Black Entrepreneur Blueprint 549 - Jay Jones - Make More Money With A Monthly Recurring Revenue Model

[00:00:12] Welcome to Black Entrepreneur Blueprint, the number one podcast and resource for Black entrepreneurs.

[00:00:19] I'm your host Jay Jones and Black Entrepreneur Blueprint was created specifically to educate and inspire Black entrepreneurs to launch, build and grow successful, sustainable businesses.

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[00:01:00] Welcome to the Black Entrepreneur Blueprint episode number 549.

[00:01:07] I'm your host Jay Jones and today we have another outstanding and informative show in store for you.

[00:01:13] Today we're going to be doing a rebroadcast of one of our most downloaded and impactful episodes from March of 2023 titled

[00:01:22] Make More Money With A Monthly Recurring Revenue Model.

[00:01:26] Make more money with a monthly recurring revenue model.

[00:01:31] Now before we get to today's show content, I just want to remind you guys if you need to generate more leads for your business,

[00:01:40] if your business is failing, if your business is not reaching maximum capacity or efficiency, go to 5dayleadgen.com.

[00:01:50] That's the number 5dayleadgen.com for more information about my 5-Day Lead Generation Email Marketing Course.

[00:02:02] Now, it's only a 5-Day Course, but it helps you set up a simplified lead generation system to help you generate more qualified leads for your business.

[00:02:13] Remember, no leads equals no sales equals no business.

[00:02:18] So go to 5dayleadgen.com for more information.

[00:02:22] The number 5-Day Leading Gen.

[00:02:29] 5dayleadgen.com

[00:02:31] Let's get ready for today's show content.

[00:02:33] Today's show topic is make more money with a monthly recurring revenue model.

[00:02:39] Make more money with a monthly recurring revenue model.

[00:02:43] Many entrepreneurs struggle to be profitable because they don't have a predictable monthly income.

[00:02:49] And one of the best ways to create that predictable monthly income is by implementing a monthly recurring revenue model into your business.

[00:02:57] Before we jump into today's content, I just want to share a few things with the Black Entrepreneur Blueprint family.

[00:03:03] First and foremost, I want to welcome all first-time listeners to Black Entrepreneur Blueprint.

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[00:03:10] Please stick around until the end of today's broadcast.

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[00:03:18] such as the link to my latest book, A New Black Wall Street,

[00:03:21] Circulating the Black Dollar Worldwide by Building Successful E-Commerce Businesses.

[00:03:26] Second, BEBacademy.com, which is our online learning portal.

[00:03:31] You can get three days free access to everything in the academy just by going to BEBacademy.com

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[00:04:29] Now, let's get ready for today's content.

[00:04:31] And we're talking about make more money with a monthly recurring revenue model.

[00:04:36] So today we're going to discuss why you should have a monthly recurring revenue component in your business.

[00:04:41] And I'm going to outline the five steps to do so.

[00:04:44] And in addition to that, I'm going to give you guys several monthly recurring revenue business ideas

[00:04:50] and how you can utilize it with what you're currently selling, be it your products, physical products, digital products, and or services.

[00:04:58] The first thing we want to do is to define what MRR is, monthly recurring revenue.

[00:05:04] You'll see it listed sometimes as MRR or subscription revenue.

[00:05:09] And basically what it is, it's the predictable total revenue generated by your business from all the active subscriptions in a particular month.

[00:05:18] So it includes recurring charges from discounts, coupons, and recurring add-ons, but excludes one-time fees.

[00:05:25] So basically it is a monthly subscription, but you'll see it listed in articles and spoken about as MRR, which is monthly recurring revenue or subscription revenue.

[00:05:36] They're the same thing.

[00:05:38] So don't get it confused guys.

[00:05:39] Now that we know what monthly recurring revenue is slash subscription revenue,

[00:05:44] let's talk about some of the benefits and some of the cons to monthly recurring revenue.

[00:05:49] So in terms of the number one benefit, this is big guys, it's predictable cashflow.

[00:05:55] So it allows you to predict how much money you'll be making each month and forecast your future months.

[00:06:01] So this is going to help you with strategic planning.

[00:06:04] So if you know each month you're averaging $25,000 a month, then you know in three months, six months or whatever,

[00:06:12] you're hopefully averaging a little bit more by bringing on new customers.

[00:06:16] So this allows you to be able to make strategic moves and plan.

[00:06:20] One of the biggest issues with entrepreneurs is we don't know what we're making from month to month because we don't have predictable income.

[00:06:28] So it doesn't allow us to plan that far ahead.

[00:06:31] Many of you who are listening to this podcast right now, you don't know what you're going to make this month or next month because it's a hit or miss.

[00:06:39] You're always on that proverbial hamster wheel where you got to get new business in every day, every day, every day in order to generate revenue as opposed to having predictable cashflow.

[00:06:51] Where you know you have a base of customers each month that are going to pay their subscription.

[00:06:56] So benefit number one is predictable cashflow.

[00:06:59] Benefit number two is automated payments.

[00:07:02] So your auto pay helps your customers retention, right?

[00:07:05] So they don't have to go in their pocket every month and pay for your software because it's automatic payments.

[00:07:11] And so a lot of times people are even going to forget that they're making the payments and they'll continue to pay whatever your product or service is each and every month with automated or automatic payments.

