Customer Login

The Freelancer’s Guide To Recurring Revenue

Key Takeaways

  • Recurring revenue is predictable revenue.
  • You should package what you already know and sell it.
  • Selling to peers is a viable strategy when you can distil down years of accumulated experience into a methodical system.
  • You can generate high-quality clients by selling low-risk products.
  • Find the middle ground between turnkey products and one-off consulting.

It’s pretty much inevitable that after the realization that “Oh my God, I’m making a ton of money” freelancing, just about every consultant I’ve met soon realizes, “But that money disappears when I stop working.”

This post is going to dive into how you, an idea-less freelance consultant, can build products of your own and develop recurring revenue streams that don’t necessarily require an ongoing commitment of your time.

Why Recurring Revenue?

Recurring revenue is much more than just “money that will come to me as I sip Mai Tais on Waikiki Beach.” Recurring revenue is (more or less) predictable revenue. The catch with consulting is that the majority of us bill for our time, and if no time is logged — either because we’re on vacation or simply just don’t have a project to work on — there’s nothing to bill for. But we still have monthly obligations. We still need to pay for our shelter, our food, and other amenities required to live comfortably.

I can’t speak for you, but if I’m on the hook for paying banks, creditors, or utility companies upwards of $10,000 for the foreseeable future, being uncertain about where I’m going to get that $10,000 is a huge weight to shoulder. Our salaried brethren understand what it feels like to be worried about getting fired and losing their paycheck; but many of us freelancers constantly face that fear, and that’s a fate that can occur despite how successful we are at the work we produce for our clients.

What attracted me to pursuing recurring revenue was that I could offset my fixed liabilities with something that I had a lot of control over. If one of my two current consulting clients bailed, my income might be cut in half by 50%. If one customer out of the thousands that have bought a book of mine ask for a refund, I might need to skip dessert tonight.

Products: An Emotional Hurdle To Overcome

I was in Las Vegas last week for MicroConf, an annual conference for bootstrapped entrepreneurs. And I noticed a trend… Everyone there was aiming to one day live entirely off of product income, but a significant majority was using consulting as a crutch to support them until they hit some critical mass of paying customers that they could cut the umbilical cord of consulting (keep in mind this is a bootstrappers conference — we don’t have the luxury of the massive amounts of cash infusion that can come through funding!)

The jump, however, between selling time for cash and selling a self-serve product to someone you’ve never met is pretty big.

The former just requires you finding a few people like you who can effectively “rent” you for a rate, either because they don’t have whatever skill they hired you for or they don’t have the time to do it themselves.

The latter can require figuring out a problem that people will pay YOU, an Internet stranger, to fix. This means marketing, writing persuasive sales copy, and building a product before anyone’s bought it (which can be a struggle for those of us conditioned to “work now, get paid soon-ish”,) and having the gumption to actually ask for the sale.

Marketing. Persuasion. Building a product. Fulfillment. These dragons are slain through research and elbow grease. But before any of this can happen, many freelancers-turned-product-people need to come up with an idea, which is where most of us stumble and give up.

The problem is the belief that ideas are special, and that “great ideas” will come given enough time (or enough showers, depending on when and where you get inspired.)

But what if you didn’t have to wait. What if you already had the great ideas you need to build up recurring revenue?

Sell What You Know

I want to talk about two different audiences you can sell to right now, and how you can go from trading your time for money to building up a product that literally sells itself while you sleep. As an added bonus, doing this can help you get more clients, which helps alleviate the “feast or famine” problem that affects a lot of freelancers.

To begin, you need to start with a little soul searching…

Why do clients pay you wads of cash? The answer isn’t necessarily “Because I write code” or “I’m good at setting up WordPress.” Most people will hire you because you’re capable of solving some sort of business problem that makes it worthwhile to cut you large checks with the assumption that you’ll deliver something worth more than the cost to hire you.

