How to Create a Sustainable Revenue Model

Not all revenue is created equal. Many founders fall into the trap of thinking ALL revenue is GOOD revenue. That's just not true. Here’s a simple trifecta framework to spot truly valuable revenue: Profitable: Aim for 40-60% gross margins. Revenue that barely covers costs isn't sustainable. Scalable: Revenue should come from ONE main product or use case. Operations must be automated, freeing your team to grow, not manage manual tasks. Sticky: Clients stick around not because you're the cheapest, but because you provide unmatched value—whether it’s additional products or exceptional service. Remember, low prices alone NEVER create stickiness. Early on, you won’t have all three. Start with scalability: Nail down one product, automate relentlessly, and spend your energy acquiring customers. Next, sacrifice some short-term profits for market share—lower prices strategically to attract users. After gaining traction, enhance stickiness to defend your customer base. Once you have meaningful scale and strong retention, you can confidently raise prices and boost your margins. Revenue quality matters more than revenue quantity. #FounderInsights #StartupStrategy #GrowthMindset

Tired of the rollercoaster of income highs and lows? Let’s fix that. Here’s the truth: Feast-or-famine cycles aren’t just stressful—they’re unsustainable. If you’re relying solely on one-off projects or sporadic sales, you’re playing defense. The key to stability? Recurring revenue. 👉 Retainer services that keep clients coming back. 👉 Memberships that create a community and steady cash flow. 👉 Subscription-based products that deliver value month after month. These aren’t just income streams—they’re the foundation for growth. Businesses with recurring revenue models grow 5-7x faster than those without (source: McKinsey). With predictable income, you can focus less on hustling for the next deal and more on scaling what works. Actionable Advice: 👉 Brainstorm ONE way to add recurring revenue to your business. • Could you offer a monthly coaching package? • Create a subscription product? • Build a retainer model for your services? • Write down your idea and outline your first steps today. Ready to create consistent, predictable income? Download the Strategic Offer Builder and design offers that stabilize your cash flow and set you up for success. ➡️ https://lnkd.in/ewYNzEtq Predictable income isn’t a dream—it’s a decision. Let’s make it happen.

If you’re a recurring revenue company and you haven’t significantly shifted away from the strategies & tactics you used in 2020 or before, you may end up wasting a lot of time and money AND not achieve your goals. I believe this is especially true for companies that range from $5M to $250M in ARR. I can’t say it enough - the way companies were measured in the 2010s is no longer the same. During those years, a high acquisition growth rate meant a high valuation, and a high valuation equalled success. So companies did anything to get those acquisition Growth Rates high. Unfortunately that often resulted in a very high cost of acquisition, which wasn’t balanced on the back end with a focus on keeping & growing those accounts. Many closed deals outside of their ICP, and they churned before your costs were covered. Growth Rate looked great, but as soon as you dug into the unit economics things were far from healthy. You can't go back to those strategies. So what to do instead? You don’t need to guess! We KNOW what leadership teams need to do to understand what is working and not working and use that information to get the ship steered in the right direction.  And you can do it yourself or get help if you need it. The answer is Revenue Architecture.  Revenue Architecture is a scientific approach using models, data, first principles and known patterns to analyze your business, see what’s working, and see what you need to change to achieve sustainability and profitability.  If you apply Revenue Architecture properly, you will have an analysis that provides root causes and that helps you build a roadmap that leads directly to your goals. Now, you DO need to do the analysis properly. You can't rely on gut feel, or the replication of approaches you used to use. BUT, the time spent to run a proper analysis using Revenue Architecture is worth it to avoid wasting time and money on the wrong things. And you can do this work yourself. Take the Revenue Architecture course and the Bowtie Analytics course to learn how to do this analysis, and/or read the Revenue Architecture book.  Understand where your company is on the Growth Curve, what gaps exist in your foundation, and what unit economics need to be addressed. Find root causes of your challenges and prioritize the steps to move forward. If you don’t have time to learn how to do this work yourself, get Winning by Design to do a Diagnostic that will give you the status of your company’s health as a system & prioritized recommendations about how to get it on track. Use that project as a way to learn how to apply Revenue Architecture yourself so that you can do the analysis in the future - ideally at least once a year.  Don’t waste any more time. Use Revenue Architecture to get you and your company on the right path forward for 2024!  https://lnkd.in/gb3SE-M2 #revenuearchitecture