The Offseason Book: Chapter 6: Recurring Revenue (Cure 4)

Chapter 6 recurring revenue when I met Peter from Thrive Lawn Care in Illinois, the air still carried the chill of early March. The grass hadn't yet begun to grow, and neither had his revenue. On paper, his business had done $200,000 in the past year. Two trucks, four employees, plus an admin. Something wasn't adding up. Peter met me in his driveway, his eyes heavy with the kind of exhaustion you can't sleep off. His wife was pregnant, weeks from having their third child. He had not received a paycheck for almost a month. $17,000 in business loans, 9,000 more in credit card debt, racking up interest like a ticking time bomb. He had less than $500 in the bank. He was holding everything together with duct tape and faith. I noticed some common issues. High marketing spend with no return, employees not respecting him, unclear pricing and a website that needed improvement. But as I dug deeper, I realized these weren't the roots. They were the weeds. The real rot was hiding underground. Three months of every year December, January, and February, his business flatlined. Revenue dropped by 90 to 95%. He let go of his crew. He had no winter services, no side work, no strategy to survive the off season. For a quarter of the year, Thrive Lawn Care became a liability not only for Peter, but for his family. This wasn't a financial problem. This was an emotional one. Peter's face showed it all. The pressure to provide, the guilt of not being present. The fear the that his dream was costing his family their peace. I sat with Peter and his wife inside their modest home, the nursery already prepped for the new baby. There was tension, unspoken but loud. His wife needed him home. The kids needed their father. But his business was pulling him the other way. It needed time, attention, and money he didn't have. And yet he was spending $3,000 a month on a Google Ads agency that couldn't even give him a cost per lead report. There was no report showing metrics of clicks or conversions. Last year he spent $20,000 in marketing. He generated $200,000 in revenue in his fourth year in business. The math didn't add up. He had too many employees for his revenue numbers. Either his team was inefficient or his prices were too low. Most likely both. Even if he cut waste, fired poor employees, raised prices, and improved his website, all steps we took during the turnaround, the main issue would still be there. Seasonitis Q4 collapse off season starvation Home service businesses are not designed to survive winter, and Peters was no exception. His trucks sat idle. He laid off all his employees his income vanished with the first frost. He entered lockdown mode. Every winter, he dug himself into a deeper hole. By March, he was starting over. He was racing uphill with a heavy load of debt on his back. The spring rush didn't feel like an opportunity. It felt like survival. That's why we focused on recurring revenue. We needed to reshape the business model. The goal was simple. Lock in mowing customers through spring and summer, then sell them on winter services. Debris pickup, gutter checks, light trimming visits every two weeks at the same rate as mowing. Give them value. Keep the crews working, keep the cash flowing. If we could convert 70 to 80% of his mowing customers into a recurring winter services program, we could break the cycle. We no longer start each spring in the red. He could pay himself year round, be home more, sleep better, smile again. That's what curing seasonitis is all about. The pain of the off season doesn't show up in the P and L. It shows up in the eyes of a tired father. It shows up in the long silence between a husband and a wife who feel alone. It shows up in the way the kids learn to stop asking when daddy will be home, because the answer never changes. This is why I'm so passionate about curing seasonitis. Because it isn't a business problem. It's a life problem. It's broken marriages, missed birthdays, mental collapses, financial stress that turns into emotional wounds. Peter's story is not unique. It is a quiet epidemic in home services. And the cure starts with recurring revenue. Cure 4 to Seasonitis is adding recurring maintenance and recurring revenue during the off season. Adding recurring revenue is helpful for cash flow, but it also adds to your net worth. The value of the business goes up when you add recurring revenue. There are two ways to value your business. Book value equals assets minus liabilities. This means you take your trucks, equipment and cash and subtract your loans and debts. Enterprise value is what the market would actually pay to buy your business. We call the difference between enterprise value and book value the market premium. Your goal is to increase this gap. How do you increase enterprise value? Several methods work. Increasing total revenue generally boosts valuations and multiples. Creating growth opportunities helps. Building a brand or developing intellectual property adds value. Streamlining operations, cutting costs, and optimizing prices all contribute. Making revenue and profit dependable. Not erratic, but consistent increases enterprise value. Today we will focus on recurring maintenance. It