What is Recurring Revenue?
Unlike individual sales, recurring revenue offers predictable, consistent, and reliable revenue at specific, repeating intervals into the future that, while not necessarily guaranteed, come with a high degree of certainty.
Here are four examples of recurring revenue:
- A single or multi-year lease (frequently non-cancellable).
- A multi-unit purchase order that extends over a fixed term, like 12 months.
- Consumables you sell for your products that end-users buy at relatively frequent intervals. (Think paper or ink cartridges for your office printer.)
- A fixed-term, fixed dollar amount capital equipment service contract that you offer to keep your customer’s equipment working at a specified level and that they pay for even if the kit does not require service during the contract period.
The article first appeared on Thomas Insights on January 29, 2020. To read the complete article, click here.
Related article: How Recurring Revenue Can Be a Source of Financial Capital
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Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. Middlesex Consulting continues to provide superior solutions to meet the needs of its clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization create and increase recurring revenue, please get in touch with us or check out some of our free articles and white papers here.