I got this question on X yesterday:
Everyone thinks they want recurring revenue.
It’s the holy grail, right?
Predictable cash flow. Reliability.
The feeling that you don’t have to always be “on” chasing the next sale.
But here’s what most people don’t think about:
Most recurring revenue businesses are small tickets: $100-200 per customer per month.
You need A LOT of customers to make significant money.
500 customers at $150/month = $75,000 monthly revenue.
Sounds great until you realize it could take years to build that customer base.
You’re also losing customers every month for various reasons.
All while spending lots of money to acquire them & deliver the service.
Meanwhile, project-based revenue is less frequent but has much larger tickets.
$5k, $10k, $20k per project.
You don’t need many of them to be profitable.
10 projects at $10k = $100,000 monthly revenue.
But every day you need to go out to earn it.
In auto repair, we have “on-demand” sales with an average ticket of $350. Some jobs are big ($1,500+), while others are small ($30).
We have re-occurring revenue when existing customers return for additional work.
All models work. It’s about understanding the tradeoffs.
Recurring revenue is a long-term game if you’ve got patience and capital.
Project-based revenue can be a quicker path to significant cash flow.
On-demand requires you to be ready to handle whatever comes at you.
One of my favorite parts of the Waterloo Turf business model is the combination of recurring revenue + projects.
We get low-ticket recurring revenue through turf cleaning and high-ticket cash flow through installation.
When I evaluate franchises, I don’t just look at “recurring vs. one-time” as better or worse.
I look at:
- Average ticket size
- Time to profitability
- Ease of operation
Plus, a lot more. I created a complete business model checklist that you can grab here.
Cheers!
Brian