helps increase enterprise value in many ways. It streamlines operations, optimizes price flexibility, and makes revenue predictable. Total revenue has a significant impact on enterprise value, a business earning $500,000 will have a lower multiple than one with $10 million, even if the profits are the same. But not all types of revenue affect valuation in the same way. There are three categories of service revenue. One time revenue comes from projects such as paver patios, fence installations, bathroom remodels, and smart home setups. On page 17 of your workbook, list your main one time services. Reoccurring revenue comes from services that occur at irregular intervals without a set schedule. Think emergency repairs, snow removal, septic tank servicing, or irrigation fixes. These happen more than once, though not at regular intervals. Recurring revenue arrives at consistent intervals. It can be weekly, monthly, quarterly, or annual payments. Examples include mowing, bush trimming, janitorial services, window cleaning, and pet grooming. Cash collection differs across these categories. One time jobs typically offer large upfront payments. Reoccurring revenue brings moderate advance payments. Recurring revenue usually provides the least upfront cash. But enterprise value works in reverse. Recurring revenue has the highest enterprise value. In contrast, one time jobs get the lowest valuation multiple why care about enterprise value? Building a business as an asset is a smart way to build wealth. Unlike income, it isn't taxed the same way the government can tax W2 job income at over 30%. But when you build enterprise value, you create wealth that that isn't taxed until you sell. Consider Apple. IPhone sales have not grown since 2016. Still, the enterprise value and stock price keep rising. Even with flat iPhone sales since 2016, Apple's stock price has increased by over 10 times in the past 10 years. Why? Their revenue growth comes from services and recurring subscriptions. This segment of their revenue grew from almost nothing to a large part of their business. Looking at Apple's quarterly revenue, iPhone sales remain relatively stable, but services show significant, consistent growth. Services now make more money than Macs wearables like the Apple Watch and AirPods and iPads. Together, these steady revenue sources are Apple CarPlay licensing, iCloud storage, App Store purchases, Apple TV plus Apple Pay Apple Care Apple's product revenue shows big seasonal changes. Q4 holiday sales lead to huge spikes. Apple has seasonitis in its product business, but its services revenue shows steady, consistent growth. Stable revenue equals increased enterprise value. Apple's stock price and value have increased tenfold. This rise happened even though sales of its main products have stabilized. Recurring revenue commands a higher enterprise value. Microsoft offers another example. In 2013, you could only buy Microsoft Office as a one time download. When Satya Nadella became CEO in February 2014, he focused on cloud services and subscription revenue. Today you can still buy Office for a one time price of $149, but it is difficult to find. Microsoft promotes its $6.99 monthly subscription instead. This seems counterintuitive. Why accept $7 a month when you could collect $149 upfront? One time jobs help businesses grow faster because of immediate revenue. But Microsoft's enterprise value has increased 20 fold in the decade since this change. Their stock stagnated for years. They earned less money as they changed from one time to recurring revenue. But the long term value proved transformative. Use this knowledge to your advantage. Downsell big one time jobs into reoccurring services if someone can't pay for a $30,000 roof replacement, suggest regular repair visits for leaks instead. This reoccurring service is cheaper than the one time job. You could downsell further by offering a cheaper roof checkup. This recurring maintenance would prevent leaks before they cause damage. These monthly or quarterly inspections can help keep their roof in good shape. On page 17 of the workbook, list your one time services and potential downsells. How can you turn customers who can't pay a lot upfront into clients that generate recurring revenue? The goal is clear. Attract customers at the lowest cost, then focus on increasing their lifetime value. The cures to seasonitis revolve around getting more revenue from your existing customers. We've covered cure two upselling selling better versions. We have covered cure three cross selling selling adjacent services. Now we're discussing recurring maintenance selling more often. All these cures revolve around increasing the lifetime value of the customer. Why focus on recurring revenue? It's less volatile than depending on big jobs, deposits and final payments. I've seen businesses fail because one or two large projects didn't pay on time. Recurring revenue also proves to be more resilient during recessions. During the 2007-2009 financial crisis, new vehicle sales dropped by 42%. Meanwhile, the aftermarket sector repairs and maintenance experienced only a 1% decline. During tough times, people delay buying new cars, but they still take care of their existing vehicles. This requires