So, you’ve started your business and it’s going well. You have a few core clients who use your services on an as-need basis, and a steady stream of new clients coming in. Business is going, but it’s lacking something: a dependable MRR (monthly recurring revenue). Without this, it can be challenging to determine your marketing budget, create new offerings, or be able to plan ahead of time for expenses such as hiring new help or even investing in a new software.
It’s understandable that in the beginning stages of your business, it might be harder to nail down specific scalable processes to ensure that you have a dependable MRR. Much of the earlier stages of a business are about determining key offerings, iterating and reiterating, and getting into a groove with a growing monthly roster of clients. Because of this, you may think that scaling to a sustainable and impressive MRR is just something that takes a while. This isn’t always the case, however. Here are tricks to scaling to MRR sooner.
Reasons Why It’s Important To Establish MRR
The nature of an MRR is in its name: recurring, which is what makes this metric so important. MRR can be considered as the ‘baseline’ or the ‘ground floor’ of your business. It’s critical to know what this is in your business so that you can implement strategies to scale beyond that. And, yes, – it looks different, but this can be done in businesses beyond SaaS businesses, and should. It’s a way of planning ahead for your client roster, your work, and your strategies.
On that note, MRR is also how you determine whether or not your business is scalable. It ensures that there are processes in place that can be built on top of. For example, perhaps you have eight main clients you work with on a monthly basis, and you are at full capacity as a solopreneur serving all eight. If you know that you will have this baseline of eight clients, you can bring on extra help to boost up your capacity incrementally.
How To Start To Build MRR Consistently
Knowing your MRR can also help with marketing. Eric Balance, the founder of Business Nirvana, noted that one compelling way to scale your MRR is to first focus on your marketing strategy, launch it, then keep your foot on the gas.
“Businesses enter a ‘brake, accelerate, brake, accelerate’ pattern when they reach full capacity and stop marketing, then start again when they lose clients or contracts end,” Balance explained. “The way to circumvent this is to advertise consistently and slowly, and always have advertising campaigns operating in the background, so that new clients are always joining your community while you look after your current clients, and generate advocates. All of this scaling can happen over time at a rate you can control,” Balance explained.
Beyond paid ad campaigns, consider any form of audience nurturing. Social media is a great way to connect with ideal clients or even past clients to stay top-of-mind, especially if your main services are on a month-by-month basis and you have a monthly ‘entrance point’ to your programs or services.
Double Down On Retainer Offerings
One mistake businesses make at the beginning is to only offer one-off services. For example, imagine that you offer reflexology sessions, and clients can book one-off sessions with you at any time. This leaves money on the table via packages. If, instead, you offer three session or ten session packages, clients will be more likely to buy more.
If the nature of your work makes packages a hard sell right off the bat, consider at least offering bulk pricing. Some customers or clients know to ask for this, but most don’t. They either see it advertised on your site or from you directly, or think it’s not an option at all. The trick is to make it as easy as possible for them to continue booking with you on a month by month basis.
Get Creative With Subscriptions
This can also be done by offering subscription packages. Because MRR is mainly used as a metric for subscription-based businesses, it can be challenging to conduct a reliable number in another type of business unless there’s an element of subscription or recurring clients on a monthly basis. So, create one. Offer services across multiple months. To make this even more appealing, consider adding perks to your subscription packages, such as an exclusive newsletter or podcast, that will keep clients paying month-after-month even if they don’t need your immediate services or they’re used to paying one-off.
Certain platforms, such as Patreon, have made this easier than ever, especially for when you’re just starting out. You are able to make monthly membership packages that customers can buy into for any price that you choose. Because a dollar today is always worth more than a dollar tomorrow, subscription-based services are the way to go for staying on top of your business income.
MRR can be helpful in judging how your business is doing and what needs to change. Scaling is easier than we often think – and scaling MRR isn’t just for SaaS businesses.
Forbes – Entrepreneurs