697: 10 Recurring Revenue Side Hustles

26:03So I knew if I could just write that newsletter for you, maybe you'd give it a shot and you would see results like mine. So within the membership, you just get a weekly newsletter template to take and make your own. That was low responsibility for me because in my client work, that's what I was already doing. I was writing emails for people. I had owned two businesses prior, writing emails to people. I had an entire catalog of emails that I had been writing for years and years and years. I can just have this one deliverable of this thing. I already have a back catalog of that I can templatize and I can send out once a week.

26:43Yeah, I can commit to that for the payoff in two years. I'm going to be able to retire client work over here. Okay. Yeah, Liz, let's try it out. That clip was from episode 600. If you want to go check out that full interview with Liz, cool example, I think of selling your sawdust. Like what is a by-product of the work you're already doing? Could you repackage and sell that to a different audience? But when it comes to memberships, there are different ways to structure it depending on what your ideal member is going to value. The common saying in the online business world is people come for the content, but stay for the community.

27:16So maybe you add some level of member interaction through a Facebook group, private forum, discord community, and a membership could be for a product or a service. You probably subscribe to both in your own life. I'm thinking of Netflix, Costco, the yoga studio, Dollar Shave Club, KiwiCo, Life Insurance, all kinds of examples of businesses under this recurring revenue membership umbrella. Paid newsletters could be another example in the online business space. We've heard from entrepreneurs gating certain members-only content through a service like Patreon. Oh, and we had one interesting example was the Survival Podcast.

27:54Jack called it the Member Support Brigade. I think it was basically an annual discount club that he put together for his listeners. Like, hey, you're probably going to want these products anyway. So I went out and negotiated a special deal for you, and you can get access to all of those deals for an annual membership fee. So when we spoke, I don't think there was a community element to that offer at all, where listeners could interact with each other. It was just structured as like a discount club. So I've long contemplated putting together some kind of membership offer for Side Hustle Nation, but it's a case of analysis paralysis.

28:29not sure the best way to make it really compelling and valuable for you. I'm open to ideas. Send me a note. Let me know what you think about that. But memberships are number five on our list of 10 recurring revenue side hustles. Lots of examples of those in the archives if you want to dive deeper on that topic. Number six is websites, which used to be fairly straightforward. Build up a body of informational content in a given niche, rank that site in Google, and then earn relatively predictable, relatively passive income from advertising and affiliate relationships. Those types of informational content sites have been having a hard time lately.

29:04And this includes Side Hustle Nation. My earnings from just straight up SEO have taken a huge hit. But websites can still be a recurring revenue asset. One model that we've seen to be a little more AI resistant is directory websites, which might sound kind of old school. But in our recent episode with Ray Chu, he proves there's still good money to be made with directories. The key is finding underserved niches and then building something genuinely useful with some value-added data. Because after all, if people can get everything they need from Google Maps, there's no real reason to come to your directory.

29:38So the value add, you got to have some extra layer of data that you're providing that Google is not. But here's Frey from episode 692 on the money milestone for his first directory, which was in the thrifting niche. Six months in, I randomly just pulled up the Google Analytics and noticed there were a thousand people coming to that website that day. And I just remember staring at it for five minutes and being like, what is going on? Like, where is this traffic coming from? Yeah, is this real? Yeah. At that time, I was like kind of a noob at SEO too. I was relearning or just learning all the basics.

30:15So I was thinking, oh, maybe I did something correct. And I started putting ads that following month and the traffic kind of steadily came in and I made$1 ,200 that month without really doing anything. It was just putting up ads. Was this just AdSense? Yeah, I actually ended up using Ezoic. That was the media partner that I used. And now I'm using Mediavine Grow, which is kind of my go-to ad partner now. Okay, so you built the thing and then kind of sat on it, I guess, let it age potentially in the search results and establish some domain. I don't know, do you do anything proactively to market it during those six months or just like log in one day?

