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Chapter 6 Recurring Revenue When I met Peter from Thrive Lawn Care in Illinois, the air still carried the chill of early March.
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The grass hadn't yet begun to grow, and neither had his revenue.
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On paper, his business had done $200,000 in the past year.
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Two trucks, four employees, plus an admin.
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Something wasn't adding up.
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Peter met me in his driveway, his eyes heavy with the kind of exhaustion you can't sleep off.
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His wife was pregnant, weeks from having their third child.
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He had not received a paycheck for almost a month.
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$17,000 in business loans, $9,000 more in credit card debt, racking up interest like a ticking time bomb.
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He had less than $500 in the bank.
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He was holding everything together with duct tape and faith.
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I noticed some common issues.
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High marketing spend with no return, employees not respecting him, unclear pricing, and a website that needed improvement.
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But as I dug deeper, I realized these weren't the roots.
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They were the weeds.
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The real rot was hiding underground.
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Three months of every year, December, January, and February, his business flatlined.
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Revenue dropped by 90 to 95%.
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He let go of his crew.
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He had no winter services, no side work, no strategy to survive the off-season.
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For a quarter of the year, Thrive Lawn Care became a liability, not only for Peter, but for his family.
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This wasn't a financial problem.
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This was an emotional one.
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Peter's face showed it all.
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The pressure to provide.
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The guilt of not being present.
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The fear that his dream was costing his family their peace.
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I sat with Peter and his wife inside their modest home, the nursery already prepped for the new baby.
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There was tension, unspoken but loud.
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His wife needed him home.
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The kids needed their father.
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But his business was pulling him the other way.
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It needed time, attention, and money he didn't have.
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And yet, he was spending $3,000 a month on a Google Ads agency that couldn't even give him a cost-per-lead report.
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There was no report showing metrics of clicks or conversions.
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Last year, he spent $20,000 on marketing.
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He generated $200,000 in revenue in his fourth year in business.
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The math didn't add up.
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He had too many employees for his revenue numbers.
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Either his team was inefficient or his prices were too low.
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Most likely, both.
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Even if he cut waste, fired poor employees, raised prices, and improved his website, all steps we took during the turnaround, the main issue would still be there.
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Seasonitis.
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Q4 collapse.
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Off-season.
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Starvation.
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Home service businesses are not designed to survive winter, and Peter's was no exception.
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His trucks sat idle.
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He laid off all his employees.
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His income vanished with the first frost.
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He entered lockdown mode.
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Every winter, he dug himself into a deeper hole.
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By March, he was starting over.
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He was racing uphill with a heavy load of debt on his back.
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The spring rush didn't feel like an opportunity.
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It felt like survival.
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That's why we focused on recurring revenue.
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We needed to reshape the business model.
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The goal was simple.
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Lock in mowing customers through spring and summer, then sell them on winter services.
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Debris pickup, gutter checks, light trimming.
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Visits every two weeks at the same rate as mowing.
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Give them value.
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Keep the crews working.
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Keep the cash flowing.
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If we could convert 70 to 80% of his mowing customers into a recurring winter services program, we could break the cycle.
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We'd no longer start each spring in the red.
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He could pay himself year-round, be home more, sleep better, smile again.
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That's what curing seasonitis is all about.
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The pain of the offseason doesn't show up in the P&L.
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It shows up in the eyes of a tired father.
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It shows up in the long silence between a husband and a wife who feel alone.
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It shows up in the way the kids learn to stop asking when daddy will be home because the answer never changes.
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This is why I'm so passionate about curing seasonitis.
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Because it isn't a business problem.
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It's a life problem.
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It's broken marriages, missed birthdays, mental collapses, financial stress that turns into emotional wounds.
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Peter's story is not unique.
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It is a quiet epidemic in home services, and the cure starts with recurring revenue.
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Cure4 to seasonitis is adding recurring maintenance and recurring revenue during the off-season.
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Adding recurring revenue is helpful for cash flow, but it also adds to your net worth.
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The value of the business goes up when you add recurring revenue.
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There are two ways to value your business.
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Book value equals assets minus liabilities.
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This means you take your trucks, equipment, and cash and subtract your loans and debts.
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Enterprise value is what the market would actually pay to buy your business.
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We call the difference between enterprise value and book value the market premium.
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Your goal is to increase this gap.
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How do you increase enterprise value?
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Several methods work.
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Increasing total revenue generally boosts valuations and multiples.
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Creating growth opportunities helps.
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Building a brand or developing intellectual property adds value.
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Streamlining operations, cutting costs, and optimizing prices all contribute.
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Making revenue and profit dependable, not erratic, but consistent, increases enterprise value.
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Today, we will focus on recurring maintenance.
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It helps increase enterprise value in many ways.
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It streamlines operations, optimizes price flexibility, and makes revenue predictable.
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Total revenue has a significant impact on enterprise value.
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A business earning $500,000 will have a lower multiple than one with $10 million, even if the profits are the same.
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But not all types of revenue affect valuation in the same way.
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There are three categories of service revenue.
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One-time revenue comes from projects such as paver patios, fence installations, bathroom remodels, and smart home setups.
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On page 17 of your workbook, list your main one-time services.
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Reoccurring revenue comes from services that occur at irregular intervals without a set schedule.
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Think emergency repairs, snow removal, septic tank servicing, or irrigation fixes.
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These happen more than once, though not at regular intervals.
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Recurring revenue arrives at consistent intervals.
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It can be weekly, monthly, quarterly, or annual payments.
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Examples include mowing, bush trimming, janitorial services, window cleaning, and pet grooming.
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Cash collection differs across these categories.
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One-time jobs typically offer large upfront payments.
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Reoccurring revenue brings moderate advance payments.
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Recurring revenue usually provides the least upfront cash, but enterprise value works in reverse.