[00:07:24] Another benefit of monthly recurring revenue is customer retention.

[00:07:27] I just kind of touched on it.

[00:07:29] So subscription payments allow you to focus more on your customers experience as opposed to generating new customers all the time.

[00:07:37] And so that helps with your retention.

[00:07:40] And it's funny because many times we even forget that we subscribe to something until it hits on your credit card bill or your credit card statement.

[00:07:48] It's funny.

[00:07:48] I have to cancel a couple of things right now because I don't even use them anymore, but I keep forgetting to cancel them.

[00:07:54] And what we're talking about guys is making more money with a monthly recurring revenue model.

[00:07:59] And these are some of the benefits of that model.

[00:08:02] Next is higher company valuation, a higher company valuation.

[00:08:07] So if you ever get to the point where you're going to sell your business, then this is going to increase the value to investors because you have a predictable and reliable revenue source each month.

[00:08:19] So if I'm going to buy a business and I know that business is doing $100,000 a month each month consecutively or consistently because it has a subscription business model, that's going to make it more attractive to me than buying a business that you have to hunt every month to get customers just to put revenue on the books.

[00:08:40] I mentioned a second ago, it's being on the proverbial hamster wheel where you have to make sales every month versus once again, a subscription model, which the investors love that.

[00:08:53] So you get a higher company valuation.

[00:08:56] All right.

[00:08:56] And also the last benefit of MRR is growth potential slash scaling.

[00:09:02] So with predictable cash flow, that means you can invest more money into scaling your business.

[00:09:08] So if you know for the next six months, you're getting 25 grand in in revenue each month, that's going to help you invest that money to be able to scale it because you have that predictability.

[00:09:19] So you have predictability and uncertainty.

[00:09:23] And most of us are working off of uncertainty when it comes to month to month.

[00:09:27] So that's why I've incorporated monthly recurring revenue into some of my business models.

[00:09:32] I just talked about bebeacademy.com.

[00:09:35] That's a monthly recurring revenue model.

[00:09:38] Brand Builder Academy Elite is a monthly recurring revenue model.

[00:09:42] And so these models are important to keep productivity and predictability and cash flow going so you can continue to plan ahead.

[00:09:52] So those are some of the benefits of monthly recurring revenue.

[00:09:55] Now, everything isn't perfect, guys.

[00:09:58] And there's there's some cons to monthly recurring revenue also.

[00:10:01] And we're going to talk about that real quick.

[00:10:04] The first con is subscription hate.

[00:10:07] Right.

[00:10:07] I just talked about, man, I got to cancel some of these subscriptions.

[00:10:10] I bought this this shaving cream.

[00:10:14] I forgot it was a black owned company.

[00:10:16] And I keep forgetting to cancel it because I didn't like the smell of it.

[00:10:21] But I've gotten it four months in a row now.

[00:10:23] And I just got to remember to cancel the subscription, you know.

[00:10:27] But once again, it was a good product.

[00:10:29] But I just don't like the smell after you put it on.

[00:10:33] So subscription hate.

[00:10:34] So many customers don't like those subscriptions.

[00:10:37] And some of them will actually shy away from even trying your product or service because they don't like that business model.

[00:10:44] OK, it can push consumers away.

[00:10:47] So that's one of the biggest cons.

[00:10:49] Another con is trying to convert in this and existing customers to a subscription model.

[00:10:55] So, for example, if people just buy your product when they're ready versus somebody on a monthly auto ship, you know, that can be that can be a hard conversion.

[00:11:07] Some people don't like to be put on monthly.

[00:11:09] They like to order when they want to order.

[00:11:11] And so that's a very big con that you have to you have to think about.

[00:11:15] You also have to think about what type of business that you have and what you're selling to.

[00:11:21] And the other con of this type of business model is the churn, which is subscription cancellation.

[00:11:27] Now, that's par for the course.

[00:11:29] You're going to get churn each and every month.

[00:11:32] People are going to unsubscribe.

[00:11:34] So, for example, if you use Stripe, right?

[00:11:37] So a lot of my stuff, that subscription model is with Stripe.

[00:11:41] And it'll actually show you, you know, how many people cancel, what's the percentage of your churn.

[00:11:46] And also what you have to really take a look at when you have churn is you don't want to start losing more customers than you're bringing on.

[00:11:55] Because what that's going to do, it's going to hurt you in the long term.

[00:11:59] That means that your monthly recurring revenue is going to go down, down, down, down and down.

[00:12:04] So the churn or the cancellation, that's just par for the course.

[00:12:09] So if you only have a 10% cancellation rate each month and say that 10% equals just 10 people, but you bring in 15 new people each month, you're going to be at a positive number.

[00:12:23] So those are some of the cons to building a monthly recurring revenue business model.

[00:12:29] The next thing we want to jump to is what are the steps to build the monthly recurring revenue model?

[00:12:35] We know what the benefits are.

[00:12:37] And now we have to figure out what are the steps to make this come true.

[00:12:42] And a lot is going to depend on what you sell, be it a physical product, digital product or service.

[00:12:48] But at the end of today's episode, I'm going to give you guys some examples, some real life examples of each one of those types of products that you sell.

