revenue is teeny tiny at the moment, but it exists and I'm counting it. Podcast Ad Revenue as you may know, when I launched Freetime In March of 2021, I moved both of my shows over to the Megaphone platform. It does cost $99 a month, but it enables me to have dynamic ad insertion, whether from our own promos. Meaning I can advertise something that might be launching at a certain day and time across the whole backlist of my content and then it doesn't have to be baked into the episode. It also allowed me to opt into the Megaphone ad network and now Megaphone is owned by Spotify. So whenever you hear ads on this show, maybe you're annoyed, but I get kind of giddy because it means that I didn't need to do host red ads. But hopefully you're still getting exposure to interesting products and services. I have the parameters set really tightly, so no alcohol ads, no gambling. There's just stuff that I don't vibe with that I don't want advertised on this show. But the Other day I laughed out loud because there was an ad for the show Love island, which is probably my favorite guilty pleasure TV show that I had just written about in Pivot List two weeks prior. And then there was this ad showing up on free time. My ad revenue last month at the time that I record this was $300. So I do get a little deposit every month. Right now that's a net of $200 because I have to pay for the Megaphone software, not to mention the whole production team. So the podcast itself, if you don't count the extended products and services that any of you might engage with beyond the podcast. So the podcast itself, we cannot totally call it profitable. But I get so happy when I see that deposit from Megaphone because I think to myself, all right, it's $300 this month, but that means that it can grow. It could be 3,000 one day, it could be more than that. Even. So I'm not trying to be greedy about it, but I just get really excited when I see that something I'm doing is working, even in a tiny way, and that every month, sure enough, there are deposits being made for me doing no extra work. And if I ever did bring on host red ads, I could charge more and I could make more, which I am trying to do. I only want to talk about companies that I can authentically rave about, but I'm starting to reach out to some of my favorites like Notion, Zapier, Kajabi. These are the ones that I'm already obsessed with. And so there could be some nice win win partnerships on the podcast front. Those are the five sources of recurring revenue in my business. I would say that I focus most actively on growing the private community. Coaching kind of happens in the background. Licensing the existing clients, renew annually, and then any new clients. It's a little more of a long dance trying to land a new licensing client that often results from having a series of successful one off speaking gigs. So let's talk about the one offs because there's about five more streams of one off income in the business. The newest that I'm most excited and just thrilled about is the Free Time Operations Dashboard. This isn't recurring revenue because you're basically buying a done for you dashboard to run your business. And so unless I'm doing a big launch for it, it's kind of unpredictable who's going to purchase that and when. But it's so exciting when someone does purchase the dashboard because it's, it's relatively passive. I've already created the product. And yet I know how much it can absolutely change somebody's life, change their business, change the way you work with your team. So the dashboard is just super exciting because it's at that intersection of something that I love to build. I make it better every day, every week as I learn new things in notion as people request different templates for things I'm doing in my business. And it's just so rewarding when I get an email and I haven't done anything and a dashboard sale comes through. And I just love helping the dashboarders get up to speed. The second one off that I've been really enjoying lately is Voxer Coaching. This is where I took on a small handful of clients in a way that I worked with a coach in 2020, right after the Pandemic hit, where they get to submit one question a week via Voxer. It's kind of like a walkie talkie app and I answer before end of day Friday. We're currently in the first cohort for a three month Voxer coaching and it's so fun. I love that it doesn't involve anything new on the calendar. People can leave their big question for the week at their convenience and then I get to ponder, crock pot and answer them in a way that hopefully provides a lot more food for thought and detail and recommended resources if you ever want to join for a future cohort. I'm very likely to do this again because it's been so fun and I hope impactful for everybody who's participating. You can always add your name to the wait list@itsfreetime.com Voxer the third one off is affiliate sales. So if I recommend software like Kajabi, I have an affiliate link. Or if a friend is running a big launch like I've been an affiliate for my friend Dori's recognized expert program in the past, something I really believe in. Then I will often have an affiliate link, even links to books on Amazon. If I put it in the show notes, there's affiliate links for that from Amazon. I probably get who even knows, $30 a month, $100 a month max, because I use affiliate links for my books as well. But it's still something. I can't call it recurring. Let's say affiliate sales do come in every month, but the level is variable so I don't know if you want to put that in the recurring category or the one offs. I tend to put it in one offs because it's just kind of random when an affiliate sale comes through. Another example of affiliate sales when I said in the episode 112 on my three big business regrets, one of them being not having a one flagship course for, let's say B2C beyond licensing to companies.