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Recurring revenue has the highest enterprise value.
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In contrast, one-time jobs get the lowest valuation multiple.
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Why care about enterprise value?
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Building a business as an asset is a smart way to build wealth.
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Unlike income, it isn't taxed the same way.
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The government can tax W-2 job income at over 30%.
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But when you build enterprise value, you create wealth that isn't taxed until you sell.
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Consider Apple.
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iPhone sales have not grown since 2016.
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Still, the enterprise value and stock price keep rising.
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Even with flat iPhone sales since 2016, Apple's stock price has increased by over 10 times in the past 10 years.
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Why?
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Their revenue growth comes from services and recurring subscriptions.
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this segment of their revenue grew from almost nothing to a large part of their business.
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Looking at Apple's quarterly revenue, iPhone sales remain relatively stable, but services show significant, consistent growth.
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Services now make more money than Macs, wearables like the Apple Watch and AirPods, and iPads together.
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These steady revenue sources are Apple CarPlay licensing, iCloud storage, App Store purchases, Apple TV+, Apple Pay, Apple Care.
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Apple's product revenue shows big seasonal changes.
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Q4 holiday sales lead to huge spikes.
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Apple has seasonitis in its product business.
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But its services revenue shows steady, consistent growth.
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Stable revenue equals increased enterprise value.
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Apple's stock price and value have increased tenfold.
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This rise happened even though sales of its main products have stabilized.
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Recurring revenue commands a higher enterprise value.
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Microsoft offers another example.
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In 2013, you could only buy Microsoft Office as a one-time download.
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When Satya Nadella became CEO in February 2014, he focused on cloud services and subscription revenue.
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Today, you can still buy Office for a one-time price of $149, but it is difficult to find.
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Microsoft promotes its $699 monthly subscription instead.
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This seems counterintuitive.
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Why accept $7 a month when you could collect $149 up front?
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One-time jobs help businesses grow faster because of immediate revenue.
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But Microsoft's enterprise value has increased 20-fold in the decade since this change.
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Their stock stagnated for years.
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They earned less money as they changed from one-time to recurring revenue.
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But the long-term value proved transformative.
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Use this knowledge to your advantage.
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Downsell big one-time jobs into reoccurring services.
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If someone can't pay for a $30,000 roof replacement, suggest regular repair visits for leaks instead.
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This reoccurring service is cheaper than the one-time job.
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you could downsell further by offering a cheaper roof checkup.
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This recurring maintenance would prevent leaks before they cause damage.
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These monthly or quarterly inspections can help keep their roof in good shape.
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On page 17 of the workbook, list your one-time services and potential downsells.
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How can you turn customers who can't pay a lot up front into clients that generate recurring revenue?
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The goal is clear.
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Attract customers at the lowest cost.
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Then, focus on increasing their lifetime value.
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The cures to seasonitis revolve around getting more revenue from your existing customers.
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We've covered cure 2, upselling, selling better versions.
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We have covered cure 3, cross-selling, selling adjacent services.
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Now we're discussing recurring maintenance, selling more often.
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All these cures revolve around increasing the lifetime value of the customer.
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Why focus on recurring revenue?
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It's less volatile than depending on big jobs, deposits, and final payments.
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I've seen businesses fail because one or two large projects didn't pay on time.
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Recurring revenue also proves to be more resilient during recessions.
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During the 2007-2009 financial crisis, new vehicle sales dropped by 42%.
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Meanwhile, the aftermarket sector, repairs and maintenance, experienced only a 1% decline.
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During tough times, people delay buying new cars, but they still take care of their existing vehicles.
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This requires reoccurring repairs and recurring maintenance.
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Break pads need to be swapped.
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Oil changes need to be done.
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Another reason to focus on recurring revenue.
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Recurring revenue doesn't depend on having an exceptional salesperson present at all times.
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For one-time jobs, your top estimator needs to be available.
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They have the right skills and experience to close deals.
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This creates challenges in stepping away from the business or in selling it in the future.
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I want to build my business as if I will leave it someday.
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This way, tasks get done and revenue keeps coming in even when I'm not there.
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I'll use lawn care to explain cure 4.
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With some creativity, you can sell recurring maintenance in any home service industry.
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For roofing, think about getting quarterly tune-ups or cleanings.
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You can also sign up for priority service memberships after windstorms or during hurricane season.
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Solar panel cleaning and roof maintenance can become recurring services.
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Pressure washing companies can provide recurring services, offer gutter cleanouts, roof inspections, window cleaning, and caulking services all year.
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This way you can stay busy during slower months.
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Pool installers can offer heater, filter, and pump inspections during the winter.
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They also handle water damage, refill services, and chemical treatments.
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Plumbers provide various services, including drain cleaning, pipe insulation, water heater flushes, filtration system replacements, backflow testing, sump pump tune-ups.
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All these services work on a recurring basis, even during traditional off-seasons.
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If you can't find off-season services, change your thinking.
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We're not just selling a service or time.
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We're offering insurance, asset protection, and peace of mind.
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Homeowners with million-dollar homes pay around $5,000 a year for insurance.
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They rarely use it.
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Most people do not file a claim, yet they pay for protection without hesitation.
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The cost of prevention through recurring maintenance is far cheaper than emergency repairs.
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I like to use this analogy.
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Is it cheaper to hire a personal trainer or wait for open-heart surgery?
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Paying $100 a week for a trainer costs $5,000 a year.
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That's much less than the cost of surgery and the weeks of recovery and therapy needed afterwards.
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The same principle applies to home maintenance.
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Customers gain peace of mind from the regular inspection and care of their property.
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In doing so, they save money.
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This mindset birthed our Winter Services program at Augusta Lawn Care.
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We explain it in six simple steps.