reoccurring repairs and recurring maintenance. Brake pads need to be swapped. Oil changes need to be done. Another reason to focus on recurring revenue. Recurring revenue doesn't depend on having an exceptional salesperson present at all times. For one time jobs, your top estimator needs to be available. They have the right skills and experience to close deals. This creates challenges in stepping away from the business or in selling it in the future. I want to build my business as if I will leave it someday. This way, tasks get done and revenue keeps coming in even when I'm not there. I'll use lawn care to explain cure four with some creativity. You can sell recurring maintenance in any home service industry. For roofing, think about getting quarterly tune ups or cleanings. You can also sign up for priority service memberships. After windstorms or during hurricane season, solar panel cleaning and roof maintenance can become recurring services. Pressure washing companies can provide recurring services. Offer gutter cleanouts, roof inspections, window cleaning and caulking services all year. This way you can stay busy during slower months. Pool installers can offer heater, filter and pump inspections during the winter. They also handle water damage refill services and chemical treatments. Plumbers provide various services including drain cleaning, pipe insulation, water heater flushes, filtration system replacements, backflow testing, sump pump tune ups. All these services work on a recurring basis even during traditional off seasons. If you can't find off season services, change your thinking. We're not just selling a service or time. We're offering insurance, asset protection and peace of mind. Homeowners with million dollar homes pay around $5,000 a year for insurance. They rarely use it. Most people do not file a claim, yet they pay for protection without hesitation. The cost of prevention through recurring maintenance is far cheaper than emergency repairs. I like to use this analogy. Is it cheaper to hire a personal trainer or wait for open heart surgery? Paying $100 a week for a trainer costs $5,000 a year. That's much less than the cost of surgery and the weeks of recovery and therapy needed afterwards. The same principle applies to home maintenance. Customers gain peace of mind from the regular inspection and care of their property. In doing so, they save money. This mindset birthed our winter services program at Augusta Lawn Care. We explain it in six simple steps. 1. We keep your property looking good through the winter and the holidays. 2. We visit every two weeks until the mowing season returns. 3. You pay the same price as your regular mowing service. 4. We spend the same amount of time on your property as we would for a mowing service. 5. We complete as many checklist items as we can in that time frame. Then we pick up where we left off next and six. Here are the services on the checklist. Pick up branches and yard debris. Blow leaves off walkways and driveway. Inspect gutter downspouts to ensure flow. Trim bushes or trees touching house to prevent algae or rodents. Pull weeds and beds Cracks of driveway and sidewalk edge beds and walkways. Inspect property. If we find damage or issues, we will take pictures and send a report.

What about occasional snowfall? We add shovel snow to our service checklist. If we receive more than 2 inches of snow, we schedule the next winter service visit sooner to clear away without delay. We pull the next scheduled visit forward in snowy areas with per push pricing. We advertise when people get big bills. Tired of surprise? $400 to $500 snow removal bills? Try our level year round subscription in places with little snow and monthly flat fees. We say, are you tired of paying for nothing when it doesn't snow? Our Winter Services program delivers value regardless of the weather in warmer areas. If you need to mow during winter, we say mow the lawn if needed at the top of our checklist. Some Augusta locations in warmer climates still provide winter service every two weeks, but customers can choose to opt out. If they opt out, they will still receive monthly mowing service. Customers can select either biweekly window services or a monthly mowing option. This isn't a money grab. Customers actually save money. It's a downsell from expensive fall or spring cleanups for snow removal. It's a downsell from premium on call emergency service. We're converting reoccurring jobs into predictable recurring services. There are four ways to convert existing customers to winter services. First, send an opt out email or text. It could say we have a budget friendly way to keep your property looking good year round. If you want to opt out, click here. This approach usually retains 20 to 30% of customers. A better way is to send standardized price comparison videos. These videos explain how winter services saves money. They do this better than separate fall and spring cleanups. You can send this offer to all customers with an opt out option. If they decline, send a personalized video, show their property and highlight potential savings. Let's watch how Connor from Augusta Nation handles this. After a customer opted out, he made a custom video. It showed the