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When I first started freelancing I found that the hardest thing was to earn a regular and predictable income every month. Not knowing when my next paycheque made me feel quite anxious, frustrated and desperate at times.
Which led me to create a subscription model for some of my services in my freelancing business.
After implementing it, even though I don’t make a lot from it, it gave me a sense of peace that I have something coming in and any projects I pick up each month is the cherry on top.
It took me approximately 18 months to get a monthly recurring income (MRR) of $500 a month.
How do I make recurring income?
There are quite a number of ways you could set up a recurring income in your business.
One of the easiest ways is to create a subscription plan for your services.
For example, what I did was instead of charging a one-off payment of $2500 for a website, I repackaged it into a perpetual subscription plan.
To make more attractive to clients, I added additional services and products to it which I found helped reduce the churn.
However, one important thing is to include a minimum term in your contract, which locks a client in for that period and it is up to them to cancel the subscription or pay you out.
Another way is to create a retainer service where the client pays you a monthly for a certain number of hours of work. Whether they send you work or not they still have to pay you every month.
Usually, I don’t roll over hours however I am quite flexible as I know that some months can be really busy versus other months. But I do tell them if they are abusing my generosity. I found that by telling the client they are over the limit and you will have to pay for the additional work, they quickly get the picture.
As a retainer, I created a monthly maintenance/website care plan where I maintain the client’s websites and minor fixes which I sell to clients who do not sign up for my website subscription plan.
3. Affiliate Programs
As a web developer, I often get asked what software is the best. Previously I would suggest a solution and send the client to the website.
However, I found that a bit annoying as I never got paid for my research or advise. So these days I always check if they have an affiliate program so at least I am compensated for my time.
4. Resell Products or Services
Another way is to resell other people’s products or services.
For example, for my web development business, I resell web-hosting as every website needs hosting. All I do is simply mark up the price a little bit and invoice the client every year.
I find that it is not a lot of money and sometimes more of a hassle, as you will have to support the client for any issues relating to the product or service.
How to charge recurring income?
The best way to set up your recurring payments is to do an automatic direct debit from your client’s credit card or bank account.
Which means you don’t have to chase money every month.
I personally use Paypal which I found it to be the easiest to set up and most clients are familiar with it.