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One, we keep your property looking good through the winter and the holidays.
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Two, we visit every two weeks until the mowing season returns.
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Three, you pay the same price as your regular mowing service.
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Four, we spend the same amount of time on your property as we would for a mowing service.
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Five, we complete as many checklist items as we can in that timeframe.
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Then we pick up where we left off next.
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And six, here are the services on the checklist.
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Pick up branches and yard debris.
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Blow leaves off walkways and driveway.
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Inspect gutter downspouts to ensure flow.
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Trim bushes or trees touching house to prevent algae or rodents.
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Pull weeds in beds, cracks of driveway and sidewalk.
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Edge beds and walkways.
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Inspect property.
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If we find damage or issues, we will take pictures and send a report.
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What about occasional snowfall?
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We add shovel snow to our service checklist.
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If we receive more than two inches of snow, we schedule the next winter service visit sooner to clear away without delay.
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We pull the next scheduled visit forward.
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In snowy areas with per-push pricing, we advertise when people get big bills.
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Tired of surprise $400 to $500 snow removal bills?
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Try our level year-round subscription.
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In places with little snow and monthly flat fees, we say, are you tired of paying for nothing when it doesn't snow?
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Our winter services program delivers value regardless of the weather.
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In warmer areas, if you need to mow during winter, we say mow the lawn if needed at the top of our checklist.
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Some Augusta locations in warmer climates still provide winter service every two weeks.
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But customers can choose to opt out.
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If they opt out, they will still receive monthly mowing service.
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Customers can select either biweekly winter services or a monthly mowing option.
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This isn't a money grab.
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Customers actually save money.
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It's a downsell from expensive fall or spring cleanups.
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For snow removal, it's a downsell from premium on-call emergency service.
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We're converting reoccurring jobs into predictable recurring services.
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There are four ways to convert existing customers to winter services.
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First, send an opt-out email or text.
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It could say, we have a budget-friendly way to keep your property looking good year-round.
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If you want to opt out, click here.
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This approach usually retains 20 to 30% of customers.
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A better way is to send standardized price comparison videos.
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These videos explain how winter services saves money.
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They do this better than separate fall and spring cleanups.
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You can send this offer to all customers with an opt-out option.
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If they decline, send a personalized video.
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Show their property and highlight potential savings.
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Let's watch how Connor from Augusta Nation handles this.
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After a customer opted out, he made a custom video.
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It showed the customer's property using Google Street View.
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Connor explained the winter services program and the cost savings.
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In the video, Connor addresses the customer directly.
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Hey Jason, this is Connor here with Augusta Lawn Care Services.
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I have your home pulled up here.
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I saw you opted out of winter services, so I wanted to make this video using your home as the example.
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He says that winter services trade costly one-time cleanups for regular bi-weekly property care.
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His team clears branches, removes debris, and keeps walkways and flower beds tidy.
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They also make sure gutters flow well.
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Connor highlights details about Jason's property.
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He may lack shrubs in the front, but there are some over by the patio.
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He points out the value by saying Jason spent $400 to $600 on spring cleanups before.
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He adds that winter services will cost the same as his regular biweekly mowing fee.
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Connor makes his pitch more personal by pointing out the big oak tree in Jason's yard.
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He notes how the leaves from the neighborhood can become Jason's issue.
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He offers a gentle reminder that no action is needed if Jason isn't interested.
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The third conversion method for winter services goes beyond individual opt-out responses.
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It sends personalized videos to every customer right from the start.
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Custom videos for each property boost conversion rates much more than general messages.
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For the best success, try the fourth approach.
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Show price comparisons in person.
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Though knocking on customers' doors requires significant effort, the results speak for themselves.
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Each step up this personalization ladder brings better results.
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In-person talks can convert 80% to 90% of customers.
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In contrast, standard emails with opt-out links only convert 20% to 30%.
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On page 19 of the workbook, create your own price comparison sheet for these conversations.
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With creativity, every one-time job or reoccurring project can transform into some form of recurring service.
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Practice your pitch as though you're speaking to an existing customer.
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Highlight the savings from your downsell.
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It helps them save money over time.
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The approaches that demand the greatest effort deliver the highest conversion rates.
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It is not easy to knock on every customer's door and explain when to services.
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Doing so takes more effort, but yields the highest conversion rate.
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Almost every home service can turn one-time jobs into steady income.
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You can do this with warranties, guarantees, or annual inspections.
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So even if you think your service doesn't fit maintenance work, consider these options.
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For sprinkler systems, include monthly inspections with free repairs.
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Or pager patios offer maintenance packages with annual sealing that include lifetime warranties.
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Pool installation may include warranties if you keep up with biweekly cleaning and chemical services.
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If I visit a property often, like every week or two, systems are less likely to get damaged or break.
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A roof can come with a leak-free lifetime warranty if the customer agrees to yearly cleanings and inspections every six months.
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Explain this value.
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Customers will see how regular maintenance leads to long-term protection and cost savings.
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You can install plants with a lifetime warranty.
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The customer must agree to irrigation, bush spraying, and bi-weekly flower bed maintenance.
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I'm transforming what would have been a one-time plant installation into recurring revenue.
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This works for almost every service.
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Installing a deck?
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I'll guarantee it for life if the customer buys annual cleaning, staining, and inspection.
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Retaining wall?
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I'll provide monthly visits for erosion control, bed maintenance, and drainage checks.
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These recurring services target the main reasons retaining walls fail.
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Plus, I can guarantee to rebuild the wall if it collapses.
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This adds value and increases close ratios.
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You can make home washing services reoccurring by scheduling your next visit while the service is happening.
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For deeper customer relationships, offer discounts for quarterly or annual commitments.
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Sell recurring work.
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After finishing a one-time project, consider pitching a recurring service.