customer's property using Google Street View. Connor explained the Winter services program and the cost savings. In the video, Connor addresses the customer directly. Hey Jason, this is Connor here with Augusta Lawn Care Services. I have your home pulled up here. I saw you opted out of Winter Services so I wanted to make this video using your home as the example. He says that Winter Services trade costly one time cleanups for regular bi weekly property care. His team clears branches, removes debris and keeps walkways and flower beds tidy. They also make sure gutters flow well. Connor highlights details about Jason's property. You may lack shrubs in the front, but there are some over by the patio. He points out the value by Saying Jason spent $400 to $600 on spring cleanups before he adds that winter services will cost the same as his regular bi weekly mowing fee. Connor makes his pitch more personal by pointing out the big oak tree in Jason's yard. He notes how the leaves from the neighborhood can become Jason's issue. He offers a gentle reminder that no action is needed if Jason isn't interested. The third conversion method for winter services goes beyond individual opt out responses. It sends personalized videos to every customer right from the start. Custom videos for each property boost conversion rates much more than general messages. For the best success, try the fourth show price comparisons in person. Though knocking on customers doors requires significant effort, the results speak for themselves. Each step up this personalization ladder brings better results. In person talks can convert 80 to 90% of customers. In contrast, standard emails with opt out links only convert 20 to 30%. On page 19 of the workbook, create your own price comparison sheet for these conversations. With creativity, every one time job or reoccurring project can transform into some form of recurring service. Practice your pitch as though you're speaking to an existing customer. Highlight the savings from your downsell. It helps them save money over time. The approaches that demand the greatest effort deliver the highest conversion rates. It is not easy to knock on every customer's door and explain winter services. Doing so takes more effort but yields the highest conversion rate. Almost every home service can turn one time jobs into steady income. You can do this with warranties, guarantees or annual inspections. So even if you think your service doesn't fit maintenance work, consider these options for sprinkler systems. Include monthly inspections with free repairs or paver. Patios offer maintenance packages with annual sealing that include lifetime warranties. Pool installation may include warranties if you keep up with bi weekly cleaning and chemical services. If I visit a property often, like every week or two, systems are less likely to get damaged or break. A roof can come with a leak free lifetime warranty if the customer agrees to yearly cleanings and inspections every six months, explain this value. Customers will see how regular maintenance leads to long term protection and cost savings. You can install plants with a lifetime warranty. The customer must agree to irrigation, bush spraying and biweekly flower bed maintenance. I'm transforming what would have been a one time plant installation into recurring revenue. This works for almost every service. Installing a deck? I'll guarantee it for life if the customer buys annual cleaning, staining and inspection retaining wall. I'll provide monthly visits for erosion control, bed maintenance and drainage checks. These recurring services target the main reasons retaining walls fail. Plus I can guarantee to rebuild the wall if it collapses. This adds value and increases close ratios. You can make home washing services reoccurring by scheduling your next visit while the service is happening. For deeper customer relationships, offer discounts for quarterly or annual commitments. Sell recurring work after finishing a one time project, consider pitching a recurring service. You can discuss this during the property walkthrough with the customer. This moment, when customers love their new patio, pool, fence or deck is the peak of activation. You solved their problem and they are delighted with the results. What service could you offer to turn this one time sale into an ongoing relationship? See how top brands like Eddie Bauer, the North Face, Columbia and Patagonia offer lifetime warranties on their products. They've built entire business models around this approach. These premium brands promise we'll fix it if it rips, if the zipper breaks, if a button pops off. This lifetime warranty enhances brand value. Check out the price difference. Amazon's knockoff jacket costs eight times less than the North Face, yet customers pay the premium with satisfaction. They leave five star reviews on a regular basis. Why? Because a lifetime guarantee increases the perceived value. On page 20 of your workbook, consider what warranty or guarantee could double the value of your service? What assurance could command much higher prices? Remember, if you're selling a lifetime warranty, most homeowners move every seven to 11 years. That 30 year roof warranty? Many customers will