 I was asked to do an encore, so like Russell Crowe and Gladiator, I was, I screwed that one up. I was asked to do an encore, so like Russell Crowe and Gladiator, I was asked, do you want more? Promise to keep it hot like a radiator, but I won't get hardcore, because that'll be a bore, and I want your profits to soar. So I'm going to show you some tricks on recurring revenue, but before I do, I thought I'd drop this rhyme for you. In my rhymes, they might not be complex, but I figured what the heck, and I don't understand I am a botanist, but that doesn't matter to her. She wants to know how to manage her cash flow so she can make her business grow so she can be sipping a 64 Bodo in a French Chateau. So if you're so inclined, let's design a price so nice I want to buy twice. All right, so we're talking strategies beyond profitably pricing recurring revenue here. And next slide. And next slide. Oh, and I got to turn this thing on. All right, because after this talk, you will not be this person at the end of the year. You will look at your financial statements, and you will not be like, where did my profit go? This is a bad year. This is what I want to prevent you from from happening to you. All right. So but a little bit about me first. So and this is where you get out your phones and start scrolling Instagram because you don't care for me to ramble on about how great I am. But what because what you really want to know is who the hell am I and why should you listen to me. And the answer to that is really, really simple because I'm on stage with the clicker. But next slide. No, no, is that you're getting old because I'm a couple times, but I just love it. Anyway, so I had an agency right years is still around and some some version of another, but my sister runs it but and then what I noticed though was a lot of my friends struggled with money. And I could help them with it because that was my background. So this this is how this all came about. So this is how I'm going to share this with you what I've done to help people over the last four or five years. So in two minutes though, I'm going to do something that you wouldn't think somebody that talks about money would do. I'm going to convince you not to take $100 because I'm ready to give $100 to everybody in this audience. So here you go. So who in here right now, if I would give $100 to would take it. So pretty much everybody would take $100 right now except Kathy Kathy's like I don't need $100. So, all right, now what if I said to you, I won't give you $100 now, but in February 5 of 2024 so a year from now, I will give you $105. Who would take $105 in a year versus $100 today? Any takers? Any takers? All right, we got a couple. We got a couple. What if I do this? What if I offer you $125 in a year from now? Guaranteed versus $100 today. Any takers? So we got a couple more, a couple more hands. Now what if I say I'll throw in two Benjamin's a Franklin and a Lincoln. So $225. Any takers on that? Pretty much everybody now is going to take that money in a year from now. So what did that prove? Oh, did I screw up that? Now we have another HDMI issue. All right. No, we don't. All right. So what are we doing here? Okay. So what did we prove? We proved that money has a time value. Okay. So what does that mean? That means like you would we, you would take, you would give up $100 now for more money in the future. So that so over time, you'll take more money. And that's the thing about recurring revenue. Recurring revenue is letting your clients pay you over time. So if you let your clients pay you over time, you should expect more money because we just proved that if you're selling something for $100 today, you would want more money in the future to put the delay getting paid on that. Okay. So what we want to do is charge extra for letting them keep our money for longer. And this is called a time premium because we're letting them have more time to pay us. Now I had a client and he would go to Vegas every six weeks. All right. And he was on a monthly billing. And then when you come home from Vegas, he was always canceling his credit card. Okay. So and then we'd have to chase him down because we needed a new new credit card number knew this and it was a hassle and it took time away from us being able to work on client business to chase him down for that money. You know, and then we had those clients that we invoice them. And you know, it seems like as soon as the invoice goes out, they disappear. We can't get a hold of them. They don't want to pay us. So and when they don't pay us what we could do, you know, we can always sue them. But, you know, Sue them costs a lot of money. You know, it's not cheap to sue them. And then we can win. We're definitely going to win. You know, if we have a contract and if you don't have a contract, Nathan has a monster contract that will be sure that you'll win in court. But you know, the thing about winning a lawsuit, that's not the hard part. The hard part after you have a lawsuit is actually collecting the money. Because if you ever want a lawsuit and then you have to actually get the person to pay you, it's a lot harder than it seems. So what we need to do there is charge extra to compensate for the people that aren't going to pay us. So for example, if you charge, I'll get to that. So and that's called a default premium because the default means they're not going to pay you, you know. So what we do is this is the usual situation. You know, we have a $10,000 product. Okay. And if we break that down in recurring revenue, we'll say, hey, over 12 months that breaks down to $833 a month. All right. And then the way I'm suggesting is your price is still $10,000. Okay. And we put a 15% time premium on there, which is $1,500. So now we're charging them $1,500 because that $10,000 is ours. You know, and giving them the right and us giving up the ability to have that money today, we charge them $1,500 to pay us over the next 12 months. All right. And then we also have a $10,000 price. And now we have a default premium for them. Okay. And the default premium then is 500 bucks. All right. So this breaks down to $1,500. And in your time premium $500 for your default premium. Okay. Gives you a $12,000 price. And that's $1,000 a month. So what does this allow though. So you say that and why why we do that 500 for risk is so if you have 20 clients on this and then one decides to stick you. Okay. That is so that would be he cannot pay you and you'll still make the same amount of money. Because 20 clients at $10,000 is $200,000. 