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You can discuss this during the property walkthrough with the customer.
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This moment, when customers love their new patio, pool, fence, or deck, is the peak of activation.
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You solve their problem, and they are delighted with the results.
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What service could you offer to turn this one-time sale into an ongoing relationship?
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See how top brands like Eddie Bauer, The North Face, Columbia, and Patagonia offer lifetime warranties on their products.
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They've built entire business models around this approach.
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These premium brands promise, we'll fix it if it rips, if the zipper breaks, if a button pops off.
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This lifetime warranty enhances brand value.
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Check out the price difference.
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Amazon's knockoff jacket costs eight times less than the North Face.
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Yet, customers pay the premium with satisfaction.
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They leave five-star reviews on a regular basis.
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Why?
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Because a lifetime guarantee increases the perceived value.
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On page 20 of your workbook, consider what warranty or guarantee could double the value of your service.
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What assurance could command much higher prices?
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Remember, if you're selling a lifetime warranty, most homeowners move every 7 to 11 years.
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That 30-year roof warranty?
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Many customers will move before it expires.
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Younger homeowners will also relocate as their family grows.
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What if you named your company after the recurring service you've created?
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If Augusta Lawn Care were Augusta Winter Services, then the off-season would be your prime time.
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You'd have a mowing season for eight months.
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Then you would switch to winter services.
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In October, you would ramp up.
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You would hire employees, run ads, and expand operations.
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This is the exact moment when your competition cannot afford these investments.
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They have nothing to sell during winter, so they're not advertising.
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They're laying off employees and selling trucks to reduce fixed expenses.
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That's your moment to accelerate and dominate your local market.
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Read the recipe for market domination on page 21 of your workbook.
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Advertise when your competitors have nothing to sell.
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While they're hibernating, you're growing, buying trucks and hiring people.
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Here's a tactical tip for justifying price discounts on recurring maintenance.
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When customers wonder why winter services are cheaper than one-time cleanups, say, we want to keep our crew busy all year.
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This helps us avoid layoffs during the holidays.
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Customers appreciate this reasoning.
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When selling this program, highlight three main benefits.
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One, price savings.
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Two, year-round property standards.
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Three, insurance value.
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Regular property inspections give snowbirds peace of mind when they're away for months.
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This goes beyond the physical service.
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Focus your marketing on these benefits.
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Keeping rodents out of an empty house is more valuable than pulling weeds.
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Drive online ads to instant pricing forms for winter services, as you would for mowing.
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Here are some advertising headlines to grab their attention.
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Stop wasting money.
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Keep your property looking good year-round.
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Why pay more?
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Subscribe and enjoy great savings every month.
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Switch to a subscription and watch your costs drop.
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Enjoy consistent savings with our monthly plan.
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It's smarter and cheaper.
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Save big.
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No more unexpected repair bills.
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You're wasting hundreds of dollars every winter on lawn care and landscaping.
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Usually you pay $7.99 for a fall cleanup and $700 for a spring cleanup, about $1,500 total.
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But with winter services from Augusta Lawn Care, you save big.
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We visit every two weeks for property inspection, gutter checks, snow removal, debris cleanup, bush trimming.
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Your property looks great not just twice yearly, but year round.
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We don't want rodents and insects invading at Christmas.
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We'll pull weeds from beds.
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If grass grows during warm spells, we'll mow it too.
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You might be curious about the cost.
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It's exactly the same as your regular mowing service.
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The same price every two weeks.
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Now you get extra services while your property looks fantastic for the holidays.
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For a quote specific to your property, click the button below or call us today.
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Now I want you to practice pitching the service to someone.
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Use the price comparison template from your workbook.
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Picture this.
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They are not a current customer.
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They have no idea about your main service or ongoing offerings.
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Focus on price savings, insurance value, and peace of mind.
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Selling to new customers can boost your growth in the off-season.
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Practice until you can provide a detailed explanation of how they're saving money and improving their property.
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Here's a real case study from Connor and Aaliyah Stead in Evansville, Indiana.
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They shared it in the Augusta Nation Facebook group.
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We sent 186 emails and only 28 opted out, north of 80% conversion.
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I'm sending a personal video to those who declined.
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It explains our winter services and why they're the best deal.
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Connor followed up later.
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I wanted to share a cool win.
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I had a client add me on Facebook this morning after I sent him a personalized video when he initially declined winter services.
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We converted about six out of 29 people who originally said no through these personalized videos.
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Even if they declined, no one else is doing what we do, and clients always remember the video we made for them.
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Loom's screen recordings have been a great addition to our toolkit for conversions.
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Dustin from Bloomington, Illinois, shares another success.
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In 2023, our Q4 monthly revenue hit $24,654.
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In 2024, it jumped to $42,539.
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We attribute this to our winter service approach.
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This helped dramatically fill our capacity, increasing our profit from $1,168 to $12,153, more than 10 times the profit in one month.
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The key insight is this.
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Advertising this ongoing service to your current customers costs nothing.
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Tell the hundreds of contacts in your database about this option.
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You are a text or email away from a 50% to 80% increase in recurring revenue during your off-season.
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If this chapter gave you a great idea to put in place, I have one favor to ask.
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Help me get this message out.
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I want this to become the norm in our industry.
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This is how we beat unlicensed and uninsured competitors.
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Being better.
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Serving our customers more.
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A rising tide floats all boats.
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Please leave a review of this book on Amazon.
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00:28:52.167 --> 00:28:55.228
please leave a review of this book on Audible.
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00:28:55.548 --> 00:28:59.069
Go to the top right-hand corner, click the three dots, and leave a review.
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00:28:59.770 --> 00:29:04.872
In the review, mention the actionable advice you got from Cure 4, this chapter on recurring revenue.
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Mention that in the review.
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Thank you in advance.
