Discover How to Increase Profits and Create Reoccurring Revenue with Maintenance Agreements | Episode 125
Profitability Master, Ruth Anne King, is a seasoned, serial entrepreneur who helps businesses get and stay profitable. Since 1981 Ruth owns or has owned eight businesses including Profitability Revolution. She grows her own businesses as well as coaches, speaks and helps other small business owners reach their goals.
If you are selling your business today, you need to know that the price that others will be will to pay is will be based on the amount of maintenance agreements you have.
In other words the more reoccurring revenue you have, the more valuable your company company is to a potential buyer. So if you have little or no maintenance agreements it lessens the value of your company.
When people are looking to purchase a company they are not just looking at the yearly revenue, they are looking at how many loyal customers do you have that do business with you on a regular basis.
Maintenance agreements are the key to generating reoccurring revenue. Its business that you don’t have to resell each time they run out of or need a new widget.
It’s cash being deposited into your bank account on a continued basis. Cha Ching.
And if its set up on a monthly payment process, it becomes an amazing thing.
Let’s run some simple numbers… say you have 1000 customers and only 25% are on a maintenance program. Let’s say you can charge just $59.00 a month, that’s $1,4750.00 a month added to your revenue stream equalling $177,000.00 a year that is basically FREE money.
What if you could create a program that could exceed $100.00 a month?
Do you think that might solve some of your cash flow problems? I think it might.
In order to make it work you have to create value for the customer to want the program.
In order to get a hold of Ruth Anne King
Her phone number: 770-729-8000 (office)