19 clients at $12,000 is still $200,000. So you don't have to you could try to try to collect the money from them. But if you never can, you don't lose any money because you've protected yourself there. So here's a variation. So you, you have to pay out of pocket. There's a lot of project costs, you know, maybe you're bringing in some contractors or something like that to do this job or something like that. So you figure out what those project related costs are, what's going to cost you up front and that's what you charge them. You charge them $4,000 up front and then you have $6,000 in recurring revenue. You had a 915% was $900. You add 5%, which is $300 and you have $7,200, which breaks down to $600 a month. All right. And so you get for a $4,000 upfront and then you get $600 a month for the 12 months. So what numbers are right for you? Now, I'm giving you 20% a pretty good safe figure, but maybe you have maybe you have clients that are really hard to get a hold of the pace sometimes and maybe you want more of that. Maybe you just personally feel that you're that guy that said, hey, I need double my money if I'm letting you have it for a year. So you raise that 15% but 20% is a good number. So, so right here, we have proposals. I'm moving on a little bit. We have you send out a proposal. All right. And you're really excited. The clients going to agree to this proposal and send it out and you're super happy. And then they say this, you're like, no, no, no, no, you can't get a discount. Stop, you know, but you know they're going to say that. So, but I want you when they ask that question when they say, can I get a discount instead of getting that penny in your stomach. I want you to say, yes, how do you get a discount? You know, and I'll give you $2,000 off. And they're going to create 2000, you know, and and then when it drops your price to $10,000. All right. So we're not going to say, no, because no could be controversial and no could be confrontational. Yes. But you put an end on there. So you're not you're not doing you're not just saying, I know to them you're saying yes. Because when you say yes, it's disarming because they're like, can I get a discount and then all of a sudden you say yes right off the top and they're like, oh, okay, this is this is cool. And then, because here's the normal. I say a price is $10,000 we get 50% down and then we get 50% months later when the project is completed and you know, like if they don't have the money they're not going to get you their content. It's content or they're not going to launch your website it's going to drag on and everything like that so it could be paying the ass. Here's what I say when you do it this way your price is $10,000. Okay. You get 10,000 plus 2000 you do the recurring revenue way okay so you're up $2,000 but it took you a year to get it. If they say they want to discount you say yes I'll give you a discount I'll give you $2,000 off, but I want my 10,000 immediately. So what does this do one, it gets you your 10,000 that day, you know versus having to wait for the project is completed or having to wait a year to get it. You know, but a lot of times you're thinking to yourself, my client's not going to have $10,000 to pay me. Okay, right up front. So you've already disarmed them with the by by saying yes to the discount now you've taken that question off the table because you said yes what else can they do for that. But you're just saying but yeah but you got to give me $10,000 and they're like I can't give you 10,000 I can't give you a discount. So that's that question is handled very smoothly doesn't turn confrontational it doesn't turn they don't feel like you don't feel like they just valued you and you they don't feel like you're ripping them off. So, like I said either way you're better off and it transfers something a question that can be advantageous I mean controversial and computational into something that could be advantageous. Okay, but you know deep down inside when somebody says this question we just have this gut feeling to say never because if you ever gone on the online forums and stuff like that Facebook groups and somebody asks this question everybody says you never discount because you're worth, you know charge we're worth all this kind of stuff which is good stuff but maybe not like taken so literally because here's the thing, what's your goal in this situation. Your goal is to deliver at least I hope to deliver a product or service that will change your lives, you know that will benefit them that will prove them and improve your life because you know you're making money off it and they're getting a service that's really helpful to them. All right, so in this we're creating this win-win situation. If you ever Montefython fans. I love every so but this is what you think this is what you think they're saying to you, you know, but it's not because if we agree the goal is to make their life better. And as a result