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00:29:08.013 --> 00:29:08.633
I appreciate it.
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Chapter 6 Recurring Revenue When I met Peter from Thrive Lawn Care in Illinois, the air still carried the chill of early March.
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The grass hadn't yet begun to grow, and neither had his revenue.
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On paper, his business had done $200,000 in the past year.
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Two trucks, four employees, plus an admin.
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Something wasn't adding up.
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Peter met me in his driveway, his eyes heavy with the kind of exhaustion you can't sleep off.
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His wife was pregnant, weeks from having their third child.
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He had not received a paycheck for almost a month.
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$17,000 in business loans, $9,000 more in credit card debt, racking up interest like a ticking time bomb.
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He had less than $500 in the bank.
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He was holding everything together with duct tape and faith.
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I noticed some common issues.
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High marketing spend with no return, employees not respecting him, unclear pricing, and a website that needed improvement.
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But as I dug deeper, I realized these weren't the roots.
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They were the weeds.
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The real rot was hiding underground.
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Three months of every year, December, January, and February, his business flatlined.
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Revenue dropped by 90 to 95%.
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He let go of his crew.
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He had no winter services, no side work, no strategy to survive the off-season.
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For a quarter of the year, Thrive Lawn Care became a liability, not only for Peter, but for his family.
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This wasn't a financial problem.
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This was an emotional one.
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Peter's face showed it all.
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The pressure to provide.
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The guilt of not being present.
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The fear that his dream was costing his family their peace.
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I sat with Peter and his wife inside their modest home, the nursery already prepped for the new baby.
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There was tension, unspoken but loud.
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His wife needed him home.
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The kids needed their father.
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But his business was pulling him the other way.
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It needed time, attention, and money he didn't have.
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And yet, he was spending $3,000 a month on a Google Ads agency that couldn't even give him a cost-per-lead report.
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There was no report showing metrics of clicks or conversions.
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Last year, he spent $20,000 on marketing.
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He generated $200,000 in revenue in his fourth year in business.
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The math didn't add up.
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He had too many employees for his revenue numbers.
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Either his team was inefficient or his prices were too low.
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Most likely, both.
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Even if he cut waste, fired poor employees, raised prices, and improved his website, all steps we took during the turnaround, the main issue would still be there.
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Seasonitis.
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Q4 collapse.
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Off-season.
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Starvation.
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Home service businesses are not designed to survive winter, and Peter's was no exception.
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His trucks sat idle.
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He laid off all his employees.
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His income vanished with the first frost.
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He entered lockdown mode.
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Every winter, he dug himself into a deeper hole.
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By March, he was starting over.
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He was racing uphill with a heavy load of debt on his back.
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The spring rush didn't feel like an opportunity.
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It felt like survival.
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That's why we focused on recurring revenue.
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We needed to reshape the business model.
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The goal was simple.
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Lock in mowing customers through spring and summer, then sell them on winter services.
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Debris pickup, gutter checks, light trimming.
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Visits every two weeks at the same rate as mowing.
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Give them value.
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Keep the crews working.
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Keep the cash flowing.
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If we could convert 70 to 80% of his mowing customers into a recurring winter services program, we could break the cycle.
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We'd no longer start each spring in the red.
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He could pay himself year-round, be home more, sleep better, smile again.
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That's what curing seasonitis is all about.
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The pain of the offseason doesn't show up in the P&L.
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It shows up in the eyes of a tired father.
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It shows up in the long silence between a husband and a wife who feel alone.
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It shows up in the way the kids learn to stop asking when daddy will be home because the answer never changes.
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This is why I'm so passionate about curing seasonitis.
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Because it isn't a business problem.
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It's a life problem.
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It's broken marriages, missed birthdays, mental collapses, financial stress that turns into emotional wounds.
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Peter's story is not unique.
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It is a quiet epidemic in home services, and the cure starts with recurring revenue.
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Cure4 to seasonitis is adding recurring maintenance and recurring revenue during the off-season.
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Adding recurring revenue is helpful for cash flow, but it also adds to your net worth.
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The value of the business goes up when you add recurring revenue.
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There are two ways to value your business.
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Book value equals assets minus liabilities.
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This means you take your trucks, equipment, and cash and subtract your loans and debts.
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Enterprise value is what the market would actually pay to buy your business.
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We call the difference between enterprise value and book value the market premium.
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Your goal is to increase this gap.
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How do you increase enterprise value?
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Several methods work.
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Increasing total revenue generally boosts valuations and multiples.
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Creating growth opportunities helps.
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Building a brand or developing intellectual property adds value.
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Streamlining operations, cutting costs, and optimizing prices all contribute.
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Making revenue and profit dependable, not erratic, but consistent, increases enterprise value.
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Today, we will focus on recurring maintenance.
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It helps increase enterprise value in many ways.
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It streamlines operations, optimizes price flexibility, and makes revenue predictable.
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Total revenue has a significant impact on enterprise value.
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A business earning $500,000 will have a lower multiple than one with $10 million, even if the profits are the same.
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But not all types of revenue affect valuation in the same way.
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There are three categories of service revenue.
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One-time revenue comes from projects such as paver patios, fence installations, bathroom remodels, and smart home setups.
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On page 17 of your workbook, list your main one-time services.
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Reoccurring revenue comes from services that occur at irregular intervals without a set schedule.
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Think emergency repairs, snow removal, septic tank servicing, or irrigation fixes.
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These happen more than once, though not at regular intervals.
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Recurring revenue arrives at consistent intervals.
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It can be weekly, monthly, quarterly, or annual payments.
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Examples include mowing, bush trimming, janitorial services, window cleaning, and pet grooming.
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Cash collection differs across these categories.
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One-time jobs typically offer large upfront payments.
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Reoccurring revenue brings moderate advance payments.
