Choosing Your MRR Model

The Model That Fits YOU

Last week we talked about the why. The psychology of predictable revenue. The math that compounds. The freedom that comes from waking up with money already in the bank. If you’re still thinking about those numbers, (about what your business could look like with recurring revenue), then good. You should be.

But here’s where most people get stuck. They get excited about the concept of recurring revenue, and then they try to force their business into the first model they come across. They see someone crushing it with a membership site and think “I need a membership site!” Or they hear about SaaS (Software as a Service) and think “I should build software!” without stopping to ask whether that actually makes sense for them.

Here’s the truth: not all recurring models are created equal. And more importantly, what works brilliantly for someone else might be completely wrong for you. The goal this week isn’t to convince you that one model is better than another. It’s to help you discover which recurring model feels like a natural extension of what you already do well.

Because when you find the right model, you know, the one that matches your strengths, your market, and honestly, your personality, everything else gets easier.

Understanding the Spectrum

Before we dive into specific models, you need to understand that recurring revenue exists on a spectrum. On one end, you’ve got passive models. On the other, you’ve got active ones. And in the middle, you’ve got everything in between.

The passive end looks like product subscriptions, software, digital memberships. These are models where once you build the thing, your ongoing delivery is minimal. A customer signs up, they get access to what you’ve created, and you’re not spending hours every week directly serving them. The upside? Massive scalability potential. The downside? Usually lower price points and you’re competing on volume.

The active end is service retainers, done-for-you programs, high-touch coaching. These models require significant ongoing delivery. You’re working directly with clients month after month. The upside? You can charge premium prices. The downside? Your time doesn’t scale, and if you want to grow, you need to build a team.

Then there’s the middle ground, hybrid models that balance both. A membership with some group coaching. A SaaS tool with setup services. A subscription box with a community component.

Why does this spectrum matter? Because your position on it should match your personality, your resources, and your goals. If you love working with people and get energized by client relationships, a passive model is going to make you miserable no matter how profitable it is. If you’re an introvert who loves building systems and hates meetings, trying to run a high-touch service retainer business is going to burn you out.

Take note, no model is inherently better than the other. The best model is the one you’ll actually execute. So let’s look at the five main options and figure out which one fits you.

Model 1: Subscription Products and Boxes

This is the model everyone thinks they understand because we all subscribe to something. Netflix, Spotify, Dollar Shave Club. But it works for way more than just tech companies and razor blades.

At its core, this model is simple: physical or digital products delivered regularly. The core appeal? Customers never run out, and you never run out of sales. It’s the ultimate win-win when done right.

Who this fits: Product creators, ecommerce entrepreneurs, artisans, anyone making something people use regularly.

Think coffee subscription boxes, meal kit delivery, digital asset libraries like templates or stock photos, consumable products like skincare or vitamins. If people need to buy your thing more than once anyway, why not make it automatic?

The key here is that your product must be consumable or have ongoing value. You can’t really do a subscription model for wedding dresses. But vitamins? Coffee? Design templates? Absolutely.

What makes it work: Quality has to be consistent. If your coffee subscription sends amazing beans one month and garbage the next, people bail. Your logistics and fulfillment need to be tight. And here’s something people underestimate: the experience of receiving the product matters enormously. There’s a reason subscription boxes invest in packaging and presentation. That moment of opening a received package creates a big emotional connection.

Pricing typically runs $20-$100 per month for physical products, $10-$50 for digital. The challenges are real though. Inventory management if you’re doing physical products. Shipping costs that can eat your margins. And, customers expect variety or novelty, which means you can’t just send the same thing every month forever.

But here’s the hidden opportunity: many existing product businesses have subscription potential they’ve never considered. If you’re already making and selling products, you might be one pricing pivot away from recurring revenue.

Model 2: Membership Communities

This is where things get interesting because people aren’t just paying for content anymore. They’re paying for belonging. For access. For community.

A membership gives people recurring access to content, community, or both. And honestly, the community piece is often more valuable than the content, even though most people building memberships don’t realize this at first.

Who this fits: Educators, thought leaders, niche experts, community builders. If you already create content or have an engaged audience, you’re 70% of the way there.

You can structure memberships in different ways. Content-only memberships give access to video libraries, courses, resources. Community-focused memberships are about forums, networking, peer support. Hybrid memberships combine everything; content plus community plus live events.

The beauty of memberships is they work across every niche imaginable. Business coaching memberships with monthly training and peer groups. Fitness memberships with workout libraries and accountability communities. Creative memberships with tutorials and feedback forums. Industry-specific networking groups. The possibilities are endless.

Pricing runs anywhere from $27 to $297 per month depending on value and exclusivity. The lower end is usually content-heavy with less personal interaction. The higher end includes more access, more community, more direct engagement.