yours. You know, you shouldn't look at a discount as a request as a red flag. Okay, because it's not a referendum on your wealth. I mean on your worth. It's not. It's just a question and they were trained to answer they don't know what else to say it's like you go into a store to buy a pair of jeans. You're in that store to buy a pair of jeans that salesperson comes up to you what do you say to them just looking. You know, because we're taught to say that prospects are taught to say, you know, can I get a discount and they're not in a grocery store but you know when they're dealing with people, they're taught that so it's just like when we're When you have kids and you want to get them to eat your vegetables, you don't like force them to eat your vegetables to get mad when they don't eat the vegetable you might turn into a game or something like that or put something on them so they'll eat the vegetables. You know, so it's a win win or they could play extra video games at the individuals. I don't know. I'm not a parent. So this might be bad advice. But you know, we use these we use these tricks and tactics to get the end result that we want is the kids need the vegetables. So now I'm going to give you some tips and tricks to profit more and worry less. Okay, so meet Jenny here. Jenny's a rockstar developer. All right. And she thinks she's having a great month. Okay, a lot of a lot of deals come in and everything like that but then in a month she thinks to herself. She's like, man, where's my money. She's like, I thought I had a great month but I'm going to stress out to pay these bills, because the thing is cash is king and queen. And what sets small businesses apart from small from larger businesses is cash flow management. So I want to ask you some questions here and I want to change your thinking a little bit and think about this. I'm maybe some of you heard the story. So you're it's Thanksgiving and grandma's there and dad's cooking and grandma's cooking to and then the the daughter says, you know, dad, why'd you rip the turkey wings to turkey legs off the turkey you do this all the time to cook it in the pot. And he says, Well, that's just what grandma does. And grandma looks at him and says the only reason I did that was because the pot was too small to fit the legs in. So it's just what the dad did that because that's just what he was that's what you're seeing. That's just what he does. So, so I want to with that in mind, I want to ask you this question. So that's actually no sound but that's actually building the first of the month. And so what is so sacred about the first of the month for some reason we have this in our head that all sorts of things have to happen on the first of the month. And one of them is to pay our bills. Okay, on the first of the month, we're, we're, we're, you know, we think, Okay, on the first month, we have to pay our bills and, you know, but here's what I and so we get our recurring revenue on the first month and we pay our bills on the first month. But what happens in that situation where like my clients in the past that we got rid of thank God, but my client in the past that would go out of town and his credit card won't go through or somebody's late with their check or it was a holiday and the mail didn't come or just whatever have they got busy and forgot and you and then so you're paying your bills hoping to get that money and and what happened and if you don't get that money and maybe you can't pay your bills. So, so I say change the date that you pay your bills from November 1 to Okay, so to November 5. Okay, just from the first of the month to the fifth of the month. So, I would have had those updated February, but yes, we want to change from first month to the fifth of the month. And what this great is great wiggle room because you're getting all your money in on the first and you're not paying out your money to the fifth. So if there's a problem, if there's a shortfall, you know you have five days then to then go in and try to figure it out be like all this client hey look you need to pay me or you need this or maybe you need to transfer money and maybe you need to do something for five days because the last thing your your team members want to hear is I can't make paycheck or payroll or something like that. Now you might think to yourself Neve that sounds great but you know my rents do on the first people want paid on the first why. Again, think of the story with the pot while why do they want paid on the first, you know because it's just something that's been happening. I used to pay my team the fifth in the 20th. And I had like years ago when I had a business where I had a lease and everything like that we paid on the fifth, you know landlord grumbles in the beginning but you know, like okay I'm paying you on the fifth deal with it because you know, he doesn't want to have to go out and replace it so as long as you pay him every month on the fifth. He's not going to complain that much. So you can you can negotiate with with vendors and everything like that to pay them on the fifth and this creates you wiggle room because that's what we want we want room for our cash flow not to stress us out. All right. And so the other thing that we could do is a reserve account. And how much should we have in our reserve account. We should have I get this question all the time. We have six months of expenses six months of what our monthly expenses are. So, I actually did I wrote an article a couple years back for a business insider, and I talked about figuring out your runway. Okay. And what you do is really simple. You take your monthly recurring revenue, you minus your expenses, and that creates a gap. Okay, so if you have 10,000 coming in a recurring revenue, and