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Recurring revenue usually provides the least upfront cash, but enterprise value works in reverse.
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Recurring revenue has the highest enterprise value.
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In contrast, one-time jobs get the lowest valuation multiple.
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Why care about enterprise value?
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Building a business as an asset is a smart way to build wealth.
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Unlike income, it isn't taxed the same way.
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The government can tax W-2 job income at over 30%.
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But when you build enterprise value, you create wealth that isn't taxed until you sell.
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Consider Apple.
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iPhone sales have not grown since 2016.
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Still, the enterprise value and stock price keep rising.
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Even with flat iPhone sales since 2016, Apple's stock price has increased by over 10 times in the past 10 years.
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Why?
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Their revenue growth comes from services and recurring subscriptions.
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this segment of their revenue grew from almost nothing to a large part of their business.
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Looking at Apple's quarterly revenue, iPhone sales remain relatively stable, but services show significant, consistent growth.
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Services now make more money than Macs, wearables like the Apple Watch and AirPods, and iPads together.
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These steady revenue sources are Apple CarPlay licensing, iCloud storage, App Store purchases, Apple TV+, Apple Pay, Apple Care.
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Apple's product revenue shows big seasonal changes.
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Q4 holiday sales lead to huge spikes.
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Apple has seasonitis in its product business.
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But its services revenue shows steady, consistent growth.
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Stable revenue equals increased enterprise value.
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Apple's stock price and value have increased tenfold.
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This rise happened even though sales of its main products have stabilized.
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Recurring revenue commands a higher enterprise value.
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Microsoft offers another example.
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In 2013, you could only buy Microsoft Office as a one-time download.
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When Satya Nadella became CEO in February 2014, he focused on cloud services and subscription revenue.
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Today, you can still buy Office for a one-time price of $149, but it is difficult to find.
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Microsoft promotes its $699 monthly subscription instead.
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This seems counterintuitive.
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Why accept $7 a month when you could collect $149 up front?
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One-time jobs help businesses grow faster because of immediate revenue.
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But Microsoft's enterprise value has increased 20-fold in the decade since this change.
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Their stock stagnated for years.
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They earned less money as they changed from one-time to recurring revenue.
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But the long-term value proved transformative.
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Use this knowledge to your advantage.
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Downsell big one-time jobs into reoccurring services.
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If someone can't pay for a $30,000 roof replacement, suggest regular repair visits for leaks instead.
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This reoccurring service is cheaper than the one-time job.
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you could downsell further by offering a cheaper roof checkup.
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This recurring maintenance would prevent leaks before they cause damage.
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These monthly or quarterly inspections can help keep their roof in good shape.
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On page 17 of the workbook, list your one-time services and potential downsells.
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How can you turn customers who can't pay a lot up front into clients that generate recurring revenue?
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The goal is clear.
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Attract customers at the lowest cost.
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Then, focus on increasing their lifetime value.
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The cures to seasonitis revolve around getting more revenue from your existing customers.
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We've covered cure 2, upselling, selling better versions.
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We have covered cure 3, cross-selling, selling adjacent services.
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Now we're discussing recurring maintenance, selling more often.
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All these cures revolve around increasing the lifetime value of the customer.
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Why focus on recurring revenue?
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It's less volatile than depending on big jobs, deposits, and final payments.
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I've seen businesses fail because one or two large projects didn't pay on time.
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Recurring revenue also proves to be more resilient during recessions.
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During the 2007-2009 financial crisis, new vehicle sales dropped by 42%.
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Meanwhile, the aftermarket sector, repairs and maintenance, experienced only a 1% decline.
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During tough times, people delay buying new cars, but they still take care of their existing vehicles.
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This requires reoccurring repairs and recurring maintenance.
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Break pads need to be swapped.
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Oil changes need to be done.
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Another reason to focus on recurring revenue.
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Recurring revenue doesn't depend on having an exceptional salesperson present at all times.
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For one-time jobs, your top estimator needs to be available.
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They have the right skills and experience to close deals.
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This creates challenges in stepping away from the business or in selling it in the future.
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I want to build my business as if I will leave it someday.
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This way, tasks get done and revenue keeps coming in even when I'm not there.
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I'll use lawn care to explain cure 4.
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With some creativity, you can sell recurring maintenance in any home service industry.
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For roofing, think about getting quarterly tune-ups or cleanings.
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You can also sign up for priority service memberships after windstorms or during hurricane season.
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Solar panel cleaning and roof maintenance can become recurring services.
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Pressure washing companies can provide recurring services, offer gutter cleanouts, roof inspections, window cleaning, and caulking services all year.
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This way you can stay busy during slower months.
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Pool installers can offer heater, filter, and pump inspections during the winter.
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They also handle water damage, refill services, and chemical treatments.
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Plumbers provide various services, including drain cleaning, pipe insulation, water heater flushes, filtration system replacements, backflow testing, sump pump tune-ups.
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All these services work on a recurring basis, even during traditional off-seasons.
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If you can't find off-season services, change your thinking.
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We're not just selling a service or time.
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We're offering insurance, asset protection, and peace of mind.
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Homeowners with million-dollar homes pay around $5,000 a year for insurance.
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They rarely use it.
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Most people do not file a claim, yet they pay for protection without hesitation.
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The cost of prevention through recurring maintenance is far cheaper than emergency repairs.
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I like to use this analogy.
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Is it cheaper to hire a personal trainer or wait for open-heart surgery?
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Paying $100 a week for a trainer costs $5,000 a year.
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That's much less than the cost of surgery and the weeks of recovery and therapy needed afterwards.
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The same principle applies to home maintenance.
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Customers gain peace of mind from the regular inspection and care of their property.
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In doing so, they save money.
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This mindset birthed our Winter Services program at Augusta Lawn Care.