30:54Hey, it actually is getting traffic. I did post on Reddit and I talk about that a lot. Every time I finish an entire directory build, I always find a niche subreddit and I'll make a post. it'll basically sound like hey i made a website to make xyz easier or to find x y and z locations easier and yeah that's kind of the only thing that i did it was responsible for maybe like a few hundred people coming to the website because that reddit post performed really well and people still commented to it on this day uh you know a couple years later but yeah really nothing much nothing too fancy was done all right well maybe we can pull it back and say what attracted you to this business model?

31:35I think every entrepreneur goes through this moment where they either struggle to start something or start something and realize that's not the thing that they want. So in my case, I was running a full-wear business. I was closing it down, super depressed, very low point of my entrepreneurial life. And I realized what I really wanted was a business with five things. And it was something that was scalable, something cheap to start, something remote where I didn't have to like go to a warehouse and pack shoes and ship it to customers, something with high margin and something that could be sold as an asset.

32:07And I scoured the internet for these businesses. Very difficult to find. I found two. Yeah, this is a little bit of a unicorn, like something that checks all those boxes. Totally. So I found, I think I landed on SaaS or websites and I'm not a coder. So, you know, and this was kind of pre like, this was early AI. Yeah, pre AI vibe coding stuff. Exactly. Yeah. The vibe coding was not a thing. yet. So I landed on websites and I saw exactly what you mentioned, which is niche informational blogs were getting absolutely destroyed, especially starting September 2023 with the helpful content update. So I was like, okay, well, I guess I'll just look on Ahrefs and see what wasn't affected.

32:48And I started noticing these directories. I didn't really like go into it thinking I'm going to go build a portfolio of directories. I was just like, okay, well, this, I found this website that was getting over 100 ,000 monthly visitors and it was rank one, page one for my target thrifting keyword. And I was like, I could do better than this. This is like pretty ugly. And I feel like not that helpful. There could be better information. It's also out of date. They're missing a lot of locations. And I was like, OK, I'm going to go and build it. And yeah, once I started ramping up and that kind of aha moment happened, I was like, OK, this meets all those five criteria and I can just keep building these out.

33:26That's what launched the directory side hustle for me. Again, that's Frey Chu from episode 692. Highly recommend checking that one out if you've been impacted by the last couple years of SEO upheaval as a way to potentially fight back and start making money online again. And I love the five criteria he mentioned. Scalable, global, cheap to start, remote friendly, high margins, sellable as an asset. That's a pretty solid framework for evaluating any business opportunity. In fact, the episodes featuring side hustles that check those boxes tend to perform pretty well. So maybe a directory will be my next side hustle.

34:00There are unfortunately more ideas than there are hours in the day. But don't sleep on websites as a recurring revenue opportunity. Traditional article-based Q &A SEO, tough right now. But certain types of websites are still getting traffic, traction, and revenue. And that is recurring revenue side hustle number six. I've got more recurring revenue side hustles coming up right after this. One of the tools I've personally seen make a huge difference for business owners is Quo, formerly OpenPhone. It's the same great business phone system you've heard me talk about before, just with a new name. When you're running a business, you know that every missed call is a missed opportunity.

34:36So Quo, formerly OpenPhone, this is the number one business phone system that streamlines your customer communications. It works through an app on your phone or your computer. So no more using your personal number as your business line. No more carrying two phones around. With Quo, your team can share one phone number and collaborate on customer calls and texts just like a shared inbox. So anybody can jump in to keep response times fast. And this is where it gets super cool. You can set up Quo's built-in AI agent in just a few minutes to handle calls after hours, answer customer questions, and capture leads on autopilot.

35:10I want to invite you to get started for free. Plus, Side Hustle Show listeners get 20 % off your first six months at Quo.com slash Side Hustle. That's Quo.com slash Side Hustle. Look at them getting that three-letter domain. Quo.com slash Side Hustle. And if you've got existing numbers with another service, Quo will port them over at no extra charge. Quo, no missed calls, no missed customers. There are less than 100 days left in 2025, which means less than 100 days left to hit those goals that you set or to refocus your energy on what really matters. If you've got some catching up to do and maybe you've been procrastinating on taking that next step, our sponsor Indeed can help you find the best candidates for the role you need to fill and find them fast.