So if they’re hiring you to, say, get more walk-in customers to their retail shop by setting up some really solid stuff online, that’s at the far end of the execution spectrum (“Here’s my problem, you’re the tech guy, I’ll pay you to fix it.”) You’re consulting. You’re applying your knowledge to solve one person’s pain, which in this case is a lack of customers which is causing a bit of a problem with their cash flow.

Alternatively, the skills you possess that allow you to charge your clients to get them more walk-in customers might be desired by a more junior freelancer who also wants to become more valuable by offering this service to their clients.

How did you get to where you are today? What skills did you need to acquire before you were able to make yourself valuable enough to be hired? And before worrying that you aren’t necessarily an expert and getting the maximum amount of walk-in customers for the maximum amount of retail shops, you just need to realize that you only need to know more than the person you’re trying to teach.

The theme here is education. Consulting is just applied education, and there’s a lot of middle ground between where a client or fellow freelancer is today (“I need more walk-ins” / “I also want to help my clients get more walk-ins”) and having an expert consultant apply years of accrued wisdom to a specific problem, or becoming the go-to consultant for getting retail shops more clients.

Sell To Your Peers

Selling information to other freelancers like you can solicit two types of very vocal responses:

You’re selling tools to the miners. (The idea being that the only people who made money during the gold rush in the American West were the merchants hawking mining gear to upstart miners. The difference being that in this gold rush, the miners are actually making lots of money.)


All of this is available for free on the Internet [in existing blog posts, podcasts, forums, StackOverflow, etc.]

But for each of these minority voices there are dozens of silent doers who want what you have to teach so they can move on with their lives, becoming more valuable and charging more.

And these doers will buy the knowledge you’ve cataloged, organized, and presented for sale. Because when the doer isn’t doing, they’re not making any money. And if they’re billing $XXX an hour, spending $XX to level-up is a no brainer. They don’t have the time to hunt and peck around Google results to get to the same result that you’re offering with a shiny “Buy Now” button.

A great example of this in action is what Nathan Barry’s done with his two books, The App Design Handbook and Designing Web Applications. He’s produced two products — the former for iOS designers, the latter for designers of web apps — that can help the reader go from just a designer to being able to walk and talk like an experienced iOS or web app designer.

The best part of what Nathan’s done is that his products are sold and packaged as an easy to digest pill. Rather than wading through the good and bad of pages of Google results to figure out how to implement the perfect navigation UI, Nathan’s done that work for you and has it available for sale.

Let’s think like a CEO who hires designers for a second. Jim, an employee of yours, is a good web designer, but now he needs to design our company’s new iPhone app. Sure, he knows how to use Photoshop and splice and dice up PSD files… but Jim’s never designed an iOS app. We could think, “Jim — go and figure out the ins and outs of iOS design for a few weeks.” But Jim costs a few thousand dollars a week, and the idea of spending thousands so Jim can (hopefully) become a competent iOS designer sort of sucks. And you don’t want to hire that high price consultant and risk pissing off your in-house designer, right?

And then you discover that for $169, this guy named Nathan has a complete package of resources that help designers become awesome iOS designers. Businesses pay for things, especially when those things can reduce costs or amplify revenue.

Sell To Your Clients

Remember that spectrum, where at one end we have raw information (“The know-how to help a retail business get more walk-ins”) and at the other application (“The knowledge and the time spent to help one retail business get more walk-ins”)?

As freelancers, we’re used to being paid to apply knowledge for our clients. But we don’t always think about the value we could deliver on the lesser parts of the spectrum.

Think about it this way. To go back to our example, Mary the Business Owner wants more walk-in customers. There are actually quite a few ways to do this:

Learn and act. Mary could read a book or take a training course from someone like you who’s constructed a guide for setting up ads and a marketing site that helps convert visitors to walk-in customers. This requires Mary (or someone on staff) to take the time to do some learning and then actually execute on this new knowledge. The product Mary purchases is probably purely information: an ebook, a training course, videos, …

Get something turnkey. Mary could come across a SaaS vendor who promises a turnkey website and set of marketing campaigns that are specifically built for retail shops wanting more walk-in customers. This is significantly lower risk (and cost) for Mary, because the next option would be to hire a designer off the street and hope that he knows how to 1) build the site and the marketing campaigns and 2) know enough about retail shops and how they get walk-in customers. Chances are, most of the products you’ve wanted to build have fallen into this space. The product Mary purchases is probably a web-based, multi-tenant product that she pays for monthly.