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We explain it in six simple steps.
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One, we keep your property looking good through the winter and the holidays.
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Two, we visit every two weeks until the mowing season returns.
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Three, you pay the same price as your regular mowing service.
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Four, we spend the same amount of time on your property as we would for a mowing service.
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Five, we complete as many checklist items as we can in that timeframe.
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Then we pick up where we left off next.
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And six, here are the services on the checklist.
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Pick up branches and yard debris.
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Blow leaves off walkways and driveway.
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Inspect gutter downspouts to ensure flow.
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Trim bushes or trees touching house to prevent algae or rodents.
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Pull weeds in beds, cracks of driveway and sidewalk.
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Edge beds and walkways.
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Inspect property.
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If we find damage or issues, we will take pictures and send a report.
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What about occasional snowfall?
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We add shovel snow to our service checklist.
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If we receive more than two inches of snow, we schedule the next winter service visit sooner to clear away without delay.
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We pull the next scheduled visit forward.
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In snowy areas with per-push pricing, we advertise when people get big bills.
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Tired of surprise $400 to $500 snow removal bills?
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Try our level year-round subscription.
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In places with little snow and monthly flat fees, we say, are you tired of paying for nothing when it doesn't snow?
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Our winter services program delivers value regardless of the weather.
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In warmer areas, if you need to mow during winter, we say mow the lawn if needed at the top of our checklist.
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Some Augusta locations in warmer climates still provide winter service every two weeks.
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But customers can choose to opt out.
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If they opt out, they will still receive monthly mowing service.
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Customers can select either biweekly winter services or a monthly mowing option.
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This isn't a money grab.
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Customers actually save money.
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It's a downsell from expensive fall or spring cleanups.
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For snow removal, it's a downsell from premium on-call emergency service.
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We're converting reoccurring jobs into predictable recurring services.
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There are four ways to convert existing customers to winter services.
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First, send an opt-out email or text.
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It could say, we have a budget-friendly way to keep your property looking good year-round.
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If you want to opt out, click here.
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This approach usually retains 20 to 30% of customers.
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A better way is to send standardized price comparison videos.
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These videos explain how winter services saves money.
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They do this better than separate fall and spring cleanups.
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You can send this offer to all customers with an opt-out option.
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If they decline, send a personalized video.
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Show their property and highlight potential savings.
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Let's watch how Connor from Augusta Nation handles this.
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After a customer opted out, he made a custom video.
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It showed the customer's property using Google Street View.
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Connor explained the winter services program and the cost savings.
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In the video, Connor addresses the customer directly.
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Hey Jason, this is Connor here with Augusta Lawn Care Services.
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I have your home pulled up here.
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I saw you opted out of winter services, so I wanted to make this video using your home as the example.
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He says that winter services trade costly one-time cleanups for regular bi-weekly property care.
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His team clears branches, removes debris, and keeps walkways and flower beds tidy.
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They also make sure gutters flow well.
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Connor highlights details about Jason's property.
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He may lack shrubs in the front, but there are some over by the patio.
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He points out the value by saying Jason spent $400 to $600 on spring cleanups before.
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He adds that winter services will cost the same as his regular biweekly mowing fee.
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Connor makes his pitch more personal by pointing out the big oak tree in Jason's yard.
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He notes how the leaves from the neighborhood can become Jason's issue.
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He offers a gentle reminder that no action is needed if Jason isn't interested.
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The third conversion method for winter services goes beyond individual opt-out responses.
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It sends personalized videos to every customer right from the start.
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Custom videos for each property boost conversion rates much more than general messages.
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For the best success, try the fourth approach.
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Show price comparisons in person.
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Though knocking on customers' doors requires significant effort, the results speak for themselves.
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Each step up this personalization ladder brings better results.
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In-person talks can convert 80% to 90% of customers.
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In contrast, standard emails with opt-out links only convert 20% to 30%.
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On page 19 of the workbook, create your own price comparison sheet for these conversations.
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With creativity, every one-time job or reoccurring project can transform into some form of recurring service.
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Practice your pitch as though you're speaking to an existing customer.
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Highlight the savings from your downsell.
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It helps them save money over time.
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The approaches that demand the greatest effort deliver the highest conversion rates.
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It is not easy to knock on every customer's door and explain when to services.
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Doing so takes more effort, but yields the highest conversion rate.
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Almost every home service can turn one-time jobs into steady income.
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You can do this with warranties, guarantees, or annual inspections.
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So even if you think your service doesn't fit maintenance work, consider these options.
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For sprinkler systems, include monthly inspections with free repairs.
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Or pager patios offer maintenance packages with annual sealing that include lifetime warranties.
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Pool installation may include warranties if you keep up with biweekly cleaning and chemical services.
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If I visit a property often, like every week or two, systems are less likely to get damaged or break.
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A roof can come with a leak-free lifetime warranty if the customer agrees to yearly cleanings and inspections every six months.
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Explain this value.
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Customers will see how regular maintenance leads to long-term protection and cost savings.
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You can install plants with a lifetime warranty.
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The customer must agree to irrigation, bush spraying, and bi-weekly flower bed maintenance.
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I'm transforming what would have been a one-time plant installation into recurring revenue.
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This works for almost every service.
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Installing a deck?
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I'll guarantee it for life if the customer buys annual cleaning, staining, and inspection.
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Retaining wall?
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I'll provide monthly visits for erosion control, bed maintenance, and drainage checks.
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These recurring services target the main reasons retaining walls fail.
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Plus, I can guarantee to rebuild the wall if it collapses.
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This adds value and increases close ratios.
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You can make home washing services reoccurring by scheduling your next visit while the service is happening.
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For deeper customer relationships, offer discounts for quarterly or annual commitments.
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Sell recurring work.
