For the last few months I’ve had the pleasure of getting an insiders view of the issues that my readers face. When people take my Pivot to Profit Quiz, I get a little summary of which major pivot points people are struggling with most.
Consistent Income is by far the biggest struggle for those who have opted to take the quiz.
In a general sense, “consistency” with income is directly related to marketing (people need to know who you are for them to buy from you AND you need to be getting in front of new people all the time to keep those numbers jetting up). And yet…I don’t think that marketing is the only thing that dictates a regular flow of cash in your business.
Over the last 3 years of running my consultancy and over the last year of running my brick and mortar beauty studio, I’ve had a lot of time to play and experiment with marketing and pricing. Through these experiments I’ve been able to semi-master income consistency.
Why do you want consistent income?
If you are a full-time entrepreneur then you likely miss your job for one reason (and maybe one reason ONLY). You miss the regularity of that paycheck. Even if it was never quite as much as you wanted, you could always plan on it being there for you. You could set a certain amount aside for retirement, another chunk for that Winter vacation and then a big lot towards your monthly expenses.
When you own your own business (as luxurious as it can feel at times), you are likely ALWAYS stressed about the regularity of your cashflow. Especially in the first two years of your business. If you aren’t stressed out about it anymore, then it’s because you’ve become immune to worrying (this seems to happen as you embrace the ebb and flow over time) or you are bloody rich and my congratulations go out to you!
But for the rest, cash flow consistency can be an ever-present worry that shines a negative light on the entire entrepreneurial journey.
Which makes me VERY happy to say this:
Creating steady income-flow is not as hard to achieve as you might think.
In fact, if you are strategic about it, it can be quite simple.
The “One and Done” model
I don’t have many “philosophies” about much…but I have become good at creating (and helping others create) consistent income to remove them from the perils of CASHFLOW CRISIS. I have a philosophy of sorts on the whole matter. I call this my One and Done approach.
Mostly because you just have to put some effort into creating it one time and then you are done! Yes, there will be tweaks and whatnot, but ideally, the less tinkering – the better!
Here are the traits of my One and Done model:
- Create one service or “experience” that you can offer on a retainer or regular basis (must establish a contract, it should be 6 months to a year).
- Price it lower then it would cost normally (benefit of contracted longer period of time).
- Create a payment plan whereby you get monthly payments for said experience.
- Determine how much steady money you want to make from this.
- Sell enough of these to bring in the consistent income.
- Cap entry into this “experience”
- Create a sales funnel to keep people moving towards this.
Sounds easy right? It actually is.
Let me use my brick and mortar beauty studio as a concrete example of how I’ve done this (including the monetary results):
- I created a VIP membership whereby my customers get $130 worth of services for $89 per month. Clients sign our agreement that outlines our policies and rules surrounding this when they sign up for membership.
- They get to choose from 3 distinct and fun services and the savings is obvious (see above).
- I use a booking software that auto-withdraws the $89 a month from my clients account on file.
- I initially decided that I wanted around $4500 to $5000 in consistent income (this would cover many of my fixed costs of operating the studio and take the pressure of inconsistency off my shoulders).
- I initially sold 50 and have now reset our goal to 100 (we are currently hovering around 65).
- As we have grown our members base I’ve had to cap it a few times to make sure I had enough staff to do these and other services.
- All new clients hear about our membership regularly. Not everyone is a fit for it, but many people are enamored with the idea of committing to a beauty routine at such a great price-point.
My studio is generating well over $5000 a month in no-brainer consistent income. Granted, I make less per minute on these appointments than I do on my other services, HOWEVER, it is totally worth it to me, because it drives a certain amount of steady income in. It also rewards our customers who are most dedicated to us.
In addition to getting a deal on services, all members get 10% off products and special invites and gifts when they sign up. It’s our way of saying THANK YOU for your business and it makes them feel like they are a part of something bigger.
And to top it off, a % of our revenue from these sales goes directly into supporting education for ladies in Uganda who cannot afford it (I’ll talk more about that in another post).
When all is said and done, our memberships do NOT make us the most money among all our service offerings, but they have proven to be very successful at helping us build our community as a business and at helping to put my mind at ease every month when it comes to cash flow.
Can this work for your business?
Not all of you have brick and mortar businesses or beauty shops (duh!) but you can likely still apply this model to what you do.
Examples from some of my current and previous consulting clients who use One and Done in their businesses:
Billie Gardner is a Online Business Manager and she only works with clients on long-term contracts for minimum amounts. Each month she knows exactly how much money will be coming in and what she would have to do to generate more.
Jenn Crego is a Web Developer (soon to be, if not already, Agency Boss Lady) who works with many clients on monthly retainers to ensure that their websites and sales platforms can keep up with their marketing efforts.
Anna Long-Stokes (ahem…ME) offers a limited number of affordable Back Pocket Strategy coaching for business owners who want support, strategy and accountability on the regular without all the fluff and filler (p.s. I only have 1 of these babies left!).
Heather Craig is a fitness genius who offers affordable BootyLuv fitness classes online for an affordable fee (gets more and more affordable the longer of a commitment that you make!)
This is a model that can be used offline and online. It can involve your tie directly or maybe it’s simply content and community that drive the value.
If you want more ideas for creating a membership program for your business, feel free to hit me up OR check out the book The Membership Economy for fun inspiration and ideas. I started my various memberships before reading this book, but it has sparked some great ideas about loyalty and retention that I hadn’t considered before.