[00:12:57] So step number one to build a monthly recurring revenue model is you have to commit to the business model.

[00:13:04] So I know that sounds super simplistic, but it's true.

[00:13:07] So in order for you to make this work, guys, you have to make a commitment to see it through.

[00:13:11] When you go to the subscription business model, a lot of times you're not going to, it's not going to take off right away.

[00:13:18] And that, that leads us to point number two or step number two, create an irresistible offer that your ideal client can't say no to create an irresistible offer for your ideal client that they can't say no to.

[00:13:33] So for example, you want the offer to be such a no brainer that your audience would feel silly or stupid if they didn't take you up on that.

[00:13:41] Okay.

[00:13:43] And I'm going to give you several examples right now off the top of my head software.

[00:13:48] What type of software do you use?

[00:13:50] Most times with software, they're going to say, hey, 14 day free trial.

[00:13:56] ClickFunnels does that a lot of other software does that 14 day free trial.

[00:14:01] If you don't like it, then you don't pay for it.

[00:14:03] Now, some other companies even go a step further and they don't even ask you to put in a credit card.

[00:14:10] Now, a lot of them do.

[00:14:12] They won't charge it until after your 14 day or your free trial period is over.

[00:14:16] But make a resistible offer for your ideal client so they can't say no.

[00:14:22] And what happens, especially with software is if you start getting hooked to the software and you start using it like Canva.

[00:14:30] Right.

[00:14:31] Most of you probably use Canva when you're doing your art and your graphics and stuff like that.

[00:14:36] Canva Pro, I think is 1295.

[00:14:39] I can't live without it because that's how I create a lot of my stuff.

[00:14:42] But I believe they even gave you a free.

[00:14:45] There's a free version, I believe, but it has a watermark or something on it.

[00:14:48] So create an irresistible offer that your ideal client cannot say no to.

[00:14:55] Not that everybody, you don't want everybody.

[00:14:57] You want your ideal client.

[00:14:59] And this is why it's important to understand what or who your avatar is and who you're selling to.

[00:15:05] You want that avatar to have an irresistible offer that they can't say no to.

[00:15:11] Step number three, create the right messaging.

[00:15:14] So you're going to need to craft a powerful message and a clear message that calls out your ideal client and draws them into you.

[00:15:22] So here's a real life example.

[00:15:24] And I'll use Drop Funnels, which is a competitor of ClickFunnels that I use.

[00:15:29] So you go to the Drop Funnels homepage and it says the number one platform to sell and deliver your expertise.

[00:15:35] And I'm not going to read all of it, but we do things differently.

[00:15:39] Unlimited sales funnels, authority websites and high ranking blogs, beautiful and powerful digital courses, automatic SMS and email sales pipelines and much, much more.

[00:15:51] So basically they're giving you the language and the verbiage.

[00:15:55] Okay.

[00:15:56] The right messaging to the right market.

[00:15:59] So that's just an example.

[00:16:01] Number three, create the right messaging.

[00:16:04] What are the benefits of using my product and or service?

[00:16:08] Okay.

[00:16:09] So not what the features are, but what are the benefits?

[00:16:12] Oh, you'll be able to make more money.

[00:16:14] I'll be able to create landing pages and websites more quickly.

[00:16:17] Uh, I'll save time.

[00:16:19] So you have to focus on the benefits.

[00:16:22] So number three is create the right messaging.

[00:16:24] And what we're talking about right now is steps to build a monthly recurring revenue model.

[00:16:29] Number one, commit to the business model.

[00:16:32] Number two, create an irresistible offer your ideal client can't say no to.

[00:16:36] Number three, we just talked about create the right messaging.

[00:16:40] Number four, make it easy to find you and buy from you.

[00:16:43] So be where your customers are and make the purchase options super simple.

[00:16:49] So when you see the 14 day free trials for these, uh, uh, software programs, it's making

[00:16:55] it simple.

[00:16:56] I have nothing to lose and I can try this for 14 days, right?

[00:17:00] So as I mentioned earlier, some of them don't even require you to put your credit card

[00:17:04] information in.

[00:17:06] So number four, make it easy to find you and buy from you.

[00:17:09] So if you're selling to a particular audience, where does that audience hang out?

[00:17:14] If you're selling software to entrepreneurs, maybe you go into Facebook groups for entrepreneurs,

[00:17:20] you start running ads or whatever, but you need to make yourself easy to find and buy from.

[00:17:27] And so one of the biggest, uh, things about abandoned carts, right?

[00:17:31] This is why Amazon is so popular.

[00:17:33] When you go on Amazon to shop, they already have your credit card information after you

[00:17:38] put it in at one time.

[00:17:39] So all you do, you find something, click the buy button and now it's done.

[00:17:43] You don't have to go into your pocket and pull out your credit card and read it and do

[00:17:48] all of that stuff.

[00:17:49] Now it's already there.

[00:17:51] So make it easy to find and easy to buy from you.

[00:17:54] Now, um, matter of fact, Shopify, uh, just teamed up with Amazon and you actually on your Shopify

[00:18:01] stores.

[00:18:02] Now you can let people buy with their Amazon, uh, Amazon cards with the Amazon prime account.

