How to generate a regular income in your business
Given the state of the economy at the moment, it’s now even more important to look at generating a regular income and possibly diversifying your business. Business owners are currently feeling the uncertainty, and many are worrying that they won’t be able to create enough cashflow to see themselves through the next financial year.
I‘ve been exploring how to make my business’s income more predictable; it’s something I’ve been thinking about for a few months, it’s now just a case of putting it into practice.
My idea is to set up a subscription service, so that my customers pay a set amount each month for the regular delivery of a product. The most important considerations for me include how much to charge and which products to provide. I think it’s worth mentioning that, as I will be benefitting from my customers’ loyalty each month, I need to introduce an incentive to make them want to pay out more in the long run, rather than having them make a simple one-off purchase.
Offer the customer a discount on the normal price you’d charge
This could be used as a ‘hook’ to get them interested.
Offer an incentive at the end of the subscription period to gain their continued custom
As the customer approaches the end of the 12-month subscription period (if that is the duration you’ve decided upon), offer them a bonus. This could be a free gift or a heavily discounted product. You want them to feel special and to have them believe that they’re getting more than your customers who purchase on an ad-hoc basis.
Make sure you have enough resources to fulfil demand
If your product proves popular and you snag lots of subscribers, you need to ensure that you can fulfil your offer—otherwise, you risk seriously damaging your business’s reputation. You may have to employ staff to assist with production; the alternative is capping the number of products you make and the number of subscriptions you can offer.
This idea can also be used for service industries, to help spread the cost of a highly priced item
Whatever your business does/makes, think about how you can generate a more regular, sustainable income—whether this is offering a chocolate box subscription like Hotel Chocolat, or services on a monthly basis, such as photography. It could make a big difference to your business.
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