Episode 156: Recurring Revenue: Why Your Business Can’t Afford to Ignore It

In this episode of The Pursuit of Badasserie: The Podcast, we’re diving into the game-changer that too many entrepreneurs overlook—recurring revenue.

Here’s the truth: unpredictable cash flow kills businesses. Recurring revenue creates stability, scalability, and the freedom to plan for growth instead of scrambling for the next sale. Whether it’s subscriptions, memberships, retainers, or creative add-ons, there’s a way for every business to build recurring income streams.

We share personal stories from running service-based companies, coaching practices, and even security and fitness businesses—showing you just how powerful recurring revenue can be when it’s done right. You’ll learn:

• Why recurring revenue is the backbone of consistent cash flow.
• The psychology behind subscriptions (and why customers stay—even when they shouldn’t).
• How recurring models increase lifetime customer value and even boost your business valuation.
• Smart ways to audit your offers and add recurring streams without creating more work.
• The dos and don’ts of pricing so you don’t sabotage your own profitability.

This isn’t about copying Netflix or Amazon. It’s about taking control of your business model and creating stability that frees you up to take risks, innovate, and scale.

If you don’t already have recurring revenue built in—or if you know it’s time to level yours up—this episode will push you to rethink the way you structure your business.

Now we want to hear from you: Do you already have recurring revenue in place? Where can you add it? Share your takeaways with us in the comments or DM—we love hearing how you’re building your badass business.

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Read the full transcript of this episode below:

 

Lynn Howard

Hey, I’m Lynn.

Amanda

And I’m Amanda. Welcome to the Pursuit of Badasserie, the podcast. Today we’re talking about recurring revenue, what that looks like in your business and why you need it.

Lynn Howard

Absolutely. I love reoccurring revenue. All I can think about is when we opened up the security business back in Hawaii, and this was, I think, my first taste of really reoccurring revenue in a business that I created.

And there’s a couple of things, I’ll give some stories later, but that make reoccurring revenue like your golden child.

One is when you have reoccurring revenue, that’s like a guaranteed every single month. So when you can start to build that and it can compound pretty quickly, like that’s like, you know, that’s in the background, like that’s happening.

And it might be small little amounts or big amounts, it depends on like your business model. And so when you go out and make a new sale or go and do, you know, bring on a new client or whatever that is, like that’s just added bonus.

So creating a reoccurring revenue that, as you like to say, covers your nut and a little bit more, that gives you the ability, a little bit of breathing room and freedom.

But also like, it’s just, it’s there in the background. I’m. mean, there’s so many different things and so many businesses can be on reoccurring revenue.

And actually, I had a thought, too, when we decided to do this is that for me, like affiliate marketing is almost like a reoccurring revenue as well, like a version of it where you have maybe small amounts that are coming in on a monthly basis.

But it has a very much reoccurring revenue feel a lot of it to it, because maybe you get five bucks a month from this particular person because they bought this and maybe that adds up.

And so that way you have 50 clients and you have two hundred and fifty dollars a month and then so on and so forth.

Like, yeah.

Amanda

Absolutely. I mean, the predictability and the scalability and the stability is really what you want from recurring revenue. I mean, I think one of the biggest killers of businesses is cash flow and recurring revenue creates consistent cash flow.

That’s really what you need to get your business. To stay alive, and it makes it easier to forecast your income and plan for expenses if you have a big expense coming up, or you want to, let’s say, want to buy more equipment, or you want to upgrade a software system, if you know you have a big expense coming up and you have recurring income, you can predict how much or how little you’ll need in order to hit that number when you have a big expense coming.

So it’s, it’s why, you know, you hear people say a lot, like the membership, or subscription, subscriptions, the Netflix, the audibles, the all those things, those are the cash cows, because people will use them.

And maybe they forget about me that they don’t, but it’s recurring, it’s always going to be hitting your bank account.

And so, I mean, a lot of businesses actually build their model around people not using those subscriptions. Um, I’m talking to you fitness, the fitness industry, the big giant box gyms, they are actually.

So you’re hoping their, their whole model, why they have memberships that are so cheap is that they’re hoping you forget.

And they’d be like, Oh, it’s just like 20 bucks. Like, yeah, sure. I’ll go to the gym this month.

And like, they’re actually kind of hoping you don’t, because that’s how they build their money. That’s how they get the most use out of the same equipment.

And it’s, it’s, there’s a reason why it’s stuck around so long, because it does really work for creating cash flow in your business.

Lynn Howard

Yeah, I chuckled because I’ve been out of country for a month, and I’m still paying my membership, but I have to because it’s, it’s a contract.

But, and so it’s interesting, because I love that you started to kind of tap into the psychology of it as well.