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36:31Just go to Indeed.com slash Side Hustle Show right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash side hustle show. Terms and conditions apply. Hiring Indeed is all you need. Number seven is a side hustle that probably doesn't get enough airtime, and that's product licensing. This is where you can turn your ideas into recurring revenue and get paid every time a major company sells your product idea, and you didn't even have to worry about manufacturing it. Stephen Key from InventRight has made a career out of renting his ideas to companies that already have the distribution and manufacturing and marketing power to bring them to market.

37:14Here's Stephen explaining why a licensing can be faster and less risky than starting your own product company. It doesn't require any capital. You don't have to set up a company. And there's so many companies out there that need us creative people. So they're looking for ideas. And every year, there's just more and more opportunity for us to submit ideas to companies and let them pay us royalties for everyone they sell. So that's the basic business model is saying, hey, I am the idea guy who we just had on the show, and I'm going to turn around and essentially sell that intellectual property to some company who can turn that into a product and make money off it.

37:50Absolutely. You're basically renting your idea to a company. Okay. And they're going to pay you on everyone they sell. So you don't have to start a company. You don't have to worry about manufacturing or raising money or do any of those things. And what's really great about it, Nick, it's really speed to market today, right? If you start a company, raise capital, all those type of things that you need to do to be successful, it takes a lot of time and effort. When you license an idea, you find that perfect partner that has relationships, distribution, money. They can put your product on the shelf extremely, extremely quick.

38:24Stephen went on to explain that 5 % of gross sales is a pretty typical product licensing agreement, which may not seem like a lot. But if you think about the distribution and economies of scale that some of these larger brands have, it can really add up, especially for something with super low startup costs. I mean, you're basically taking something for free out of your brain and getting paid for it. And Stephen has some great tips on how to approach companies with your ideas, how to find the decision makers. but one thing that was surprising to me is that a lot of companies already have a process for this they're really open to crowdsourcing product ideas from people like you and me and paying us for them for example if you look up hasbro submit ideas you're going to find this structured program called hasbro spark that lays out how it all works how to submit your proposal and stuff like that so be sure to check out that full episode with steven for more on how it all works which i will link up in the show notes.

39:18So product licensing is recurring revenue side hustle number seven. Number eight is web design and hosting. And before you say, well, I don't know how to host or design websites, let me offer a gentle reminder that everything is learnable. And after you hear the next clip, you might be more inclined to learn it. In episode 550, Ryan Golgoski discovered something really interesting. Instead of selling websites for thousands of dollars up front, what if you charged a few hundred dollars per month for ongoing design hosting and maintenance this model makes websites a lot more accessible to small businesses while creating predictable monthly revenue here's ryan explaining how he makes this value proposition work if having a better website that is going to offer a better user experience it's going to better your seo there's going to be better conversion optimization on the site even if it's just generating for you one extra sale a month, you know, that's extremely conservative way to look at it.

40:18It's the service is already being paid for and then some. So it's, it's a pretty simple, easy sell. Whereas like, if I were to, you know, try to sell a website for five grand, a lot of people sell websites for even more than that 10 grand for a company that's, you know, not doing millions of dollars in sales. That's like a huge number to them. And it's hard for them to justify. But, you know,$180,$220,$300 a month, and they're not only going to get more leads, they're also going to look a lot better. So there's going to be so much more perceived value to their marketplace. They're going to be perceived as the high-end, luxury, most professional service provider.

41:02And you're doing several of these a week at this point, it sounds like, volume-wise. Yes, yeah. So at 20 a month, give or take, sometimes less. But last year we did 211 new signups. And this year, shooting for 250. Yeah, listeners can do the math on that and say, wow, that's a pretty substantial operation. And now once it's in on the developer's desk, what's their typical turnaround time to get this thing up for approval or up for hosting? Yeah, so the initial stage of development, it should have about a week's time max. They could get it done quicker than that. Then it will go to the project manager.

