Residual Income - What It Is and Why You Want it
As you surf the net, you will find a wide variety of business opportunities. Invariably, each one of these will claim to have the best compensation plan available and several will claim to offer "residual income". However, a cursory examination of many of these pay plans will advise you that, although there can be a very real earning opportunity, it cannot truly be called residual income.
Residual Income Opportunities
What exactly is recurring income anyway? Simply put, re-occurring income can be defined as any payment system in which you receive regular, ongoing payments because of a single sale. The regularity of the payments may vary - they could be weekly, monthly, quarterly etc. - but they are regular and ongoing without any further selling activity when the initial sale has been made.
generate residual income
Some potential recurring income opportunities are listed below:
Telephone calls and line rental
Mobile phone supply, line rental and calls.
Web hosting supply.
Autoresponder supply (monthly rental).
Any software that is supplied based on a rental basis.
These are just a few examples, there are plenty more. Any products or services which is provided on a lease or rental agreement can provide you with residual income. Ideally, your customer will automatically renew each week/month without any requirement for action (effort) by either your or perhaps your customer.
There may also be some scope for residual income with disposable or consumable products. In cases like this, the mechanics of the reorder process have a critical bearing upon your earning capabilities. For true re-occurring income, the reorder process should be automatic as described above. This isn't simply a matter of semantics or a pedantic definition. There are several reasons why you should target genuine re-occurring income.
Many people who set up their own small home business do so with the express intent of eventually replacing their salary. Because of the regular nature of the payments, residual income is ideal for this. In fact, it's far better than having a salary while you continue to get paid for work that has been done in the past.
With genuine recurring income, the automated reorder process signifies that you don't have to spend time servicing and supporting your overall customers. You can focus your energies on finding new clients and/or recruiting new distributors/affiliates, thereby continually growing your small business at the fastest possible rate.
In case your customer needs to take some action to reorder then, despite a consumable creation that needs to be replenished periodically, there is a "break point" in the process. The customer may decide to economise and do with no product that month, they might decide to use one of your (many) competitors or they might just simply forget to order.
With an automated reorder system on the other hand, your customer needs to make a positive effort to not reorder. It's a well known proven fact that customers who buy products and services by subscription are much more loyal and fewer likely to cancel. Even if they do decide to opt out they tend to delay this for over they would otherwise.
Consider it for a moment. Have you ever kept a subscription running for longer than you intended, or are you aware someone else who has? Perhaps you might even have some small but regular subscription running today that you've completely overlooked.
That, of course, means that many companies will give you a decrease in the standard rate if you set up a subscription agreement. Reader's digest know the value of this. Use telephone companies, electricity companies, internet providers and software providers around the world. Now you know about it too - take advantage if you possibly can.
Finally - and let's not kid ourselves here - lots of people don't like selling. Strategies round this and it's possible to minimise the discomfort some people feel - but it is still there at some level for most of us.
Picture the scene. You've just developed a sale, you feel great and you're simply already thinking about how you're going to spend you money. Then it hits you - you've got to do it all again this evening, tomorrow, next week. Takes the gloss off a little - right?
Now look at a slightly different scenario. You've just developed a sale. Your new customer has signed a repeat subscription agreement and you're going to benefit for months, otherwise years to come. Is that an improved home movie? I think it is.
There are other benefits of residual income but, for the sake of brevity, I hope that those already discussed above provide sufficient compulsion that you should actively seek out one or more residual income stream.