The other aspect, if it’s, if it’s small amounts, it’s hard, people can justify keeping it right. So like the Netflix, I might use this, it’s kind of like the person who has a junk drawer, because you might use it later.

type of thing or keep in that box. It’s the same thing for subscriptions. Because people are like, Oh, it’s only 20 bucks.

That’s not a big deal until they start doing the math. And I will say people have gotten a bit better about it.

Like it’s a bit more talked about, about like looking at what all your subscriptions are on an annual basis or quarterly basis at somewhere in between to start to like make a decision and wean off.

But it’s so easy to kind of keep them at that too. And I will say too, I forget who it was.

was just talking with somebody not too long ago and they’re like, Ooh, I’m never going to cancel because I have the original plan.

Amanda

It might be you because you have a lot of words. I’m never canceling Netflix. I have my grandfathered in.

It’s like $5.

Lynn Howard

Yeah, exactly. And so there are certain things and we’re not saying like to get over on people, but that’s the psychology also of like the, the smaller reoccurring revenues.

And I think that, you know, especially in the coaching consulting world of those who. And so. to They charge, you know, a higher amount, but they do monthly payments versus a big lump sum to that.

That’s a sort that is a reoccurring. It’s just in a shorter bucket and a shorter container. And so when you can have multiple tiers of that’s why a lot of people went to memberships, right, that do service based type of businesses or like community kind of things.

Membership, but it’s still a membership where they just pay a little bit a month because that can add up so quickly.

And like you said, I love that you said that it gives you the stability. And the thing I want to jump to with the stability, I know we’re kind of jumping around is this helps actually with investors and evaluations on your business and certain businesses are sold off a base off of there.

Like my security company was sold.

Amanda

And it absolutely increases the customer’s lifetime value and the potential for that value. So when you are selling a business, suddenly that client who maybe only spends $30 a month, they’re not worth $30.

They’re worth the average lifespan of a client. So maybe it’s 18 months, maybe it’s two years, however long you’re the average length of the Time your client is stay on.

That’s how much they’re worth from a business perspective, one selling a business. So it really, you know, when talk about subscriptions, I must have like a thousand different subscriptions and I go through them every month and I’m like, which ones are worth keeping, which ones aren’t.

And when it comes down to it, when you think about the psychology behind a subscription model is most of the time you can justify it.

Like, oh, well, I do use this for business here and I use this for I mean, mine are almost all business-related, but then when you look at, like, entertainment ones, there is that, oh, well, maybe sometimes I’ll use it, sometimes I won’t, and then you get, and if you’re smart, and if you have a recurring revenue stream, if you have a subscription model, you will be smart with the way that you make people cancel, because when you have them cancel, you actually make them feel a little bit guilty for canceling.

I mean, I remember the first time this happened to me was when I was 11 or 10 or 11, and I was on a subscription-based paying for my violin lessons, and when I wanted to quit violin, he was like, well, actually, you’re, you know, is this something you really want to do, because if you quit now, you know, you’re not likely to start again, and then you’ll never be a musician, like, you’ll never be, basically, you’ll never amount to anything, is basically what they told this impressionable little 10-year-old.

So I’m like, okay, I want to stay doing lessons, even though I only practice my violin, like, twice a month.

So psychologically it will get you. And when you have these subscription models, even when you cancel, there’s a bit of like, are you sure you want to do that?

Because if you come back, you’re going to come back at a high rate. And maybe you just want to pause.

Maybe you’ll just take a pause for a month and that’s only $5 to hold your pause. And those things trickle up and you forget about it.

And it’s, you know, it’s how many times have you signed up for the free weekend on Cinemax and then you forget to cancel before the weekend’s up.

And then it just sits a recurring revenue. Like how many times do you do that? That’s part of the model.

That’s part of the psychology and part of the way people make money in business.

Lynn Howard

Yeah. Zoom got me on that one. I didn’t realize I was paying for something and that’s my own fault.

But, you know, I love that you, you talked about the guilt side. It’s also an upselling side. And I want to clear up a couple of things too, is that retention, having people on.

Reoccurring helps with retention. It’s, I mean, the numbers have varied and I don’t know if it’s changed, but the last time I saw it was like five to seven times cheaper to keep a client than it was to find a client.

that might be different now. Like that was back in the day. And so when you keep them on retention, it’s easier to upsell them.

It’s easier to get referrals from them. You have more of a pool because people you know, like know you, they already built the know, like trust, but if they try to cancel, it’s also an opportunity to say, Hey, like I can add this on, I can add this on.

So it’s also an upselling to way to say, you know what? And really you shouldn’t be proactive about even maintaining your reoccurring people.

You shouldn’t be waiting until they’re trying to cancel. You should be still up leveling their value that they’re in there.