41:46They'll be going back and forth with the client if they need any revisions. That will go back to the developer. And then if we're doing content, that will take a little bit of extra time for us. If they're doing content, it could be fast. It could take a year. Who knows? But we shoot for about a four week timeframe for the project from the time they sign up to the time their site goes live. Okay. Okay. Just to give yourself some buffer room in case there's any back and forth. Okay. Cool. And do you consider, you know, the upfront developer time and some of these other upfront costs? Like, is there a sense of the break-even point?

42:25Well, after three months, we're good. Or after six months, like, it's all gravy. And so if we can keep that person on for six months and keep them happy, like, I mean, yeah, they signed the contract, but who knows? I just try to get it figured out for like, yeah, you're running some labor. and some other expenses up front here. Yeah, yeah. I mean, definitely starting out, it is not as efficient or profitable, but over time, you'll really refine your systems and you should be able to, at least your fixed costs should be covered by about two months of the customer's payments. Fixed costs covered by two months of customer payments, meaning the next 22 months are almost pure profit.

43:06Again, that is episode 550 in your archives, definitely one that I refer back to quite a bit and likely replicable in a ton of different niches. Remember, Ryan was focusing on power washing companies as his primary client base. Now, the key is that monthly support or that monthly payment includes ongoing value hosting, maintenance, updates, and support. Our next recurring revenue example is what I'm calling subscription e-commerce. Think Amazon subscribe and save. Think subscription boxes. Think replenishable products in the direct-to-consumer space. Element comes to mind. Those little salt packets, once you use them up, you're probably going to order more.

43:45Dollar Shave Club for razors, supplements, and vitamins. After all, it's easier to sell the same thing to the same customer again than it is to sell a brand new thing to a brand new customer. So we had a couple guys on the show last year or the year before, and their product was a replenishable product in the skincare space called Pretty Boy. Skincare for men, yo prettyboy.com I think was the site. But between the initial inventory and the marketing expenses, it can be a pretty capital intensive business. Ben Fays and his partner Kevin found success by focusing on one key metric, making sure customer lifetime value exceeded the cost of acquiring that customer.

44:25Here's Ben from episode 581. Is there a metric you like to be at in terms of cost of acquisition? From a profitability and break-even point, we want to be in the mid-20s because of our LTV, which hovers in the$70 to$80 range, and because of how frequent people transition to subscribers and then how long those subscribers stay. For us, I mean, Nick, I'm sure you're familiar with Andrew Ferris. I don't know that name. Okay. He's a big econ guy, does a podcast. He talks a lot to brands like ours at his podcast. We're his target audience. we listen to this podcast that we found so interesting, which he's like, if you start to see that your repeat customer rate is basically exceeding your new customer rate.

45:01So if returning customer revenue is outpacing new customer revenue for sustained months, what that tells you is that you should be basically doing everything you can to throw a boatload of cash at getting new customers. So now that CAC metric for us hovers more in that like 35 to the low 40s range, because we know again with that LTV that that customer, we are willing to bet heavily that if If you buy our product once, you will at least buy one more. And we think a vast majority are going to subscribe. About 60 % of our revenue on a given month comes from subscribers. Okay. You have the subscribe option versus just...

45:33Okay. Which again, meet the customer where they want to be. Like Shopify would just let you do that? Like make it a recurring purchase? There's tons of apps on Shopify. It's one of the most user-friendly platforms you can have. We use a service that specializes in subscriptions. And some of the things like why I was saying meet the customer in the middle that they do so well is our subscription model allows you to pick your frequency, 30, 45 days, or 60 days. You can sign up to manage everything via text. So you can skip an order. You can cancel at any time. We're not holding you to anything. You can pause your subscription for one, two, or three months.

