What Are Recurring Revenue Streams, The Different Types Of Recurring Revenue Streams, The Benefits Of Having Recurring Revenue Streams, And The Challenges Of Building Up Recurring Revenue Streams That Entrepreneurs Can Encounter
Dr. Harrison Sachs
Sep 2022 · The Epic Books Of Dr. Harrison Sachs
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36
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About this ebook
This essay sheds light on what are recurring revenue streams, demystifies the different types of recurring revenue streams, reveals the benefits of having recurring revenue streams, and delineates the challenges of building up recurring revenue streams that entrepreneurs can encounter. Recurring revenue streams are revenue streams that are expected to be able to generate revenue on an ongoing basis. The revenue generated from a recurring revenue stream is far more predictable than the revenue generated from a non-recurring revenue stream. A recurring revenue stream has the latent potential to provide revenue on an ongoing basis. It is preferable if a revenue stream has the latent potential to provide revenue in perpetuity and has an unlimited earning potential that is not tethered to your time. A company’s recurring revenue streams that generate substantial recurring revenue are able to do so as long as the target market is willing to pay recurring fees on an ongoing basis. Recurring revenue streams are for instance generated by companies that provide subscription services. In exchange for access to its subscription services, the company’s subscribers for instance pay a subscription fee on a periodical basis, such as a monthly basis, which thereby provides the company with recurring revenue. The more subscription services a company offers, the more recurring revenue streams that they can bring to fruition. Recurring revenue streams provide companies with revenue from ongoing payments on a periodical basis, such as a monthly basis. Subscribers are amenable to paying ongoing payments on a periodical basis, such as a monthly basis, to be able to avail themselves of continuous access to a service. Lamentably, even though revenue generate from a recurring revenue streams is not guaranteed, it is far more predictable than the revenue generated from a non-recurring revenue stream, especially since customers who provide companies with recurring revenue are content with making ongoing payments to have access to a service. Companies are also able to generate recurring revenue by providing access to products as a service which can provide their subscribers with access to products as long as they continue to pay a recurring subscription fee to access them. Recurring revenue streams can also be generated from investment securities. A company does not need to provide services nor access to products as a service to generate recurring revenue since it can own investment securities that can provide them with recurring revenue, such as equities that have high dividend yields. Providing people with access to assets can also generate recurring revenue for the owners of the assets. Car dealerships for instance can lease out cars and trucks to customers in order to generate recurring revenue. Boat dealers can lease out boats to customers in order to generate recurring revenue. Aircraft dealers can lease out aircraft to clients in order to generate recurring revenue. Real estate firms can rent out rental real estate properties to tenants in order to generate recurring revenue. Parcel deliver companies can rent out mail boxes to clients in order to generate recurring revenue. Storage companies can rent out rental storage units to tenants in order to generate recurring revenue. Manufactured home park companies can lease out land to tenants in order to generate recurring revenue. Investors understand the eminent importance of generate recurring revenue. Investors generate recurring revenue from investment securities. Stocks that have high dividend yields provide investors with recurring dividend payments. Corporate bonds provide investors with recurring coupon payments for a prolonged period of time. Passively managed index mutual funds provide investors with recurring distribution payments. Passively managed exchange traded funds provide investors with recurring distribution payments. Passively managed exchange traded funds provide investors with recurring distribution payments. Rental real estate properties provide real estate investors with recurring rental payments. Even though it is possible for an investment securities that provide recurring revenue and real estate properties that provide recurring revenue to no longer do so, they are inapt to cease providing recurring revenue. Companies that offer high dividend yields for their stocks are inapt to discontinue offering dividends payments to their shareholders. Companies that offer AAA Corporate bonds that provide investors with recurring coupon payments for a prolonged period of time are inapt to default on their debt obligations to their bond holders.
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