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Ch. 15 | Building Recurring Revenue

Welcome to CFF-U Business Series!

Welcome back to CFF university. We’re talking now about, uh, a topic that is very important, but in the transportation industry might be a little bit difficult, but certainly something that if we’re talking about, how do you build a great business? We should talk about recurring revenue.

How To Create Recurring Revenue

How do you create recurring revenue? Recurring revenue means that you are not broke on the first of every month that you have, um, expected revenue that will come in whether or not you sell something new. So let’s give a perfect example. They’re typically contractual based revenue streams. If you’re getting freight, um, on load boards and after you deliver a load of freight or cars, or what have you, you are just simply going back to the load boards and finding new sources of work that is not recurring revenue.

However, if you have a contract that says every month, you will haul X amount of freight from one location to the other, for a manufacturing company, and you are guaranteed a certain amount every month, whether you haul it or not, that’s re recurring revenue that’s revenue that you can count on every single month. And the reason it becomes so important in business.

Recurring Revenue Fixes Cash Flow Problems

Cashflow is One of the primary things that keeps us up at night. Are we going to have more month at the end of the money? And therefore, if we can get some guaranteed money, it makes life easier solve some of our cashflow problem. And ideally if we have enough recurring revenue, it solves all of our cashflow problem. In other words, all of our fixed expenses could be covered by recurring revenue. So let me give you a few other examples of what recurring revenue looks like. And then this episode is really for you to just think, what could you put into place to make sure that recurring revenue could happen for you?

The first is a service contract right now in transportation. It’s a little bit challenging to get a shipper to pay you whether you haul for them or not. I understand it, but it may not be as difficult to get a great contract that says, if you give me five trucks, I’ll guarantee that each truck will do 15,000 a month worth of revenue.

Recurring Revenue Example

I have as much work as you guys can haul for me for the next 24 months. That is a version of solving a cashflow problem and recurring revenue. Perhaps you’re in the, let’s say you’re in the towing and automotive business and you have an automotive repair shop. And every time you do a repair for a customer, you then put them on a $29.99 a month free checkup. And that means that every month you build their credit card, $29 and 99 cents. If they want to use it, they can come into your auto body shop or your repair shop. And you’ll do the quick inspection, right?

You’ll check the fluids, you’ll check the tires, you’ll check the belts, just to make sure that the vehicle is safe. If they don’t use it, you got $29 and 99 cents. And if a hundred of your customers signed up for that, you’re making $3,000 a month every month, whether or not they use the quick, the free checkup.

Creative Membership To Your Newsletter, Blog, etc.

So just think about that. Something else may be for some of the more creatives that we might have, maybe you like to write, and you would be interested in creating a newsletter for your industry. And I know I’m stretching a little bit here, but recurring revenue is such an important factor in business that I want to give you different ideas of how it could be created. But if you created a membership model where you wrote something about your industry as an industry expert, and you charge $9 and 99 cents a month, and you had a thousand people eventually over the course of 12 months, signed up for your monthly newsletter. Now you’re making almost $10,000 a month, just off your newsletter. That’s $120,000 a year, guaranteed recurring revenue strong.

Subscription Model

What if you did, um, um, you know, that’s probably more like a subscription model. Um, but if you were in the air conditioning business, for example, and every time you did a repair on an air conditioning unit, you put those customers into your $49 and 99 cents monthly checkup.

You did it once a quarter, but you build the customer once a month. So you brought in $150 a quarter, that’s $49, 50 bucks a month, times, three months. And you sent out a technician out there and all they did was just put a hose to the coils on the air conditioning unit and boom, the air conditioning lasts longer. Those are versions of recurring revenue. And, and within our burn, the ships model, we have seen dozens of people who have left our burn, the ships boot camps, and learned about recurring revenue and then created a version of recurring revenue that helped offset the burden of how do I hit cashflow every month.

Find Real Customers – Recap

Again, in transportation, the best way to get recurring revenue in your business is contractually go out and find real customers that you can put under contract for a specific period of time for a specific amount of revenue every month. And you will begin to solve the ups and downs, the chicken and feathers existence that so many businesses have when it comes to cashflow. So just something to think about, what would it look like if you had a bigger, stronger, faster, larger recurring revenue model in your business, we’ll see you in the next episode,

We’ll see you in chapter 15.


Do you want to book the highest paying truckloads and stop focusing only on the loads that pay quickly? Factoring your freight bills can help you with your cash flow so that you can book more loads and get paid the same day.

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About Commercial Fleet Financing, Inc.:

At Commercial Fleet Financing (CFF), our pros have given smart advice to fleet owners and owner-operators in the transportation, moving, towing or construction industries for more than two decades. With CFF, finding the right financing solutions is a phone call away and most borrowers secure commercial vehicle financing with ease. To talk directly with one of our finance pros and get started with credit approval in as little as two hours, CFF’s phone number is (469) 281-2962.

2021-07-30T11:25:53-05:00
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