How to scale a business without losing what makes it work
Scaling a business isn't doing more of the same with more people. It's growing revenue without costs, chaos or your hours growing at the same rate.
Leer más →Recurring revenue: what changes when your business doesn't start from zero every month
What recurring revenue is, what MRR and ARR mean without the jargon, and why thinking in recurring terms changes how you run a business.
There are two kinds of business.
The ones that start from zero every month.
And the ones that start every month with something already earned.
The difference has a name: recurring revenue.
What is recurring revenue?
It's income that repeats predictably. Every month, or every year, the same customer pays you again because they keep using what you give them.
A software subscription. A maintenance fee. A membership. A service that renews on its own.
The opposite is one-off income: a project, a sale, a commission. You get paid, you deliver, and next month you're out looking again.
MRR and ARR, without the jargon
MRR (monthly recurring revenue) is your recurring income per month. If you have 40 customers paying you €50 a month, your MRR is €2,000.
ARR (annual recurring revenue) is the same thing over a year. In the example, €24,000.
What doesn't count: one-off projects, setup fees, extras charged once. Only what repeats.
Simple. But looking at your business through this number changes a lot.
What changes in your head
When you sell projects, you think about the sale.
When you sell something recurring, you think about the customer who stays.
And that changes everything:
- Support stops being a cost and becomes part of the product. A well-looked-after customer keeps paying.
- Always delivering matters more than selling high once. A product is a promise you keep every month.
- You can plan. You know what you can count on before the month starts.
- You can say no. With the basics covered, you don't have to take any project that comes along just to pay the bills.
Recurring revenue doesn't make you rich overnight. It makes you free, little by little.
From projects to subscriptions
We come from the world of projects. For years, Foxnice lived on client work.
The move to recurring revenue didn't happen all at once. It came from realising that many clients needed the same things on an ongoing basis. First maintenance and support. Then our own products that get paid for every month, like PagoCRM for sports clubs.
If you run a service business, ask yourself this:
What do I do that could be paid for every month, because the client needs it every month?
This isn't about putting a subscription on everything. It's about finding what your client already needs on an ongoing basis and offering it to them that way.
How to build recurring revenue
- Find what your client needs again and again. That's where the natural recurring revenue is.
- Package it. One price, a clear scope, no small print.
- Deliver every month. Customers renew for what they get, not for what you promised.
- Measure who stays, not just who comes in. A customer who leaves weighs as much as one who arrives.
Patience is a strategy too
Recurring revenue is slow at first. In the early months, €50 a month looks like very little next to a €5,000 project.
But the project ends.
The €50 a month, if you do your job well, keeps coming. And it adds up with the next one. And the next.
That patience is, for me, one of the most useful ways of thinking there is in business.
P.S. I wrote about this from another angle in a product is a promise you keep every month.