you have 15,000 and expenses, you have 5,000 shortfall every month from your corner. So you need to be 5,000 on top of that. If your monthly recurring revenue exceeds your expenses like somebody yesterday told me, that's fantastic. That means you can run your business with cash flow problems. And then you take the money you have any savings you have and that's your available cash. And so you add so you add you add that up, and then you divide your available cash by the gap. So you have you have 10,000 in recurring revenue, and you have 20,000 in cash. And so that gives you $20,000 and you have, and you have a shortfall 5,000 every month. That means you can run your business for four months with making no new sales. So you don't have to worry. So if you have a bad month one month you're not worried about if you have a bad two months you're not worried about it. So if you get to about six months on there, the longer you have the better. I remember I was dealing with with a client who had 19 months when the pandemic happened and he was like, not stressed out at all. Because he knew things were going to bounce back within that time. So, so yeah I just kind of went over this quicker. So here's some takeaways. So time and money are related. So we should price properly. We should get rewarded for letting people hold our money for longer. You know, we're not we're not a charity. We're not, you know banks aren't going to give you interest free loans. You know, so why should you give your clients that so cash is king. And discounts are can lead to better and more profitable results if handled right. All right. And discount, discount requests aren't about your skill. It's just the prospect default response to, you know, being shown a price. All right. Now I want to talk about, I feel it's wonderful to be at work camps. I feel our community is wonderful. I feel that we could afford to be here be around each other hanging out. I think it's, I think we have, I think it's, it's a blessing. I think we have a lot of blessings in life. You know, we, we could run, we could work with fabulous companies. We could run a business. And I think that's pretty special. All right. And open source and is, is a great way, you know, giving back to the WordPress community for the future, everything like that, being able to help clients being able to give back to our communities and everything like that. We do that from our heart. But then we have our brain that tells us, Hey, we got to make money. We're in business to make money, you know, would be ruthless, you know, those kind of things, you know, we can't, can't show weakness in business and everything like that. So, but so the heart goes that way and thinks care is caring and the brain's like all about money then see. And so it's always a give and take if you're, if you're caring about business, if you're giving back, if you're doing this kind of thing, you're, you're, you're, you're being less profitable and everything like that. And then if you're, if you're being like a capitalist, if you're being a good business owner, you're not leading with your heart, you're not caring as much. And I think both of them could be combined. Okay, I think we can lead with a heart and our mind, we could be really profitable and really caring at the same time. Because like, and when that happens, there's a lot of charities out there and there's a statistic that 99% of charities are unfunded because I think there's a hundred or some thousand charities out there. So if we do what I'm talking about here, we could then get into philanthropy, we could then, if we're making more money and everything like that, if we're following these messages, we're more profitable business, we could get into being able to give back, say give back to five of the future, give to that local charity in your area and everything like that. So, and I think the best way to do that is actually through capitalism. So like, like I said, making money, doing all this stuff that I'm telling you to make more money. And because here's the thing, and I'm not talking this guy's former capitalism. I'm talking about a, I'm talking about this form in the past 20 years, extreme poverty is class from a whopping 94% to 10%. You know, and here's the chart of when we started embracing these principles and they've gotten out of control, I think. And, and that's why I think we need to be do more a form of compassionate capitalism. And I think it could be more profitable and more caring at the same time. And because I think what we learned here in all these word camps and all these talks to be a run a better business, I think we can change the world. And I think that's really great. So here's my challenge to you is to redefine capitalism. All right. And because here's what I'd like to see one day. I would love to see, you know, when you when your kids are your grandkids, when they're at, you know, when they're in second grade and they're at that career day and, you know, so Susie stands up and she says, and she says, I want to be a firefighter because firefighters, they go into burning buildings and they save people's lives. And Jimmy stands up and says, I want to be a vet because I love animals. And, you know, vets, they take care of sick animals. And I just I just think that's wonderful. And then your kid stands up. And he says, she says, I want to be a capitalist. Because my mom's a capitalist. And she makes the world a better place. Thank you. That's my talk. Any questions. I have the mic. Just curious in terms of recurring revenue. So you presented sort of a pricing structure. What about I was sort of hoping to hear some brainstorming, maybe from other attendees about ways to increase one's recurring revenue in my word press