move before it expires. Younger homeowners will also relocate as their family grows. What if you named your company after the recurring service you've created? If Augusta Lawn Care were Augusta Winter Services, then the off season would be your prime time. You'd have a mowing season for eight months. Then you would switch to winter services. In October, you would ramp up. You would hire employees, run ads and expand operations. This is the exact moment when your competition cannot afford these investments. They have nothing to sell during winter, so they're not advertising. They're laying off employees and selling trucks to reduce fixed expenses. That's your moment to accelerate and dominate your local market. Read the recipe for market domination on page 21 of your workbook. Advertise when your competitors have nothing to sell while they're hibernating, you're growing, buying trucks and hiring people. Here's a tactical tip for justifying price discounts on recurring maintenance. When customers wonder why winter services are cheaper than one time cleanups, say we want to keep our crew busy all year. This helps us avoid layoffs during the holidays. Customers appreciate this reasoning when selling this program highlight three main benefits. 1. Price savings 2. Year round property standards 3. Insurance value Regular property inspections give snowbirds peace of mind when they're away for months. This goes beyond the physical service. Focus your marketing on these benefits. Keeping rodents out of an empty house is more valuable than pulling weeds. Drive online ads to instant pricing forms for winter services as you would for mowing. Here are some advertising headlines to grab their attention. Stop wasting money. Keep your property looking good year round. Why pay more? Subscribe and enjoy great savings every month. Switch to a subscription and watch your costs drop. Enjoy consistent savings with our monthly plan. It's smarter and cheaper. Save big. No more unexpected repair bills. You're wasting hundreds of dollars every winter on lawn care and landscaping. Usually you pay $799 for a fall cleanup and $700 for a spring cleanup, about $1,500 total. But with winter services from Augusta Lawn Care, you save big. We visit every two weeks for property inspection, gutter checks, snow removal, debris cleanup, bush trimming. Your property looks great. Not just twice yearly, but year round. We don't want rodents and insects invading. At Christmas. We'll pull weeds from beds. If grass grows during warm spells, we'll mow it too. You might be curious about the cost. It's exactly the same as your regular mowing service. The same price every two weeks. Now you get extra services while your property looks fantastic for the holidays. For a quote specific to your property, click the button below or call us today. Now I want you to practice pitching the service to someone. Use the price comparison template from your workbook. They are not a current customer. They have no idea about your main service or ongoing offerings. Focus on price, savings, insurance value, and peace of mind. Selling to new customers can boost your growth in the off season. Practice until you can provide a detailed explanation of how they're saving money and improving their property. Here's a real case study from Connor and Aliyah Stead in Evansville, Indiana. They shared it in the Augusta Nation Facebook group. We sent 186 emails and only 28 opted out north of 80% conversion. I'm sending a personal video to those who declined. It explains our winter services and why they're the best deal. Connor followed up later. I wanted to share a cool win. I had a client add me on Facebook this morning after I sent him a personalized video. When he initially declined winter services. We converted about 6 out of 29 people who originally said no through these personalized videos. Even if they decline, no one else is doing what we do, and clients always remember the video we made for them. Loom's screen recordings have been a great addition to our toolkit for conversions. Dustin from Bloomington, Illinois shares another success. In 2023, our Q4 monthly revenue hit $24,654. In 2024 it jumped to $42,539. We attribute this to our winter service approach. This helped dramatically fill our capacity, increasing our profit from $1,168 to $12,153, more than 10 times the profit in one month. The key insight is advertising this ongoing service to your current customers costs nothing. Tell the hundreds of contacts in your database about this option. You are a text or email away from a 50 to 80% increase in recurring revenue during your off season. If this chapter gave you a great idea to put in place, I have one favor to ask. Help me get this message out. I want this to become the norm in our industry. This is how we beat unlicensed and uninsured competitors, being better serving our customers More A Rising Tide Floats All Boats. Please leave a review of this book on Amazon. Please leave a review of this book on Audible Go to the top right hand corner, click the three dots and leave a review. In the review, mention the actionable advice you got from Cure four this chapter on recurring revenue. Mention that in the review. Thank you in advance. I appreciate it.