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After finishing a one-time project, consider pitching a recurring service.
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You can discuss this during the property walkthrough with the customer.
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This moment, when customers love their new patio, pool, fence, or deck, is the peak of activation.
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You solve their problem, and they are delighted with the results.
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What service could you offer to turn this one-time sale into an ongoing relationship?
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See how top brands like Eddie Bauer, The North Face, Columbia, and Patagonia offer lifetime warranties on their products.
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They've built entire business models around this approach.
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These premium brands promise, we'll fix it if it rips, if the zipper breaks, if a button pops off.
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This lifetime warranty enhances brand value.
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Check out the price difference.
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Amazon's knockoff jacket costs eight times less than the North Face.
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Yet, customers pay the premium with satisfaction.
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They leave five-star reviews on a regular basis.
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Why?
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Because a lifetime guarantee increases the perceived value.
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On page 20 of your workbook, consider what warranty or guarantee could double the value of your service.
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What assurance could command much higher prices?
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Remember, if you're selling a lifetime warranty, most homeowners move every 7 to 11 years.
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That 30-year roof warranty?
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Many customers will move before it expires.
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Younger homeowners will also relocate as their family grows.
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What if you named your company after the recurring service you've created?
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If Augusta Lawn Care were Augusta Winter Services, then the off-season would be your prime time.
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You'd have a mowing season for eight months.
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Then you would switch to winter services.
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In October, you would ramp up.
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You would hire employees, run ads, and expand operations.
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This is the exact moment when your competition cannot afford these investments.
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They have nothing to sell during winter, so they're not advertising.
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They're laying off employees and selling trucks to reduce fixed expenses.
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That's your moment to accelerate and dominate your local market.
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Read the recipe for market domination on page 21 of your workbook.
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Advertise when your competitors have nothing to sell.
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While they're hibernating, you're growing, buying trucks and hiring people.
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Here's a tactical tip for justifying price discounts on recurring maintenance.
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When customers wonder why winter services are cheaper than one-time cleanups, say, we want to keep our crew busy all year.
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This helps us avoid layoffs during the holidays.
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Customers appreciate this reasoning.
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When selling this program, highlight three main benefits.
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One, price savings.
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Two, year-round property standards.
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Three, insurance value.
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Regular property inspections give snowbirds peace of mind when they're away for months.
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This goes beyond the physical service.
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Focus your marketing on these benefits.
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Keeping rodents out of an empty house is more valuable than pulling weeds.
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Drive online ads to instant pricing forms for winter services, as you would for mowing.
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Here are some advertising headlines to grab their attention.
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Stop wasting money.
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Keep your property looking good year-round.
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Why pay more?
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Subscribe and enjoy great savings every month.
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Switch to a subscription and watch your costs drop.
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Enjoy consistent savings with our monthly plan.
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It's smarter and cheaper.
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Save big.
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No more unexpected repair bills.
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You're wasting hundreds of dollars every winter on lawn care and landscaping.
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Usually you pay $7.99 for a fall cleanup and $700 for a spring cleanup, about $1,500 total.
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But with winter services from Augusta Lawn Care, you save big.
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We visit every two weeks for property inspection, gutter checks, snow removal, debris cleanup, bush trimming.
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Your property looks great not just twice yearly, but year round.
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We don't want rodents and insects invading at Christmas.
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We'll pull weeds from beds.
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If grass grows during warm spells, we'll mow it too.
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You might be curious about the cost.
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It's exactly the same as your regular mowing service.
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The same price every two weeks.
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Now you get extra services while your property looks fantastic for the holidays.
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For a quote specific to your property, click the button below or call us today.
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Now I want you to practice pitching the service to someone.
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Use the price comparison template from your workbook.
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Picture this.
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They are not a current customer.
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They have no idea about your main service or ongoing offerings.
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Focus on price savings, insurance value, and peace of mind.
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Selling to new customers can boost your growth in the off-season.
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Practice until you can provide a detailed explanation of how they're saving money and improving their property.
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Here's a real case study from Connor and Aaliyah Stead in Evansville, Indiana.
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They shared it in the Augusta Nation Facebook group.
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We sent 186 emails and only 28 opted out, north of 80% conversion.
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I'm sending a personal video to those who declined.
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It explains our winter services and why they're the best deal.
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Connor followed up later.
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I wanted to share a cool win.
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I had a client add me on Facebook this morning after I sent him a personalized video when he initially declined winter services.
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We converted about six out of 29 people who originally said no through these personalized videos.
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Even if they declined, no one else is doing what we do, and clients always remember the video we made for them.
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Loom's screen recordings have been a great addition to our toolkit for conversions.
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Dustin from Bloomington, Illinois, shares another success.
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In 2023, our Q4 monthly revenue hit $24,654.
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In 2024, it jumped to $42,539.
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We attribute this to our winter service approach.
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This helped dramatically fill our capacity, increasing our profit from $1,168 to $12,153, more than 10 times the profit in one month.
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The key insight is this.
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Advertising this ongoing service to your current customers costs nothing.
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Tell the hundreds of contacts in your database about this option.
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You are a text or email away from a 50% to 80% increase in recurring revenue during your off-season.
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If this chapter gave you a great idea to put in place, I have one favor to ask.
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Help me get this message out.
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I want this to become the norm in our industry.
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This is how we beat unlicensed and uninsured competitors.
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Being better.
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Serving our customers more.
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A rising tide floats all boats.
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Please leave a review of this book on Amazon.
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00:28:52.167 --> 00:28:55.228
please leave a review of this book on Audible.
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Go to the top right-hand corner, click the three dots, and leave a review.
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In the review, mention the actionable advice you got from Cure 4, this chapter on recurring revenue.
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Mention that in the review.
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Thank you in advance.
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I appreciate it.
