You can now buy a subscription for everything from dog treats to razor blades. Music subscription services are booming as our appetite to buy tracks is replaced by our willingness to rent access to them. Starbucks now even offers coffee on subscription. Why are so many companies leveraging the subscription business model? The obvious reason is that recurring revenue boosts your company’s value, but there are some hidden benefits to augmenting your business with a […]
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The Downside of Selling Someone Else’s Product
Are you tempted to re-sell someone else’s product to boost your topline revenue? On the surface, becoming a distributor for a popular product can appear to be a simple way to grow your sales—simply find something that is already proven to be successful elsewhere and negotiate the rights to sell it in your local market. While distributing someone else’s product may be a relatively easy way to grow your topline, all that revenue growth may […]
Will this be the year you seriously drive up the value of your company?
If you have resolved to make your company more valuable in 2017, you may want to think hard about how your customers pay. If you have a transaction business model where customers pay once for what they buy, expect your company’s value to be a single-digit multiple of your Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA). If you have a recurring revenue model, by contrast, where customers subscribe and pay on an ongoing basis, […]