Get Paid in Advance

In my previous article, I shared with you why I put so much energy into creating subscriptions for my businesses. Almost any business can create monthly recurring revenue (subscriptions, memberships, etc.) but for some reason, drycleaners have been late to the party.
 
One of the primary benefits to recurring revenue, is you are paid before you render the services. You receive Payment in Advance. When you charge a client’s credit card, they are paying for the month ahead. They are pre-paying for your services. It used to be that only “discount cleaners” required pre-payment.
 
A subscription can give you payment in advance without the stigma of your business starving for cash flow. This payment in advance happens all the time. Netflix, supplements, vitamins, magazines, fitness centers, country clubs, car wash memberships, pest control, mosquito services... they all get the benefit of cash flow. They charge the clients’ cards in advance of fulfilling the service.
 
This eliminates the need to constantly sell the service. You’ll be able to better plan your inventory levels, have cash flow to pay your team, and you won’t have to wait for your clients to pick up before you are paid. You’ll never have to run accounts and wait to be paid.
 
Why have drycleaners been so late to the party when it comes to subscriptions? I believe it is very difficult to create a subscription around a commodity. With a commodity, you can go down the street and get the same thing but maybe for a different price. Most drycleaners have not differentiated themselves and focused on specialization in their businesses. For this reason, they are seen as a commodity in the market. Why would someone lock themselves into the subscription of a commodity, when they can readily find it available from other sources? They would not.
 
To get Payment in Advance, you have to be different. Once you are different, your clients will be willing to lock in a subscription with you which changes everything. 
 
Most drycleaners work too much in the daily operations of their business. They do this because they feel they have to. They don’t have the cash flow to hire the right people to make the business self-operating. So, the owner plugs the holes and does it themselves. Creating recurring revenue and getting paid in advance allows you to hire the right team members so you can create the systems to make the business self-operating. That, my friend, changes everything!
 
Have a good week!
Dave