Risk & Business Magazine Lloyd Sadd Insurance Brokers Fall 2015 | Page 14

Revenue From Recurring Sources
The Benefits of a Subscription-Based Business
BY: NEIL WADHWA, RISK & BUSINESS MAGAZINE

J

ohn Warrillow, author
of The Automatic
Customer, is a guru in
building subscriptionbased businesses. Having
founded five different
companies, including
a subscription-based
qualitative research
firm that was sold to a
publicly traded company
on the New York
Times stock exchange
in 2008, he’s been immersed in the
subscription-based business world
for years—including with his current
company, The Value Builder System.
While there are certainly no stigmas
against subscription-based businesses,
there are misconceptions that
subscription-based models are only
successful for companies that operate
in specific industries (e.g. software).
Certainly there are industries where
subscription is not the current agreedto or standard model, but what

John contends is that every
business can form some sort
of subscription-based revenue,
even if it’s just 5% or 10% of the
overall revenue that’s coming
from these recurring sources.
“There are many auxiliary
benefits that subscription-based
revenue provides, namely that
it lets you plan your business
more effectively, as you know
how much product to buy in
the future, you know how many
customers you have in the future, you
can plan out your human resources and
raw materials better, and the model
also allows you to get steady cash flow,”
says John. “Bu H