[00:18:09] Now you're going to need to have inventory in Amazon, but as opposed to people going on

[00:18:14] your regular Shopify store, if they're a first time customer going into their wallet or pocket

[00:18:19] book, pulling out their credit card, putting the stuff in, they can actually check out with

[00:18:24] their Amazon prime account.

[00:18:25] So that's something that actually just started a several months ago.

[00:18:29] So if you are in the e-commerce and you have Shopify as your e-commerce platform, make sure you check

[00:18:35] that out.

[00:18:35] I haven't done it as of yet on any of my Shopify plans, but I have a buddy that, uh, has a one in his,

[00:18:42] uh, his new business.

[00:18:43] And he said the conversions are actually a little bit higher because people already have Amazon.

[00:18:48] They trust Amazon and it takes away or gives them the ability to make an easy purchase.

[00:18:55] Okay.

[00:18:56] Now, step number five, deliver on customer service.

[00:18:59] And we're talking about steps to build a monthly recurring revenue model, deliver on customer

[00:19:04] service.

[00:19:04] So the quickest thing that'll make you lose customers guys is your lack of service.

[00:19:09] And we all know that from personal experiences.

[00:19:12] I've left, um, Verizon, uh, not Verizon Comcast internet for Verizon, just because Comcast back

[00:19:21] at the end of day, this service was horrible.

[00:19:24] How many times do you make a call and you get put on hold and you get this automated voice

[00:19:29] system and you're still on hold for 20 or 30 minutes.

[00:19:32] So because now you have a monthly recurring revenue model, I'm not saying that you don't

[00:19:38] continue to generate sales because obviously you're going to have attrition, but you can

[00:19:43] focus more resources in time or now delivering on customer service, making sure that your

[00:19:49] current customers are there and that your attrition or your cancellation doesn't happen as fast.

[00:19:56] Okay.

[00:19:56] And that's going to happen.

[00:19:57] Your churn or subscription cancellation, but the better you are at responding and creating

[00:20:02] a great customer service, uh, outlook where people understand that, Hey, if I have an issue,

[00:20:08] if I email, they're going to get back to me within a certain period of time.

[00:20:12] If I text or call or whatever.

[00:20:14] So you got to make sure that you deliver on customer service.

[00:20:18] So those are the five steps to build a monthly recurring revenue model.

[00:20:22] Number one, commit to the business model to create an irresistible offer.

[00:20:27] Your ideal client can't say no to three, create the right message for make it easy to find and

[00:20:33] to buy from you and five deliver on customer service.

[00:20:37] So we talked about the benefits of monthly recurring revenue business model.

[00:20:42] I gave you guys some pros and cons, and I just gave you five steps to build that monthly

[00:20:47] recurring revenue model.

[00:20:48] Now let's take a look at several types of monthly recurring revenue models as it pertains

[00:20:54] to certain types of businesses.

[00:20:56] So if you've listened to the podcast for any period of time, you guys know that I've told

[00:21:00] you there's only six type of things that you can sell.

[00:21:03] That's it.

[00:21:04] Now under those six columns or verticals, there's millions of different things, but there are

[00:21:09] only six type of things that you can sell.

[00:21:11] Number one, your physical products.

[00:21:13] Number two, your digital products.

[00:21:15] Number three, your services.

[00:21:18] Number four, somebody else's physical products.

[00:21:21] Number five, somebody else's digital products.

[00:21:24] And number six, somebody else's services.

[00:21:27] Those are the only six things that you can sell.

[00:21:30] I don't care what it is you sell and you're not going to find anything else that you can

[00:21:35] sell any other additional categories.

[00:21:37] So let's start off with physical product examples.

[00:21:41] And these are examples of implementing a monthly recurring revenue model in a physical product

[00:21:47] example.

[00:21:48] So there's a subscription box company.

[00:21:51] Well, before we get to that, a subscription box is a box that you get every month and it's

[00:21:58] filled with different products in it.

[00:21:59] So the one I'm going to talk about is stitch fix, stitch fix.

[00:22:04] And what that is, it's an online personal styling service that basically every month, send

[00:22:10] you a subscription box of different clothes and items picked out specifically by you.

[00:22:16] So what you do when you go to stitch fix, you put the information in what you like, what

[00:22:20] you don't like and all that good stuff.

[00:22:22] And what it does, it mimics a personal shopper.

[00:22:26] And each month, they're going to send you some new products based on what your likes are

[00:22:31] and what your style is.

[00:22:33] And so that is a subscription box business for a physical product.

[00:22:37] So they sell all types of shirts, clothings, accessory and all of that type of stuff.

[00:22:42] So that's a physical products example.

[00:22:45] Now, another example for selling a physical product through subscription is Harry's razors.

[00:22:51] Now I use Harry's razors and I'm on a subscription plan.

[00:22:56] Now you can buy them individually on their website or you can sign up for a monthly subscription

[00:23:02] plan.

[00:23:02] I started out buying them individually to test them out.

[00:23:06] And then once I found that I liked them, I said, you know what?

[00:23:09] It's a little cheaper doing a subscription plan.

[00:23:11] Let me go ahead and do that so I don't have to go and buy them from Costco.

[00:23:15] Now they're delivered to me once a month.

[00:23:18] So Harry's razors, that's another example of a physical product that uses a monthly recurrent

[00:23:24] revenue model.