46:03We're going to make it as easy as possible for them to do business with us as long as they like the product and the brand. Again, that's Ben Faze from episode 581 from yoprettyboy.com and his recurring revenue side hustle in the skincare space under this category of subscription e-commerce. Now, one thing to keep in mind is the timing of cash flows. It can look great on paper. Hey, a customer is worth$100 over their lifetime. We can buy ads. We can acquire those customers for$50. No brainer. Let's do it all day, except Google and Meta want to get paid today, or at least whenever your credit card comes due at the end of the month.

46:38And that$100 LTV might not hit your account for several months or a year or maybe more. But it definitely makes you think about what kind of replenishable products you buy on a regular basis. Coffee, toilet paper, protein powder, greens powder like Bloom or AG1, shampoo, deodorant, lots of examples in those spaces, but maybe some side hustle opportunity as well to come in with some unique positioning and make a name for yourself. Even Mark Rober in his Crunch Labs build box would qualify, right? But I think there's a higher degree of difficulty because his team in that case is having a recreate the product every month.

47:14It's coming up with something new, something you don't have to do if it's just chipping out a new set of razors or another tube of skin cream. But subscription e-com is recurring revenue side hustle number nine. Our final example takes a traditional high-touch service and makes it surprisingly scalable, and that's coaching and masterminds. So coaching and masterminds typically require a lot of personal time and attention, and because of that, they're usually higher ticket, like hundreds of dollars a month or more. But in episode 570, Stephen Faust found a clever way to scale personal mentoring using technology.

47:50So instead of traditional group calls, which he found he didn't love doing, he offers unlimited one-on-one mentoring through an asynchronous video platform. Here's how he makes it work in the military career niche. What's better than just selling stuff one-off is getting people to pay you every month. and I leaned into that and my membership includes a lot of the stuff I sell one-off, which is kind of maybe a faux pas in some ways, but my digital products that I sell are inside the membership, right? Because what I realize is not everybody wants a membership, right? Sometimes they want to buy stuff and sometimes they just want to get more help and support in a membership.

48:29So I have all of the things that I sell one-off inside the membership. Plus I have some additional things, some additional workshops. I'll usually add a new workshop once a month, a topic, a leadership topic. I also do, and this is maybe a little unorthodox, I stopped doing member calls because mainly I didn't like doing them. I didn't like having to be, to show up. I'm more of a passive income guy, which doesn't really fit memberships, but that's kind of what I desired. So I stopped doing member calls because I didn't like them and people didn't really attend them that regularly. So what I do now is I do, and I sell it this way, included in the membership is unlimited one-on-one mentoring.

49:11Unlimited mentoring for$39 a month, plus all the stuff that they get in there as well. So that's the stickiness of my membership is the once a month workshop and the unlimited one-on-one mentorship. How do you deliver that? Exactly. Great question. Great question. And I know you're familiar with this, I'm sure. Video ask. I don't know video ask. Okay. Video ask. It's a great tool. It's kind of like a Bonjoro on steroids or a bomb bomb on steroids. Okay. So video ask.com. I use that. And what that does is it creates an asynchronous funnel that I have in my membership where it has a video of me giving an instruction going, Hey, if you have any questions, you need help or support.

49:54If your boss won't help you, I'm here for you. I got all this experience. Let me help. Ask me anything you want. So they click a button, they can leave a video, they can leave an audio, or they can leave a text. They can choose their own adventure and how they want to communicate with me. They hit the button, it goes into the funnel, video asks, sends me a notification that says, hey, Susie left you a message in this funnel, this mentoring funnel that's for my members. I go in on my phone and I click a button and then I will watch, listen, or read what she says. and I've done this in traffic at a light.

50:29I've done it at the supermarket. I just push a button and says, hey, Susie, great question. Here's what I would do. Step one, two, three. If you have anything else, let me know. I click a button. It sends her the response. It literally takes a few seconds. It's very low friction for me because people don't overuse it and abuse it. If they did, I'd probably stop doing it. But they don't. And it's really personal and confidential and it creates a lot of stickiness in the membership because they can get that support when their boss won't help them or they're just scared or they don't want to reveal their problems to people around them.