From scratch. Mary needs her problem solved, and she lacks the technical capacity or time and energy to do it herself. So she finds someone like you, is persuaded that you have the skills to solve her problem, and then commissions you after a high-touch, possibly lengthy sales cycle. The product Mary purchases is a one-off consulting engagement with someone (an individual or agency) that she feels can help solve her problem.

An added benefit of educating your client is that you’ll increase your perceived expertise, which could end up netting you new clients who need to hire a consultant who helps retail businesses get more walk-in customers. After all, you literally wrote the book on it.

Patrick McKenzie is routinely hired by software companies to help improve their conversion rates through something called lifecycle emails. Now, Patrick lives in Japan, and just about all of his clients are located halfway around the globe from him. Hiring Patrick involves going through a proposal, possibly convincing partners or a board to hire this guy for $XX,XXX a week, accepting his proposal, negotiating contracts, getting Patrick to fly halfway around the world, getting him in your office for at least a week, and then sending him back.

All because you need Patrick to help you apply the email knowledge he has to your business.

This also limits Patrick to having just a handful of clients. He can do the grueling, cross-Pacific flight only so often, and being a newlywed tends to exponentially complicate things.

So while Patrick could just stop consulting, he could also do it at scale. He could distill his knowledge into a five hour video course, and allow people that couldn’t afford him or win a coveted spot in his consulting schedule to reap a lot of the benefits of having Patrick sit in your office for a week.

The Middle Ground Between Information and Application

Where Patrick hasn’t gone (and where, frankly, I think he and you could) is the middle ground between teaching and doing.

When Patrick is hired to write lifecycle emails for a software company, the hiring company is educated by Patrick, but he’s also going to write and put into place the application of that education (e.g., a 30 day email course.) But what happens when a company picks up his video course and takes a stab at implementing the advice contained within?

Who do you think they’re wanting to get feedback from?

Patrick. Or if it’s an ebook on getting more retail walk-in customers, from you.

And this gives you and Patrick the distinct advantage of being able to charge what might seem an exorbitant rate to spot-check or vet the end result of your customer attempting to take action on your information. And let’s face it — only one person really fits the bill to do this one-off consult… the creator of the content that gave them the skills!

Other middle grounds involve group training or workshops, monthly retainer agreements, coaching, and other services that you can price, rather than bill.

To round out the examples, Joanna Wiebe of Copyhackers offers a No-Fluff Website Review for close to $1,000. The review includes an assessment of your website’s copy and a 60 minute video review. Because Joanna’s established her foothold in teaching people who hate writing sales copy what it takes to write effective sales copy, her 1-on-1 review is a natural upsell to her books. She’d be hard pressed to sell this service of hers without the book, but again — once someone’s spent a few hours in Joanna’s head by reading her book, she’s going to be the only viable candidate that’s capable of conducting a website review.

So before you get dismayed by the amount of time and effort it takes to build a product, realize that products can be as simple as something that teaches just one thing. And instead of waiting for your Eureka moment, reflect on why people have hired you in the past. The road to selling products doesn’t need to be steep and jagged.

  • Thanks for writing Brennan! Reoccurring income is something barely any freelancers have.

    I believe that is one reason Nathan Barry has such a huge following – because he talks about his journey and basically teaches others how to build products and blog and teach others. The only problem is that probably only 1-2% of his followers are actually going to take action!

    The example about Joanna selling a website review is awesome – especially because I’m working on something like that for my clients.

    So here’s an idea I have that I’m wondering if people will pay for: Write an e-book and blog series about my journey starting my own web design company – my struggles, finding clients, bad projects, how much I make etc.