[00:23:26] Now let's look at some examples of a digital products monthly recurrent revenue model.

[00:23:31] So I mentioned earlier software.

[00:23:34] Software is a great type of product that you can use or sell on a monthly recurrent revenue

[00:23:40] or subscription basis.

[00:23:42] And many of the top software companies use this model such as Shopify, Leadpages, QuickBooks,

[00:23:49] whatever.

[00:23:50] You can create your own software to resell or you can resell other people's software and

[00:23:56] make monthly recurrent revenue like ClickFunnels or DropFunnels.

[00:24:00] So I'm an associate or an affiliate for DropFunnels.

[00:24:03] So if somebody signs up under my affiliate link, then I still get a percentage of what they

[00:24:10] get billed each month, month after month after month.

[00:24:14] So software as a service.

[00:24:16] And that could be once again, selling as an affiliate or creating your own software.

[00:24:21] But that's where monthly recurrent revenue is a killer, man.

[00:24:26] So these tech companies, software companies that have big software that people use, as

[00:24:31] I mentioned, QuickBooks, Leadpages, ClickFunnels, DropFunnels, all of these types of Shopify, monthly

[00:24:39] recurring revenue.

[00:24:41] So each month they're going to get new customers and they're going to lose customers, but they

[00:24:46] hope that their attrition doesn't outnumber them bringing on new customers.

[00:24:50] Another digital products example is if you have an online membership program, right?

[00:24:56] So you can create an online coaching program with monthly membership fees.

[00:25:01] So if you're a coach, in addition to just selling individual, you know, coaching sessions or coaching

[00:25:07] time or whatever you're selling, you can create a monthly online coaching program where each

[00:25:14] month they pay you whatever it is you charge.

[00:25:17] And for that they may get a free coaching session individually, maybe group coaching.

[00:25:24] It may be PDF downloads, resources or whatever.

[00:25:27] But that's an example of a digital products example.

[00:25:31] Another one is it could be an online membership directory.

[00:25:35] Okay.

[00:25:36] Where people pay you to be listed on the platform.

[00:25:38] So for example, if you had a membership site that was a list of black lawyers in the city

[00:25:47] of Philadelphia, and in order to be on this membership site, you have to pay a monthly membership

[00:25:52] fee.

[00:25:53] And what happens people will go, if you got enough traffic, search the site.

[00:25:59] They'll look at the specialty, what type of attorney they need.

[00:26:02] Maybe it's an accident attorney or workers comp attorney.

[00:26:05] So now John Jones, who's an accident attorney, pays a monthly fee and he's getting leads from

[00:26:12] that site.

[00:26:13] So that's another form of a digital product example.

[00:26:17] And I mentioned also before bebeacademy.com.

[00:26:20] That is a monthly subscription.

[00:26:22] So I have over 15 different online courses and masterclasses in bebeacademy.com.

[00:26:29] But the benefit is as opposed to you guys having to buy all of those courses individually, I

[00:26:36] changed it to a subscription model where you have one monthly subscription fee, but you

[00:26:41] have access to everything inside the academy.

[00:26:44] So it's a win win for, for the people that want to join the academy and obviously for my

[00:26:50] business.

[00:26:50] So now I have a subscription model.

[00:26:53] Okay.

[00:26:54] And what we're talking about right now is several types of monthly recurring revenue models.

[00:26:58] I gave you the physical product examples, the digital product examples, and now I want

[00:27:04] to give you some service examples.

[00:27:06] So you can have a, uh, based on your products or services that you're selling, you can have

[00:27:11] a warranty or a service plan.

[00:27:13] So you can create a monthly plan for all of your other products with a warranty or service

[00:27:18] plan.

[00:27:21] So if you're a web designer and you get paid for building websites, you can actually have

[00:27:26] a service fee that to make sure that the site is updated.

[00:27:31] Everything is fresh and everything is working correctly.

[00:27:34] So that's an example of a monthly recurring revenue model to a web designer.

[00:27:38] Okay.

[00:27:39] So they're not just getting paid for building your website.

[00:27:43] Now they're getting each and every month, a warranty or a service plan.

[00:27:47] That's going to ensure that your website is up and any issues or problems that you have

[00:27:52] are taken care of.

[00:27:53] Okay.

[00:27:54] Another service example is a retainer, a service retainer.

[00:27:58] So you can have a monthly retainer, uh, for your services like a lawyer or CPA.

[00:28:03] So my attorney is on a monthly retainer.

[00:28:07] And so each month I pay him a certain amount and I have access to them at any time.

[00:28:14] So you see that all the time with the warranties and service plans.

[00:28:18] You guys see that a lot too.

[00:28:20] So if you go into Best Buy or you're buying a TV or something like that, they're always

[00:28:25] going to ask you, do you want to buy the service plan?

[00:28:27] Now, most times the service plan is a one time hit, but there are other service plans

[00:28:33] that hit you on a monthly basis.

[00:28:35] Okay.

[00:28:35] So that's what we're talking about today, guys, is make more money with a recurring revenue

[00:28:41] model.

[00:28:42] And to me, if you're able to implement this, it just makes sense to give you a

[00:28:48] some stability and predictability for your business.

[00:28:52] And it doesn't matter what type of business that you have.