I actually just decided I didn't really have the energy to create my own flagship course when Pivot was coming out. I don't know, it just wasn't where my interest was. I did create some courses for LinkedIn learning and I'm so happy that that content is on their platform. But my friend Adrian at A Path that Fits, he was featured in a recent episode over there. I'll put the link in the show notes he has a flagship course and he has been improving it over many, many years. So I'm just as happy to be a partner for his course and send my people to him knowing that they'd be in such great hands. And then over the years my affiliate commission for that has been about 300, $350, which is great. It's not me doing my own launches, but it means that when I'm recommending a group coaching program or Pivot coaching or somebody who wants support navigating their next moves, I send them to a trusted partner. I don't really need to do any of the work in terms of building, maintaining and enrolling people in that course. And then still, it's nice referral revenue share for those. The last two one off sources of income are keynote speaking and Train the Trainer. Keynote speaking has been so wonky the last few years. It is kind of cool that so much has shifted to virtual because now you don't even have to leave the house to do a keynote. But at the same time I'm still noticing a lot fewer events and a lot fewer people and organizations planning into the future because everything is so uncertain right now and people are clamping down on budgets. So keynote speaking has been very uneven, very lumpy in my business, but it's always joyful when those events come in. And then Train the Trainer is kind of a hybrid stepping stone between keynote speaking and licensing, where I'm going into an organization and I'm doing a one or two day Train the Trainer of how to deliver Pivot material and I will build it for free time as well. Train the Trainer is usually paired with licensing, licensing the actual IP that those trainers would be delivering, but it's not billed on a recurring basis. So for example, if a new company wants to license Pivot in the year ahead, we might kick off with a two day Train the Trainer and I'll share with you my pricing even though I haven't done one in a while. For example, that might be $3,500 per person that I'm training per trainer and then licensing can be billed on an unlimited basis. Let's say our deal size is 150,000. You can roll this out unlimited times in the year ahead. Or some people price per participant. So every time one of your trainers runs the pivot course it's one 97 per end participant. If you're going to do the latter, I would recommend a minimum number of participants. So for example, you say it's 197 per person or 97 per person with a minimum of 1,000 seats. Something that gives them skin in the game and then also is enough for you to do all the upfront work of setting up licensing in the first place. The one source of income that I didn't mention here are VIP days. I really enjoy these. I just haven't done one in a while. Though there is an offering if you want to do a VIP day with me to set up your free time operations dashboard. That's really fun. It's where we roll up our sleeves and we will implement and customize the dashboard to be exactly what you need it to be. I love how Jordan Gill calls these done in a day VIP days and she has some great resources on this. I'll put the link to her website in the show notes. I love how Jordan describes her journey of moving from having all these coaching clients that she was trying to keep up with to trying to schedule four VIP days in a month. And it depends when you're just starting out. Maybe it's $5,000 for a VIP day, but if you can fill those four slots, you're helping somebody get done in a day without stretching something out that they want to do in their business. And you can start to predict and have really joyful income on a more consolidated just a few days a month. Well, that about wraps up this overview of the recurring revenue streams in my business and some of the one offs. Of course there's always random things that come in and things do ebb and flow and change. I highly recommend the Flywheel monograph by Jim Collins. I'll put the link in the show notes and I did a pivot episode on this as well that I'll throw in the show notes right now with a lot of those streams being relatively passive. I'm focused on building the flywheel of the content side of the business and so I love creating and this is Why I have two podcasts because they're each their own little universe. Sometimes people ask me, why do I have two? Or why do I still have two? Why didn't I just rename the Pivot feed to my new thing? But Pivot is a whole ecosystem. There's the book and the podcast, and if people enjoy those, they can engage further. They can join a private community, they can take the LinkedIn learning courses, companies can roll it out. It's this Thai ecosystem where everything benefits from more and more exposure and word of mouth and then the same thing for free time. Not every Pivoter is going to become a business owner, but if you are a business owner and you're here or you want to be in your learning, then free time as well. There's the book and the podcast. And as word of mouth for those grows, or I do activities to go promote them, then ideally for those who really resonate, it does encourage you to join us in the private BFF community or to implement the Done for you dashboard or for companies hopefully to look for ways to scale and engage and teach this to their team members too. So right now, my focus, because a lot of the streams are relatively passive, I'm able to have the privilege of trying to double down and grow the podcast and grow the base platform of it all so that there is more leverage. And if I were to grow something like this podcast to 10x the size, I would be doing the same amount of work. That's what I find so powerful about the idea of platform size and growing the base platform, of course, while still staying true to my values and to those who really resonate with the content. But if I had 10x the number of listeners, I'm not doing any more work. I'm still producing two episodes a week. I'm still sending out the weekly time well Spent newsletter. You know, none of that actually changes. So then it just grows the recurring revenue without me actually doing more work. So that's what I'm really curious about at the moment on this front and that kind of gives you the arc. My journey from 2015 deciding one off launches are too stressful. How do I build in recurring revenue? And again, the mainstreams are corporate licensing, coaching and community. I hope you found this helpful. I would love to know if you have any super joyful recurring revenue streams in your business that you'd like to share with fellow free timers. You can always send me a note@hitime.com thank you so much for being here. Listening everybody. Have a beautiful rest of your day.

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