    • Caleb, if the product you’re proposing will help others avoid many of the same mistakes you made and essentially puts someone on the “fast track” to building a web design company, it will sell when marketed correctly.

      RE: Nathan, absolutely. Education is the BEST form of marketing (e.g., this free post showing up on my product blog.) Only a small subset of any group ever actually executes, which is why there are a lot of *want*repreneurs out there, but very few people who are actually starting sustainable businesses.

  • That is the sound of a gear clicking into place. Awesome post dude, time to me to start putting together some ideas around this. I’ve been thinking about this for a while and never arrived at this conclusion, no idea why. Anyway, this post fired a neuron somewhere – I have some serious datamining/scraping/analysis content to write/record now!

    • Awesome David! Anything in particular about the post fire off a neuron or two?

      • Yeah, the bit about knowledge and application. I always thought about offering what I do as a course or something at too high of a level (general web development). I realized that what a lot of people pay me for is actually my very domain specific knowledge about datamining/scraping the web. I guess I think of that stuff as “trade secrets” and wont get any work if I sell the knowledge. In hindsight that is a terrible way of thinking about it.

        Patrick’s video series was the clincher.. I know I can present well about what I do.. it makes perfect sense 🙂

  • This post landed in my inbox at exactly the right time. (I’m so glad I procrastinated on keyword research for watering holes and read this first!)

    As David said, a gear clicked into place. I felt stuck in the “all this information is available on the internet for free!” rut, and your clear-cut example about Jim trying to learn iOS design and how a $169 investment is cheaper (and less stressful) than wading around the internet trying to figure it out yourself. I’ve been Jim, and I’ve happily bought to kill that pain (cue light bulb).

    The added examples of Patrick McKenzie and Joanna Wiebe helped drive it home. This is great new fodder for brainstorming on my triumvirate — thank you!

    • Hey Danielle, so happy that I helped turn on that lightbulb! Yeah, a lot of us miss the simple fact that a surplus of information isn’t necessarily a benefit. Time is limited and time is valuable, ergo I want to get to an outcome as quickly as possible. If this means reclaiming hours of research for a concise, actionable guide… you bet I’m going to buy it!

      • Totally agree, Brennan. That’s how you made me buy your book (:

      • spudgun

        How can you tell in advance if the information you’re paying for is 1. correct and 2. relevant? If its neither of these you’ve just wasted your money as well as your time. Its so easy in these days of do-anything-to-sell marketting tactics to come across false advertising. I know it comes down to trust, but where does the trust start? If I am looking for info on iOS app templates, how do i tell (without a lot of time researching) if this person is someone I can trust or if I have accidentally stumbled across another online chancer?

        • Easy. Offer a 100%, No Questions Asked (literally) moneyback guarantee. Not all information is going to be entirely relevant to everyone who buys. My rule of thumb: If the reader gets nothing out of it, I don’t want their money.

          You’ll find most people are pretty ethical. I’ve had maybe 10ish refund requests for more than 3k+ sales.

          • Neil P

            I don’t think that really answers spudgun’s question. You’re saying anyone who offers you a 100% moneyback guarantee is going to provide you with relevant and accurate information? That moneyback guarantee is simply a false sense of security used to make the sale. Sure it’s No Questions asked, but it needs to be returned “unopened” , or in the same packaging, with a return authorization, or whatever…..Sellers know unless it’s a LOT of money and easy to do, most people are too lazy to bother to get their money back. So I don’t think THAT (moneyback) criteria necessarily equates to accurate information.

  • Jamie

    This is all good but I’m a programmer not a writer 🙁

    • jevy11

      If you’re a freelancer developer and not an employee you’re perspective is not optimal. You’re a business owner first, a programmer second. Writing a business involves some writing and networking.

  • Mustack

    “freelancers face constantly face that fear” just thought I’d let you know.

  • Great piece. Just yesterday I noticed the website Summer Tomatoes written by Darya Rose who charges people $12.99 if they want her to do extensive research on something and wondered why other bloggers aren’t doing this, prominent bloggers all have overflowing inboxes so why not just charge people who ask for your advice? Your example of Patrick having to travel across the world just to dispense “advice” could all be done over email for a price, a win-win for both sides I’d say.