[00:28:55] I just gave you an example of several examples of a physical product, digital product and service

[00:29:00] example.

[00:29:01] And the reason I created a B E B Academy was because I had a lot of people reaching out to

[00:29:07] me that was saying, man, I want to take multiple courses that you have in programs, but I don't

[00:29:13] have the money.

[00:29:15] So if you have, like I said, 12 to 15 different programs inside the Academy, if you bought

[00:29:21] those individually, you'd be spending thousands of dollars, three, $4,000.

[00:29:25] But I said, you know what?

[00:29:27] It's, it makes sense to me for the Academy to be able to offer it on a monthly subscription

[00:29:34] basis, which is going to give me predictable income and also allow the B E B family members

[00:29:40] access to more courses for a lesser amount each month.

[00:29:45] And you can stop and cancel at any time that you want.

[00:29:49] So, but you, I have options.

[00:29:51] I have payment options.

[00:29:52] So if you want to pay it yearly, then you'll get a discount.

[00:29:56] But if you want to pay it monthly month to month, you're able to do that.

[00:30:00] And I'm going to tell you guys, it's made a major change in this business that I have.

[00:30:05] I have multiple businesses, but in terms of the black entrepreneur blueprint ecosystem,

[00:30:09] that one change or transition from paying individually.

[00:30:15] Now I still have some individual courses.

[00:30:17] All my flagship courses are individual brand builder Academy elite.

[00:30:21] That's an individual program and pinpoint and monetize your genius.

[00:30:26] Those are separate flagship programs that I have, but all my other stuff I put inside the

[00:30:32] Academy marketing courses, PDF downloads, scaling your business.

[00:30:38] Everything else is inside the Academy.

[00:30:41] So make sure if you want to get three days free access, go to be be academy.com or just go

[00:30:47] to the website black entrepreneur blueprint.com and you'll see it on the front page.

[00:30:52] So this is something guys that can be the difference between life or death when it comes to your business,

[00:30:59] right?

[00:31:00] Your business health.

[00:31:01] You may be in a situation right now where your business is failing or you're not doing

[00:31:06] as well as you want to do or need to do to stay in business.

[00:31:10] And this transition and this, uh, to this monthly recurring revenue model may be something that you

[00:31:16] want to look at, especially if you're doing coaching or things like that, or online courses,

[00:31:22] very simple to implement.

[00:31:24] So if you're doing coaching, as opposed to charging one fee upfront, you can have assets that complement

[00:31:33] what you're doing, your coaching business.

[00:31:35] And in order to access those, those resources or assets, they have to be in a monthly recurring program.

[00:31:43] Okay.

[00:31:43] As a coach, it could be something as simple as you have a group coaching session that you got

[00:31:50] to pay for every month in addition to the assets.

[00:31:53] So look at ways that you can implement the monthly recurring revenue model in your business.

[00:31:59] And it doesn't matter if you're selling physical products either.

[00:32:02] So it could be a warranty.

[00:32:04] As I mentioned, you sell physical products.

[00:32:06] It could be a warranty.

[00:32:07] It could be unlimited upgrades, things of that nature.

[00:32:11] And just by tweaking your current business model or by adding on a new component of monthly

[00:32:18] recurring revenue, I'm telling you guys, it could be a game changer or lifesaver in your

[00:32:23] business.

[00:32:24] Now, before we get to the last quarter of the show, let me just share all my social media contact

[00:32:29] information and resource links.

[00:32:31] The easy way is this guys.

[00:32:33] Everything I'm about to tell you is on my website, blackentrepreneurblueprint.com.

[00:32:39] So go to the website, blackentrepreneurblueprint.com.

[00:32:43] I mentioned BEB Academy.

[00:32:45] That's right on the front page of the website.

[00:32:47] Brand Builder Academy Elite.

[00:32:49] If you're looking to build a successful, sustainable e-commerce business with physical and digital

[00:32:54] products, it's on the front page of the website.

[00:32:57] Pinpoint and monetize your genius.

[00:32:59] If you're tired of starting businesses where you're not satisfied, fulfilled or happy, pinpoint

[00:33:06] and monetize your genius is the program for you.

[00:33:09] Pound for pound.

[00:33:09] One of my best programs.

[00:33:11] Your genius is the intersection of your passion and your talent.

[00:33:14] But the problem is most people don't know how to monetize it.

[00:33:17] And that's what that course does.

[00:33:20] Also, my book is on there, A New Black Wall Street.

[00:33:23] Everything you want is on the website, blackentrepreneurblueprint.com.

[00:33:27] Now, if you want to connect with me, anything long, hit me on my email, jjones at blackentrepreneurblueprint.com.

[00:33:35] That's j-a-y-j-o-n-e-s at blackentrepreneurblueprint.com.

[00:33:39] Facebook, Black Entrepreneur Blueprint.

[00:33:42] Twitter, jjones001.

[00:33:45] j-a-y-j-o-n-e-s-0-0-1.

[00:33:48] Instagram, I got two IG accounts.

[00:33:51] The first one is jjones4real.

[00:33:53] J-a-y-j-o-n-e-s.

[00:33:55] The number four, R-E-A-L.

[00:33:58] Second one is Black Entrepreneur Blueprint.

[00:34:01] Don't forget to connect with me on LinkedIn.

