In the Competition thread, a handful of folks were discussing selling monthly payments for annual packages. Package deals, as I’ll refer to them since I don’t exactly know what to call it so we have a common phrase to unify the information. If anyone thinks of anything let me know.
Check out this post over there if you have no idea what I’m talking about. I probably don’t either.
I’m kinda intrigued by the idea of recurring revenue so I tried to run the numbers and I’m missing something in the math I think.
I get that July customers will pay into the next year, but looking at rolling 12 month periods and it seems like it would take an incredibly long time to see the financial benefit of this.
Can we talk about this? Because I’d love to have recurring revenue in Dec, Jan, Feb on top of the money I squirrel away throughout the year, but why is this being promoted by Josh Latimer as such a financial windfall if you have to worry about non payments and years to see a payback.
Also, if you see a problem with my numbers I’m sure I’m missing something so hit me over the head with it.
I think it’s the constant cash flow is why he promotes it. I agree though, it doesn’t make much sense.
If you were a full service window cleaning company as well I think the packages/subscriptions start to make more sense. As you can sell people on getting there windows done 3 x a year
Spring- gutter clean out, roof wash, house wash, driveway cleaning, in/out windows
Middle of Summer- Exterior windows only
Fall- gutter clean out, house wash, in/out windows
You’d have to live in very wealthy area to sell a package like that though…
Anything less and it definitely not worth it.
The constant cash flow is nice, I do net 30 on all my invoices just because I like the constant flow coming in.
In your example above, the math isn’t working out because in line A your looking at $39/mo x 20 clients x 12 months. So that is $9360 a year for ONLY 20 clients.
However, in line D your looking at a one time wash of $468 x 20 clients each month. So that is $112,320 but 240 clients.
Your not taking into account adding new accounts each month for the monthly plan. If you divide the $9360 that is 240 “payments” but still only the same 20 clients.
I’m no mathematician, but I ran the numbers. And if you look at a 12 month span (the first 12 months), its still not going to add up the same as looking at the $468 x 20 a month x 12 months. It looks like its roughly half of that. Somewhere in the neighborhood of $60k. But you have to keep in mind that your additional 20 clients your adding each month will take longer than that first 12 month span to recoup your money. So I would think if your wanting to seriously look at this option, you might want to run the numbers for a few years to see if it makes sense. Anyway, hope that helps.
I know. It’s very optimistic. I think I’m gonna go ahead and do Christmas lights this year since I’m trying to hire at least one person prior to a big project in September/October and I want to keep him busy. I’m trying to find a reason to try the “subscription” model for the Christmas lights, but I just can’t other than recurring revenue.
The best thing I know of to get paid a lot of “recurring” revenue is don’t stop marketing. Lol
Exactly. The only thing I could really think of otherwise is if I sold it as a single payment for service or make more money over the course of a year and account for nonpayments, but I feel like I’d have to charge 30%-40% more over the course of the year on monthly payments to feel comfortable taking the risk.
I think you’re way underestimating the monthly fee. Figure an upper midsized house cost with a house wash and exterior window cleaning, siding treatment if vinyl or painted, driveway, mid season pollen rinse, and/or window cleaning, a 6 month driveway post treatment only. All that could easily add up to $1000. Divide by 12 and add 10-20% for monthly. Heck all my neighbors pay $75 - $100 each treatment for 7 yard sprayings per year.
I got a call to go bid cleaning a brand new long term care facility today and pitched the monthly regular cleaning plans. This place would need us there 2 days per month. If all goes well with this and another one I’m looking at around $8k in contractual for 6 days of work each month.
I think I’ve sold myself on that route over residential maintenance plans.
Yes, this is a huge part of our business. We sell yearly packages that mostly follow the below:
Gutter Cleaning 4x
House Wash 2 x
Interior and Exterior Window Cleaning 2x
Dryer Vent Cleaning 1x
Flat Work 1x
Customer is charged a monthly fee and services are pre scheduled on a recurring/year-year basis. It brings in regular income all year, and we know in advance what work we have scheduled for much of the year. We still offer one off services as well.
Honestly, I don’t know what the guys were missing in the previous posts. You know your regular pricing for all the services you offer, so you total that up for the work the client is signing up for and divide by 12. It’s a win-win for you and the clients. As for payments, put it as a recurring invoice with a card on file. Easy money.
Indeed. Except some very rare exceptions 4x/ year seems excessive to me. Maybe where you are things are different, here 2x/year is the most i do. Maybe you live in pine needle country…
2x/year housewash? Here if a customer has it done two years in a row it’s exceptional.
@mikehallyall : For the dryer vent cleaning, may i ask what equipment you use and if you ever need to go inside or can you do everything from outside?
Correct. Folks are doing this work anyway, so it is beneficial for them to bundle it and have it on a set it and forget it schedule. People appreciate the simplicity.
As for the gutters, we’ve discussed in previous threads: our part of North Carolina is dominated by pine trees. They drop needles all year long. Each property is different, but I have some that we service monthly and each visit they are packed, other we service once a year… and everything in between. Pine trees literally grow money if you’re a gutter cleaner.
You’re in Canada, completely different area. I’m sure a lot of people in your area own a snow blower (or something to take care of all the snow you get), whereas in my city we’ve had 2-3 years in my life where I’ve needed to shovel snow. Owning a snow plow/snow blower would be a waste of money.
So it’s similar with the services we offer. We have a ton of pine trees that drop debris all year, so a lot of properties require more regular gutter cleaning. It’s also warmer and very humid, so molid/mildew/algae/etc accumulate much quicker. And, we have a VERY heavy pollen season in the spring where everything is covered in a blanket of yellow for a few weeks. For our 2x/year house washes we wash once in the spring after pollen and once before the holidays to wash off any accumulated dirt, mold/mlildew, and spider webs.
For dryer vent cleaning, we use something like this Amazon.com. We do the full service from the outside, just need the client to turn on the dryer for the duration of the cleaning.
As someone who also owns a recurring revenue business, I imagine a large amount of time being spent on chasing people around for new credit card numbers, declined payments and sob stories after the work is already done.