  • Great post! I grabbed a bunch of quotes from this and put them in Evernote for my next brainstorming session today, good perspective to help encourage new ideas.

  • edem

    This post is just awesome!

    I was holding my head with both hands for the last half of it while I was reading. Just wow! I had about 3 AHA! moments within 15 minutes!

  • Dave

    So the way to get reoccuring revenue to start/increase consultant retainers or build info products? I feel like this post would serve better as a more detailed info product 🙂

    • I’ve thought about it — I think a lengthy guide full of specifics would do pretty well and provide a lot of value. Right now, I’m focused on Planscope… but might pull the trigger on this sometime this summer. Join my mailing list to be the first to know 🙂

  • Parnell Springmeyer

    Good article, but “my income might be cut in half by 50%” is really bugging me for some reason – I know being a grammar nazi is generally rude but I can’t stop thinking about it.

    (what you’re talking about, VC’s like to call a “lifestyle” biz with a twinge of contempt)

    Some bootstrappers are famous for never thinking bigger than their lifestyle – that’s one thing I would point out as a warning. Building a funded company subjects you to business thinking that’s unusual for bootstrappers unless they have a mentor, become funded later, or actually have their sights set on the moon – I know because it sit by and watch great companies that are profitable with full-time employees just sit in their cozy little corner and chug along at 100-200k in revenue per month.

    • That’s fine that some VCs have contempt toward businesses that aren’t aiming to be high-growth. (I know a few VCs who don’t feel that way.)

      My goal is to have enough money to hang out with my kids and wife whenever I want and not be beholden to anyone but my customers, and if that means having a “lifestyle” company — so be it. I sort of like, uh, “life” 🙂

      Business is a means to an end. I don’t think on my deathbed I’ll be thinking, “Damn it, I wish I would have sunk years of my life into working my ass off for a startup” vs. “Wasn’t it awesome that I was able to work at home, on my own schedule, and was able to spend a ton of time with my kids?”

      • Roy Willemse

        I completely agree with this. I have a beautiful wife and two amazing children who deserve all the attention I can give them. While I manage to pull in 100K a year with 3 days of “cerebral prostitution” a week as a web developer, I try to direct 2 days of every week at my Big Hairy Audacious Goal. It’s easy to make more money, but I don’t want to be in that rat-race.

        I’m pushing myself to take the hard road of developing one of my most haunting ideas to fruition. I have no idea when I start to make money of it, but I am definitely not planning to make a career out of freelancing. I would be so disappointed with myself.

        In those 2 days, I am using all my talent, experience and know-how to build something that I believe in. Even if that means eventually just having enough recurring income so I can release myself from the burden of billable time, and having more time for my family and other passions such as writing, and maybe teaching.

  • Nicolò Paternoster

    This is a summary of the content of Tim’s “the four hour work week” .Next time a friend ask me an advise, I will send him to his link instead of making him read 300+ pages. 😉

  • Great stuff Brennan! Now I know what to do with some content that I’ve been working on and holding for a while.

  • Daisy

    I had the same gear-clicking moment as David below: I was thinking of my knowledge on too high a level, getting stuck on the scope of what I know and how to portray that, instead of focusing on the specific things I do that make other people’s lives easier/save them time, and just distilling that into ground-level stuff. Thank you for such an awesome article!

  • benallfree

    Brennan, just stumbled across your site from a Canadian client who reminded me that you existed. I had heard the name a few years back, so your brand is definitely circulating among micro-startups. And thanks for turning me on to MicroConf too. I’m a programmer who has found his way into the niche of helping micro-startups build their MVPs and I coined the term “micro-startup” myself, not knowing there was an entire culture out there for it. Glad to have found some other people working in the same vein.

  • monroe45234

    There are lot of people are now work as freelancer and earn lot revenue for the country. So i think this important for us to about Reevenue and take the legal way to earn.

- Enter Your Location -
- or -