[00:34:03] Just go to LinkedIn, type in jjonesblackentrepreneurblueprint, and you'll see me there.

[00:34:08] Make sure you connect with me on LinkedIn.

[00:34:10] Also on YouTube, guys, make sure you subscribe to the YouTube channel.

[00:34:14] I have additional content on YouTube that is not on the podcast.

[00:34:18] So go to YouTube, type in Black Entrepreneur Blueprint, and hit that subscribe button.

[00:34:24] Clubhouse, I have a profile up there, but I'm not really on there.

[00:34:28] At I am jjones if you want to connect with me on Clubhouse.

[00:34:32] But like I said, I rarely even go on there.

[00:34:35] I may listen to a couple of things, but I really don't do a lot on Clubhouse.

[00:34:40] So those are all my social media contact information, guys.

[00:34:43] Make sure you go to the website blackentrepreneurblueprint.com.

[00:34:48] Everything I just said is there.

[00:34:49] If you want a shortcut, you don't want to type all of that out.

[00:34:54] BEBConnect is going to take you right to the website, BEBConnect.com.

[00:34:59] Now, let's get to the last quarter of the show.

[00:35:03] And what we're talking about today, guys, is making more money with a monthly recurring revenue model.

[00:35:08] Now, I've told this story before, but for those of you that hadn't heard it, several years ago, I had a product which was a nootropic that's supposed to help you focus and clarify and think better.

[00:35:20] And so what I did was before I went and, you know, got 500 bottles of the product, I took some samples from the manufacturer, had some labels made up.

[00:35:31] And as opposed to what most people would do, buy 100 or 500 bottles and then try to go ahead and sell them and then probably have them sit in your garage or basement for the next 20 years.

[00:35:43] I wanted to test it out.

[00:35:45] So what I did was I created a subscription model program for the nootropic.

[00:35:50] And what I did was I tried the product.

[00:35:53] I had several other people try it.

[00:35:55] We both liked it all.

[00:35:56] I think it was four or five of us.

[00:35:57] We all liked it.

[00:35:58] So I said, all right, let me go test this out.

[00:36:00] First thing I did was I went to the manufacturer and I said, hey, I've already got my labels printed out.

[00:36:07] Once I make an order, how quickly can you get the order to me?

[00:36:11] And they said, once you place an order, we'll have it out with your labels within three to four days.

[00:36:16] I was like, OK, cool.

[00:36:17] So I don't need to buy a ton of inventory, have it sitting in my basement if I can't move this stuff.

[00:36:23] So what I did was I created a landing page and it was an offer on the page.

[00:36:28] It was a subscription model offer.

[00:36:30] So I ran all types of traffic to it, native advertising, Facebook, all of that good stuff.

[00:36:36] So the product cost me from the manufacturer like four dollars and I set it up in a subscription model.

[00:36:42] And what I did was is I had on my my marketing and advertising on the landing page and I had several different target customers.

[00:36:51] I had college students that were studying and need to focus.

[00:36:54] I had entrepreneurs.

[00:36:55] I had marketing going out to that needed to focus.

[00:36:59] And I think it was another group.

[00:37:00] I can't remember who the other group I targeted.

[00:37:02] But what happens was you can go out and you can buy get the first bottle free only six dollars and ninety five cents shipping.

[00:37:11] After that 30 days after I sent out that bottle, you are on a subscription where I would charge you twenty nine ninety five.

[00:37:19] And what I did was I said, well, let me test this first before I go buy all these bottles.

[00:37:25] And my goal and objective was if I sold twenty five bottles within the first couple of days, then I was going to keep, you know, promoting the product.

[00:37:36] And what happened?

[00:37:37] And here's what would happen if I didn't get twenty five.

[00:37:40] I was just going to refund the people's monies and just take that L.

[00:37:43] But I always talk about testing, test, test, test and then test some more.

[00:37:48] And so I started selling the product because I got over like thirty subscriptions already within like two or three days.

[00:37:56] And I'm, you know, shipping out the product and stuff.

[00:37:58] And the product was going very well.

[00:38:01] I was getting averaging probably about seventy five to ninety.

[00:38:07] I think seventy five to ninety new subscriptions a month.

[00:38:10] And that's at thirty dollars a piece.

[00:38:12] So as the months went on, my revenue, I was up to fifteen, eighteen, twenty thousand dollars a month.

[00:38:20] And then unfortunately what happened was the my manufacturer of the product stopped manufacturing the product.

[00:38:27] I private labeled it and they they stopped the manufacturing of the product and I was jacked up and I couldn't find anything that I like that was good enough to replace that product.

[00:38:39] But what I saw, though, was a consistent growth in the revenue each month based on the monthly recurring revenue business model.

[00:38:48] So as opposed to me selling, you know, one pill or one bottle at a time and hoping they came back, I put them on a subscription model.

[00:38:57] Now, did I have attrition?

[00:38:59] Of course, you're going to have people that are, you know, canceling your product.

[00:39:03] That's that's true with anything.

[00:39:05] It doesn't matter if you are a Fortune 500 company or Fortune 100 company.

[00:39:09] People aren't going to stay on your subscription.

[00:39:12] Now, what I found in that business, since I was only in the business for nine months before that product was discontinued, I think I had about a 17 to 18 percent attrition.