The content challenge: How much new content do you really need? Less than you think. The dirty secret of successful memberships is that you don’t need to create new content every single day. A solid evergreen foundation plus periodic updates can be enough, especially if the community is active. Members generate value for each other.

That said, unlike passive subscriptions, members need reasons to return. You’re fighting for attention in a world where everyone is overwhelmed. This is why the pure content memberships struggle. People join, download everything, then ghost. The community piece solves this by creating ongoing reasons to show up.

And here’s something counterintuitive: ghost members aren’t always a problem. If someone is paying $47 a month and not actively participating but also not canceling, that’s actually fine. They’re getting value from just knowing the resource is there. Don’t guilt yourself over it.

Model 3: Software as a Service (SaaS)

This is the dream for a lot of people. Build software once, sell it infinitely. The ultimate scalability model. But most people hear “SaaS” and think they need to build the next Salesforce. You don’t.

Who this fits: Technical founders or people willing to hire developers. But here’s what’s changed: no-code and low-code tools mean you don’t need to be a programmer anymore.

The opportunity is in micro-SaaS. Simple tools that solve specific problems. Industry-specific calculators or databases. Workflow automation for niche markets. Integration tools that connect existing platforms. These aren’t massive enterprise solutions. They’re focused, simple tools that a specific group of people desperately needs.

Think social media scheduling tools for a specific industry. Invoice generators for freelancers in a particular niche. Inventory management for small retail. A CRM purpose-built for real estate agents or wedding planners. The more specific, often the better.

Tools like Bubble, Softr, and Adalo let non-programmers build functional software. The trade-off is you have some limitations compared to custom-coded solutions, but you can get something working for a fraction of the cost and time. Let’s not forget that with AI around us, a lot of that programming can be done with its help.

Pricing typically runs $10-$500 per month depending on your target market. The magic of SaaS is that it gets stickier over time. Customer data lives in your system. Integrations create dependencies. Workflows get built around your tool. Switching becomes painful, which means retention tends to be high.

The challenges are real though. Technical maintenance and updates never stop. Customer support for technical issues can be demanding. You have security and data protection responsibilities. And you’re often competing with larger, better-funded players.

Start smaller than you think. Way smaller. Don’t try to build task management software for everyone. Build a project tracker specifically for wedding photographers. That level of specificity is what makes micro-SaaS viable.

Model 4: Service Retainers

This is the model for service providers who are tired of the project-to-project grind. Instead of selling one-off projects, you’re selling ongoing partnerships.

Who this fits: Consultants, agencies, freelancers, anyone currently selling services on a project basis.

Common retainer services include marketing (social media, content, SEO), financial services (bookkeeping, CFO advisory), technical services (website maintenance, IT support), creative services (design, video, copywriting), and consulting. If you’re doing it as projects now, you can probably structure it as a retainer.

The key is shifting from a project mentality to a partnership mentality. You’re not just completing a task and moving on. You’re an ongoing resource they can rely on.

You can structure retainers different ways. Hours-based (10 hours per month at a set rate). Deliverable-based (4 blog posts plus 12 social posts per month). Outcome-based (SEO package targeting specific results). Or access-based (unlimited email support plus two calls per month).

Pricing typically runs $1,000-$10,000 per month depending on the service and the market. The higher end is usually strategic work or specialized expertise.

The big challenge: You can only serve so many retainer clients personally. If each client needs 10 hours per month and you can work 40 billable hours per week, you max out at 16-20 clients. That’s your ceiling unless you hire a team. But even with that limitation, the benefits are massive.

You get a predictable workload instead of feast or famine. You build deeper client relationships and get better results because you’re not constantly context-switching. You generate higher total revenue per client over time. And you spend way less time selling because you’re not constantly pitching new projects.

If you’re currently doing project work, start converting your best clients to retainers. The objection you’ll hear is “I don’t have ongoing work for you.” Your job is to show them why ongoing work creates better results than one-off projects. Demonstrate the value of consistency, of having someone who knows their business deeply, of not having to re-onboard someone every time they need help.

Model 5: Licensing and Royalty Arrangements

This is the true passive income model. Create once, license repeatedly. Others use your intellectual property and pay you for the privilege.

Who this fits: Creators, inventors, trainers, curriculum developers. Anyone who’s built something valuable that others want to use.

Examples include training programs licensed to other coaches, photography or design assets licensed to multiple clients, course curriculum licensed to institutions, brand partnerships and sponsored content deals, or software licensed to enterprises.

The structure usually involves either a one-time licensing fee plus ongoing royalties, a pure percentage of revenue or sales, or a fixed monthly or annual licensing fee.

The benefits are obvious. It’s truly scalable because your time investment is front-loaded. Others do the marketing and selling. You can generate multiple revenue streams from a single creation. But the challenges are real too.

You need valuable IP worth licensing in the first place. The contracts and agreements can get complex. You lose some control over how your content is delivered, which creates quality concerns. And you need to actually enforce and protect your intellectual property.