51:02And that's how I help them. That's really interesting because on the surface, I would say unlimited one-on-one mentoring. Unscalable. That sounds way worse than a monthly group call. Like, okay, I just, I know when I have to show up. Like I'm not, but you know, but what you're saying is like high perceived value. Oh, I can ask a question anytime I want, but realistically, they're not pinging you at all hours of the day and night times 200 members. I might get one or two a week. I don't get many at all. I just don't get it because I think people see that as, oh, this is a pretty, pretty high value, important thing.

51:35I want to make sure I use it the right way. Yeah, yeah, yeah. Yeah, I believe it's the case. It's never been a problem. I have a hundred minute plan with VideoAsk. I've never, it's 30 bucks a month. I've never run out of it. And I embedded into Kajabi, into a lesson. It's a beautiful workflow and funnel that is so easy to deliver and fulfill. Just one or two questions a week, high perceived value, definitely sustainable from Stephen's standpoint. The biggest risk I see is in people canceling it who aren't using it for several months in a row. And maybe for Stephen's audience, the$39 isn't a big deal and they kind of want to keep it in their back pocket knowing they have access to them should the need arise.

52:13And we talked about this recently, pricing your service as a utility where it's barely a blip on the credit card statement. Is it really worth canceling? I believe this is the entire business model of Planet Fitness, right? Like, let's get a bunch of people in at a low price with the understanding that, yeah, the majority of them aren't going to be heavy users, but they keep paying because, well, they plan to start going more next month, right? It sounds really similar. In Stephen's example, and this was episode 570, I think it's a really interesting one, and maybe one that you could layer on top of an existing product or service offering for some incremental revenue in your own business.

52:49so to recap today we've been talking about 10 recurring revenue side hustles the first was software and specifically white labeling a software tool that already exists check out the episode with chris lolini for more on that we talked about a local subscription service like the pooper scooper example we talked about an online subscription service recurring monthly local seo was the example that we use there number four was real estate rental properties number five was a membership through the lens of Liz Wilcox's$9 email marketing membership. We talked about six was websites or directory websites as being somewhat AI resistant compared to these traditional article-based or information-based websites.

53:29Number seven was product licensing. Remember, check out Stephen Key from InventRight for more on that. Number eight was recurring web design and hosting through Ryan Golgoski's 180 sites was the example there. Really, really profitable, really interesting business. Number nine was subscription e-commerce, thinking about what kind of replenishable product you might be able to create or even white label. And number 10 was that coaching and mastermind example with Stephen Faust. The common thread through all of those, though, is solving recurring problems. That's the way to build some predictability, that same predictability of a steady paycheck, build that into your side hustle.

54:06So you're not starting from scratch every month or dealing with that feast or famine cycle of freelance life. The key, I think, is picking a model that matches your skills, your interests, your available time. Chris Lelini's software approach requires different sales skills, different strengths than the local service business or than building directory websites. As per the usual, we've got a detailed text summary of this episode on the Side Hustle Nation website, complete with links to all the full episodes mentioned so you can dive deeper into any of the models that caught your attention. all you got to do is hit the show notes link in the episode description and it'll get you right over there.

54:43Now, certain side hustles may resonate with you more than others, which is why I want to invite you to generate your own personalized side hustle show playlist of some of our greatest hits episodes. How it works is you go to hustle.show, answer a few short multiple choice questions, you do it right from your phone, and it'll build you a custom curated playlist based on your answers that you can add to your device. You learn what works and you can go make some more money. Again, that is hustle.show for that personalized playlist. Big thanks to all our incredible guests who shared their insight for this episode.

55:16Big thanks to our sponsors for helping make this content free for everyone. I want to invite you to hit up sidehustlenation.com slash deals to take advantage of all the latest offers from our sponsors in one place. That is it for me. Thank you so much for tuning in. If you're finding value in the show, do me a favor, help spread the word, fire off a text to a friend. Hey, I think you'll like this. until next time let's go out there and make something happen and i'll catch you in the next edition of the side hustle show hustle on