Making sure that you’re making touching base, that they’re Unless you’re Netflix, they’re not just another number. And Netflix is an easy example, because it’s just like a massive conglomerate.

But look at like Amazon Prime, like them adding a tier membership to it, man, I mean, they’re making a killing off of that, a killing.

And that’s just, I don’t think that that’s extra money out of their pocket, maybe shipping. Um, but that’s like, nothing.

It’s wild. It’s wild.

Amanda

Oh, absolutely. And so when we talk about why your business needs a recurring revenue stream, this is why because even a small amount of money can trickle down in a lot of ways.

So one thing I just want to challenge every business owner in your business, where can you add a recurring revenue stream?

It doesn’t have to be. It And. Yeah, could be $2.99. could be $1.99. And this is where you’ll see a lot of people starting to do like Instagram memberships or like subscribing to their YouTube channel and like have the paid tier.

Because that paid tier, even if it’s only $1.99, even if it’s your OnlyFans, it’s $1.99. Not that I’m codoning that.

But anyway, even if it’s a small amount, it adds up the way it adds up. So where can you add a recurring revenue stream to your existing business?

Because I think there’s, I can’t think of a single business that doesn’t have an avenue to add that in somewhere.

Lynn Howard

Yeah, no, I mean, this is where the audit comes in. I agree. And, you know, I can hear people’s And have a reoccurring, you can have a top tier membership where you pay, maybe even one time, you obviously want to make it in reoccurring.

Maybe it’s one time a year to keep it.

Amanda

That’s what Amazon is. you get Barnes and Noble, but it’s the same thing. It’s one time to because $20 to become a member and you get a cookie on your birthday or whatever.

Lynn Howard

Yeah, yeah, exactly. Or you’re in the know of the exclusivity of different things or your more preferred client. So you get better parking or whatever.

Like there can be so many different things that you can offer or maybe they get a set of coupons that the others don’t get.

Or, you know, I don’t know if people actually use coupons anymore, but maybe it’s already on their card that they get a special percentage on top of another 2% off of.

Because that’s the whole thing is like, like you said earlier, a lot of times people forget to use it.

I, well, Sephora is a free membership, but like if you’re traveling around, like I can’t use it. I can’t use my Taiwan in Malaysia to build points.

I can’t use my Taiwan.

Amanda

I’m in Starbucks.

Lynn Howard

I can’t use my American Starbucks in Bangkok. can’t use my Bangkok Starbucks in KL, but we do it and there’s benefits to it.

I know we were talking about free ones, but still like auditing, figuring out where you can have like something that’s a bit more of a subscription, even if it’s inexpensive, um, offering bonuses, whatever that is.

Um, it’s telling you, it can compound so quickly. Um, I will say to, uh, you know, as we’re talking about, this is like, you know, I love my sticky notes is kind of map it out.

Like when you’re auditing, what are all your offers? What are all the things that could you possibly do underneath like a membership or subscription and kind of flush it out there?

So that way, eventually maybe you can even do tiers. So, um, doing a mirror board or a post-it kind of parting might help you with this.

Um, sure. that’s-

Amanda

Absolutely. And there’s so many different levels or tiers, as you’ll say, to membership models. I mean, if you think about the way a museum or a zoo does it versus the way Netflix or Amazon does it versus the way a gym does it, there are nuances that are similar and there are things that are separate.

And that’s because each business can kind of choose what the heck they want to do. Like you don’t have to do it the exact way that somebody else does.

And I’ve got plenty of clients who might even have just a virtual subscription where they have a virtual thing that is allowed through subscription or they have access to content that already exists.

They have a bank of content and so they give a subscription and people have unlimited access to that bank of content rather than them trickling it out over the year or over the course of five years because they’ve been doing it for forever.

So, there are lots of ways to even repurpose existing things that you have and turn it into a subscription model.

Now, I I think one of the things that a lot of people question is, what is the value? What am I charging for that, particularly if you work in an industry that isn’t like, for example, in the fitness industry, people are used to a membership model.

That’s I think that’s been around for forever and going to a zoo. People are used to a member versus a drop in like that’s people are used to that model.

So if you are in an industry that doesn’t have that, sometimes it can be that can be the question of what do I charge for a membership model?

What does that look like? And it really comes down to value. Like, what will your people pay? What will what is the value of what you’re offering and what will they pay?

And and I know this this has come up a lot in the last couple of weeks for me is.

You can change that price just because you said it’s a dollar ninety nine doesn’t mean it’s a dollar ninety nine forever.

You can. can change it whenever you want. You are the owner of your own business. So if you decide six months down the road that it’s really worth $599, then that’s the new price.