business. Website care packages affiliate links is can we talk about that a little bit about options for how to increase returning recurring revenue is sort of side hustles in your business. So, well, I think offering. So what I showed you there if you if if you want to increase, you could take any product and create into recurring revenue product. So like I said, you just have to like if you take a $10,000 product, you could break it down into $1,000 a month for 12 months and that creates recurring revenue. So for you, if you want to do like care plans are a great way to have recurring revenue, you could do what are some other ways to create recurring. You could have, you know, some kind of like maintenance care plan. What do we used to do when we would create recurring revenue? We would do like retainers, you know, where we would give X number of hours for consulting kind of stuff like that. You could sell products and stuff like that are a great way to create recurring revenue. Yeah, there's a great retreat recurring revenue retreat. Oh, yeah. Yeah, I think I gave. I think the first time I gave this talk with that recurring revenue. That's why it's, yeah, that's why it's called profit pricing for recurring revenue. It happens in November the weekend before Thanksgiving. Yeah, yeah, it's a great talk. It's really in a minute. It's fantastic. Christina Romero and was that? No, no, no. I can't think of his name. Yeah, no, no, it's he does a Disney stuff. Oh man, I can just picture him. But anyways, yeah. Yeah, yeah, it's really great. Yeah, it's really nice. I it's recurring revenue retreat. That's the R3 recurring revenue retreat. We are in a room of wealthy people. Yeah, sure. Yeah, yeah, yeah, I'll make the output. I'll put these slides in there. Yeah, definitely to repeat it for the recording. The question was, will the slides be available? Yes. I know, and I'm staring right at the light. Hell getting old, but I wouldn't have it any other way. Thank you. So you kind of one of the slides I think that would have been very helpful to us. You kind of went over it really quick. Can you go back to it? And if you use big numbers, when you will actually show in the breakdown on how to get the one all the amortization and the arrow can give like a given example, big numbers so we can actually kind of see it. Which side and let me go back to the one that you just like this one. This one, like fighting your gap, like just kind of give us some numbers and kind of go with it. Sure, a little bit more slowly so we can make it sink a little bit. I know you can actually teach it, but no, no, no, I can definitely go over this a little bit more. So you, what you're doing is your, your, okay, so this is, this is monthly recurring revenue. So say you have 10,000, say you say a 5000 recurring revenue. Okay, and this is your monthly expenses at $10,000. So your gap is a negative 5,000 a month. So you have 5,000 coming in, but you have 10,000 expenses like your fixed expenses every month, whether you get a new project or not, you have to pay 10,000 every month. So your, if you don't make any sales, if you don't have any more money coming in, you're down 5,000. Okay. So, so now we know what our gap is because it all it is is your monthly expenses minus any recurring revenue you have coming in. So then here, this is any cash you have saved. Okay. And, and then this is a little bit more complicated. I have a worksheet that I'll share with you guys on this too, if you want, that walks you through all this really easily. Then you have any money saved any work you have any invoice work you might have coming in. So that you've already finished that you're just waiting one. And then, then if you have any big expenses coming up like a host and go but anyways, so this is pretty much just the cash you have saved, plus maybe money you have coming in, and then that's your available cash. So now, so say you have $10,000 in the bank, and then you have $2,000 in invoice work. Okay. So, so what you do then is you just take that take that money. So you're available cash then I think this side is better. So it's. So you're missing right here. So your monthly recurring revenue minus your divided by your gap. So you have. So, yeah, so, so if you have 10,000 there. So if you have a $5,000 gap. Okay. And then you have and then you have 10,000 save and you have 2000 that that you're getting that you have the invoice. So you have 17,000 here. All right. And then, so you know you have set and then you have 5,000 here so you just divide these numbers. And so 5,000 divided by 17 gives you like 3.4 something like that. Rough math off the top of my head don't know if I'm wrong, but it's at least three. So you know you have three months, you know, to to run your business because you have cash you have money coming in plus the cash you have. I have a worksheet that I'll share with you guys to that explains all this step by step. It's pretty much dividing your dividing the money you have by by how much you know your monthly expenses are and it gives you how long it's called a runway gives you how long you keep in business without having any new business come in. So it's just it's a security thing that says okay I know if the absolute worst happens, like I get still run my business for four months. And it's just, you know, so when bad things happen it's kind of reassuring to know that hey, it doesn't matter. So it sucks but it's not going to hurt the business because I get still staying business. Or it tells you that hey look, if I have a bad month, I'm not going to be able to pay my bills so then you maybe need to start saving a little bit more coming back on some costs or something like that. Does that answer your question probably not that good. Sure.