[00:39:25] So if out of 100 people, 17 or 18 would drop off for the next month.

[00:39:31] But the thing was, I was bringing on more people than I was losing.

[00:39:37] And another real life example, too, I want to tell you guys about years ago, you know, I've owned over 17 businesses.

[00:39:44] I was an ADT dealer security system alarm dealer.

[00:39:48] And that's the way that business worked.

[00:39:51] And so one of the beauties of that business was this.

[00:39:54] So you could get a quote unquote free basic system, front door sensor, back door sensor, motion sensor and a couple of window contacts for twenty nine ninety five.

[00:40:06] Right. A month.

[00:40:07] So what would happen would be my guys would go out and sell it.

[00:40:11] Just say thirty dollars a month.

[00:40:13] What I would do is I would take that contract and I would sell it to ADT.

[00:40:19] ADT would pay me thirty two times that whatever that monthly bill was.

[00:40:24] So in that instance, thirty two times thirty equals nine hundred and sixty dollars.

[00:40:29] So I go and sell the contract for nine sixty out of that nine sixty.

[00:40:34] My equipment costs about two twenty.

[00:40:37] My installation costs one hundred and fifty.

[00:40:40] And then my sales commission was like two hundred dollars on it.

[00:40:45] So out of nine sixty, I would net about three ninety to four hundred dollars, which wasn't bad.

[00:40:51] But what I started doing was I started listening to some of the guys that were in the industry before me.

[00:40:56] And a lot of them weren't selling all of their contracts.

[00:41:00] They were self financing their contracts.

[00:41:03] And so what I started doing was I would sell one contract and then I would keep the monthly recurring revenue for the other contract.

[00:41:11] So I'd sell one contract for nine hundred and sixty dollars.

[00:41:15] And then the next time one of my sales reps sold the system, I would self finance that, meaning that I would pay for the equipment commissions and installation out of my own pocket.

[00:41:26] But now I'm getting the thirty dollars a month monthly recurring revenue.

[00:41:31] And that's how I kind of built that business up where I started not even going to 80 T and selling the contracts.

[00:41:38] So if anybody ever was in the alarm business, the monitoring only cost about three to four dollars a month.

[00:41:46] Right. So you're getting thirty dollars a month in.

[00:41:48] But your central monitoring station charges you now back at that time was like three dollars.

[00:41:53] So I was making twenty seven dollars a month off of that security system.

[00:41:58] So when I have a hundred customers, five hundred customers, a thousand customers, you can see how that monthly recurring revenue would build up.

[00:42:07] So what I did was I once again, I had a combination.

[00:42:10] I'd sell a contract over here, one or two, and then I would keep one to get that monthly recurring revenue.

[00:42:17] And what started happening was when I was selling the contracts to a DT, the attrition, if they didn't pay for the first six months, I got charged back that whole nine hundred and sixty dollars.

[00:42:32] So I'm like, man, you know, if it's people are having a hard time, that alarm bill is one of the first bills they're not going to pay.

[00:42:39] So I said, OK, I need to be able to be in control of the contracts so I don't get all of these chargebacks.

[00:42:45] So the only stuff that I or paper that I would sell to a DT is the high quality a credit paper because I knew they weren't going to mess up.

[00:42:55] Now, I took a little risk by taking some of the B and C paper and holding it myself.

[00:43:01] But I knew that if I could keep that account on for 12 months, I'd pretty much have be free and clear.

[00:43:09] All right. So that was the benefit of having monthly recurring revenue.

[00:43:14] And when I sold the business, in addition to the equipment, what I sold was those contracts.

[00:43:21] I sold the monthly recurring revenue and I got a nice multiple for that.

[00:43:26] And so I was able to cash out of that business because I had monthly recurring revenue.

[00:43:32] So there's a way that you can implement this in your business.

[00:43:36] It doesn't have to be the only way that you're making money.

[00:43:38] But if you can find a component that gives you that MRR or that subscription revenue, definitely make sure you try to put that in there because it's a game changer.

[00:43:49] You got 100 clients, right?

[00:43:52] And they're paying you X amount of dollars a month.

[00:43:54] You know that each month you're getting twenty five thousand dollars.

[00:43:58] It's given. It's a wrap.

[00:44:01] You got that.

[00:44:01] You're not worrying about, damn, I got to sell X amount of units this month to be able to hit this certain goal.

[00:44:08] You get tired of having to start from zero at the beginning of every month.

[00:44:12] So really start looking at monthly recurring revenue, that type of business model, and try to implement it into your business.

[00:44:19] Now, before we close on out, guys, I say this each and every week.

[00:44:23] We get more and more downloads because of you, the BEB family.

[00:44:27] I appreciate you guys so much.

[00:44:29] Please continue to spread the word about the podcast, the blog, the ecosystem, everything surrounding Black Entrepreneur Blueprint.

[00:44:38] It's all about elevating our entrepreneur IQ.

[00:44:41] And remember, it's not about me.

[00:44:42] It's not about you.

[00:44:43] It's about us.

[00:44:44] It's about building an economic power base in the worldwide black community by building and supporting black owned businesses.

[00:44:51] Love you guys.

[00:44:52] See you same time next week.

[00:44:54] Peace.

[00:44:54] you