If you’re interested in this model, start by identifying what you’ve created that others want to use. Maybe you’ve built a training program that other coaches keep asking about. Maybe you’ve created templates or frameworks that could work across multiple businesses. Start with one licensing arrangement to learn the process, then scale from there.

Finding YOUR Model: The Decision Framework

Okay, so you’ve seen the five main models. Now comes the hard part: choosing which one actually fits you. This isn’t about what sounds coolest or what your favorite guru is doing. It’s about honest self-assessment.

Start with these questions:

• Do you prefer working with people or building systems? If you light up in client meetings and get energized by relationships, lean toward retainers or community memberships. If you prefer heads-down building time, look at SaaS or subscription products.
• Do you want scalability or sustainability? Scalability means massive growth potential but often lower margins and more complexity. Sustainability means solid, predictable income with less pressure to 10x every year. Neither is wrong, but they lead to different models.
• What’s your risk tolerance? SaaS and subscription products often require more upfront investment before you see returns. Service retainers can generate cash immediately. Licensing might take months or years to negotiate.
• How much capital do you have to invest upfront? Some models are bootstrappable, others need funding. Be realistic about what you can afford to build.
• What timeline are you working with? If you need revenue in 30 days, certain models are off the table. If you can invest a year in building, others become viable.

Match your strengths: If you love teaching, look at memberships or licensing your curriculum. If you love building things, explore SaaS or subscription products. If you thrive on deep client relationships, service retainers might be your sweet spot. If you’ve already created valuable intellectual property, licensing could unlock passive income. If you already have products people buy repeatedly, a subscription model might be one pivot away.

Then validate with your market. Does your target market already pay for recurring solutions? What’s the competitive landscape? Is the problem you solve ongoing or one-time? Can your customers actually afford recurring payments? These aren’t small questions.

And here’s something most people don’t consider: you don’t have to pick just one. Many successful businesses use multiple models simultaneously. A coach might offer one-on-one retainers for premium clients, a group membership for people who can’t afford high-touch service, and license their curriculum to other coaches. But the key word is simultaneously. Don’t try to launch everything at once. Pick one, nail it, then layer others on top.

My Own Journey Into Recurring Revenue

Speaking of choosing models, I want to share what I’m doing. As we head into the new year, I’m building two different recurring revenue streams, and they’re perfect examples of how different models can work together.

First, there’s Creative QR Designs. That’s my QR code business. We all know what QR codes are right? Well, my business is bringing it up a notch by using AI to create them and providing analytics as to how they are scanned. Go check it out, let me know what you think.

This business is essentially a SaaS model with some service elements. brick-and-mortar businesses as well as online businesses subscribe monthly to create and manage custom QR codes for their businesses. It’s recurring because the problem is ongoing. Menus for restaurants change, specials rotate, QR codes need updating. The value compounds because they’re not just paying for the tool, they’re paying for the ability to make instant updates without reprinting anything.

Second, I’m also working with the Internet Profits Academy, which is more of a membership & educational model focused on teaching people how to build recurring revenue businesses online. Different model, different audience, but both built on that same foundation we talked about in Week 1: predictable, compounding revenue.

Why am I mentioning this? Because I want you to see that this isn’t theoretical. I’m not just writing about recurring revenue models, I’m actively building them. And I’m choosing models that fit my strengths and my market. You should too.

[I’ll be sharing more about both of these as they develop, with links and lessons learned along the way.]

Where We Go From Here

Look, there’s no perfect model. There’s only the right model for you, right now. The one that aligns with your strengths and serves your market’s actual needs.

And here’s the good news: you’re not locked in forever. Models can evolve. You can start with service retainers and transition to a membership as you systematize your knowledge. You can build a SaaS and add a community component. You can launch a subscription box and later license your framework to others.

The key is to start. Pick one model. Build it. Make it work. Then decide if you want to layer on others.

Next week, we’re going to talk about the thing that most people get wrong. See, getting customers is only step one. The real game – where recurring businesses actually live or die – is retention. We’re going to dive into why customers leave, and more importantly, the specific strategies that keep them paying month after month after month.

Because all the models in the world don’t matter if people cancel after 30 days.

Your Assignment

Before next week, I want you to do something uncomfortable. Choose your top two models from this article and write down why each does or doesn’t fit your business. Be brutally honest.

Not “this sounds cool” or “I heard someone made millions doing this.” I want you to assess whether it matches your strengths, your market, and your resources. Write down the good and the bad. The excitement and the fears.

Because clarity on what fits you is the first step to building something that actually works.

See you next week.

Like what you’re reading or have any questions? Don’t be shy, write it up in the comments section for me to reply and more importantly, don’t forget to subscribe to my blog for continuous insights and tips.

Trust the journey – victories await along the way!