Look for Opportunities with Residual Income Potential

Captain Kirk has been a source of pleasure and income for a long time. - William Shatner

If at all possible look for a business that has residual income or try to add a component of residual income to your existing business. By residual I mean that people have a reason to keep paying you money, such as a magazine subscription. At the very least find a business with a large group of easy-to-target repeat customers.

It takes just as much time, effort, and money to attract a customer who buys once as it does to attract a customer who keeps buying. Therefore it makes far more sense to get involved in a business where the customer keeps buying on a regular basis.

The number of golf courses that operate as daily-fee (pay as you play) operations rather than operate on a membership basis amazes me. Even those that offer both often favor the daily-fee player since he pays a higher green fee. But, and it’s a BIG but, the daily-fee player has to show up 20, 30, or maybe even 40 times before he spends the same amount as a yearly member. If it rains he may not show up. If his buddies are playing another course, he may not show up. If the course down the street offers a deal, he may not show up at yours. It makes far more sense to lock that player into your club with a membership, an annual pass, or a frequent-player card.

When I started in the golf marketing business, I built and sold websites for a fixed fee. This was okay to get started but a bad idea in the long run. Eventually I changed it from a fixed fee to a small setup and a monthly service fee of $295. This gave me less money up front but quickly built my residual income and actually increased my sales since clients no longer had to come up with $5,000 or $6,000 up front. Over time I added services, so the residual went from $295 to $495, to $795, to $1595, and eventually $3,000 a month for larger clients.

You don’t have to be a math genius to figure out how much more profitable and predictable this business model is over the one-time sale model. If you sell water conditioning, add a monthly service fee. If you sell air conditioning, add a yearly check-up fee. If you sell estate-planning advice, add a yearly update fee. Even if you sell pizza, sell a card for ten or twenty meals so you are guaranteed more than one night’s income immediately.

Whatever type of business you have works better with some kind of residual income component. Without residual or repeat business, life is hard.

For more great sales, marketing and business growth advice read or listen to


Please note: I reserve the right to delete comments that are offensive or off-topic.

Leave a Reply

Your email address will not be published. Required fields are marked *