If it’s worth $109, then everybody else got grandfathered in, or they got the inaugural price, or they got the founder’s rate, or they got the intro special, whatever you want to call it.

You can change the price.

Lynn Howard

You can change the prices whenever you want.

Amanda

You can lower your prices if it feels like it was too expensive. You can lower your prices. Do what you want.

It’s your business.

Lynn Howard

Absolutely. I think, I mean, we’re getting into kind of like the launch and like the, the structure of it, but I agree with you.

I mean, look at you, you have the $5 Netflix that you were grandfathered in, and that’s a good way, but it is how you position.

It is how you build the value, regardless if it is a, um, a business who kind of leans towards it or doesn’t lean towards, towards it.

I would say for businesses already have subscription base, how can you increase that? Um, like the, the fitness, the.

The security company and stuff like that and running different programs increase that reoccurring revenue because a lot of times we’re looking at just going after that next sale or whatnot, but can we maximize our reoccurring revenue as well?

I think that that is a big thing to look at and it’s funny because as you were talking I was thinking of I love cooking shows and there’s this chick on YouTube that I follow that does like cake things like it’s a baking but she’s mostly into cakes and stuff and she recently started her subscription and it’s not much but it’s all like behind the scenes and like some extra recipes and like more of the content so you don’t actually like you said have to invest a lot like you don’t have to be out of money it could also be like um you know pay a bit of a subscription and I’m bringing different opportunities to you.

Um, and so even like a grocery store, like you’ll get discounts at this store, this store, this store, because you are subscribed here.

So partnering with other people in the industry or outside of the industry to add value to that subscription base.

So there’s so many different ways that you can go about it. That’s not taking money out of your pocket.

Um, that’s adding money. But if you do not have some kind of reoccurring revenue aspect in your portfolio of income, diversification income, then you really need to think about it because that’s where it is.

And the, the ones that you can absolutely have for a long term, naturally are going to, they’ll be typically smaller amounts, but if you build that, like, you have 200 clients paying a hundred bucks a month.

Like, that’s $20,000, right?

Amanda

So I think my math is math, right? And I was like, oh, no, don’t make me do math, Lynn.

Lynn Howard

I know, I I know. Anyway, look at your business model. And if you already have reoccurring revenue, are you continuing to build value?

Are you continuing to make sure that they’re taken care of as well and not forgetting about them because they’re on this, like, path of reoccurring?

And I’m not saying just, like, for example, an online creator who has a membership, and, yeah, they go in per what they said, and they’re just going through the motions.

Well, that’s not going to keep them going. Like, you need to keep it exciting, keep adding value to it.

And, again, it doesn’t have to cost you money to do this.

Amanda

Absolutely. Absolutely. But it does require you to sit down and do some CEO work and figure out what that’s going to look like for your business.

And the other caution I will give you around price is don’t undersell if you have hard expenses. So I see a lot of people who they have the mindset, oh, well, if I get 100 people or 200 people paying 100 bucks or $10 or whatever, it’ll add up and it’ll be great.

But if you have hard costs and you’re hoping that 20,000 people sign up for a dollar, you might need to rethink how you do your subscription model as well.

So don’t be afraid to charge, just like don’t be afraid to charge more or later, and you can make adjustments, but don’t price yourself out of business.

I’ve seen that happen a couple of times as well, where it’s like, great, where everybody’s on subscription and doesn’t matter how many people I add at this price, I’ll never make my net unless I have, you know, 50,000 people in my program.

So what’s your capacity, what do you need to charge, what are your hard costs, but where can you add recurring revenue?

All right. Ideally, no matter what business you have, you have more than one revenue stream, and we’ve talked about that a lot, but recurring revenue shouldn’t be the only revenue.

I mean, I can see where it would be in a couple of different businesses, but even still, they have multiple tiers and they have different ways to do things.

Lynn Howard

So, again, you’re not Netflix. Well, that’s diversification of revenue, and I don’t know if we did a podcast fully on that.

I can’t remember. If not, we’ll do.

Amanda

Yeah. Don’t worry. If we haven’t, we’ll do one. But regardless, think about your pricing. Be strategic about it. No matter what decisions you make, they have to be strategic if you want long-term success.

Lynn Howard

Absolutely. So we want to hear, do you have a reoccurring revenue model already built into your business? And what does that look like?

Go ahead and leave us in the comments below. Share with us your questions. If there’s a topic that you want to hear, by the way, just let us know as well.

DM us or put it in the comments. And share this with somebody that you know that maybe they need.

Amanda

And whether you are listening to us on Spotify, Apple, or wherever, or if you are watching us on YouTube, make sure you are liking and subscribing so you get all the information first.

Lynn Howard

Absolutely. Till next time.

Amanda

Get after it.