Business revenue? Unfortunately, still unpredictable.
Whether you like it or not, few things in life can be predicted. This is especially true with your business revenue. Though you can estimate earnings based on past data, market demand, and future sales, there is no guarantee that what you earn will come anywhere near your projections (it rarely does).
Walk into the Shark Tank and tell the investors you are projecting $10 million in revenue this coming year. If earnings estimates were so predictable, every Shark would jump right on the investment, duking it out with each other in the process. Instead, they drill the contestants on every single business figure until they can find something that gives them a glimmer of hope that the investment will pay off.
Go back into the Shark Tank and tell them you already have thousands of paying monthly subscribers. Now, the conversation goes a completely different way.WHY Is the Subscription Business Model so Lucrative?
The subscription business model is not a new concept. Nowadays, you can subscribe to anything from healthy food and designer shoes to beauty products and beard oil. Subscription services have also been a business model used by the service industry for decades. Think cable, internet, phone, and utilities.
But, subscription services have exploded in the last decade with businesses selling consumables at a faster rate. In Q1 2018 alone, 18.5 million Americans visited at least one subscription site.
The subscription model is attractive mainly because it funnels in revenue monthly, which can remove some of the burden you may carry with constantly finding new customers to buy your products and services.
Sure, even with a recurring revenue model, you will still need to find new subscribers. But every new subscriber has the potential to bring in long-term value—revenue that could continue month over month, year over year.
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