• Fred Silberstein

How to Create Recurring Revenue for Your Plumbing or HVAC Business

Creating streams of recurring revenue can help boost the value of your business, which is important for business owners who thinking about selling their businesses.



Running a successful HVAC or plumbing business requires hard work, patience, and resilience. You need the right skills and business acumen to maximize your profits and create value. The recurring revenue model is one strategy you can adopt to reliably grow your business and stay afloat during difficult times.

Since recurring revenue comes with a high degree of certainty, your business can predict the revenue it might gain or lose in a month. It also gives you an idea of the number of new subscriptions you can expect from the data insights you collect. That said, adopting the recurring revenue model is not a walk in the park. You will need to reinvent part of your business approach and many techniques.

Why is recurring revenue great? Simply defined, recurring revenue is a business model that allows companies to offer products and services at regular intervals for regular payments from their clients. This model ensures that your organization has a stable, predictable, and regular payment schedule that you can rely on with a high degree of certainty.

HVAC businesses can also adopt this model by offering products or services that are paid in intervals rather than on delivery.

There are plenty of reasons why you need recurring revenue in your HVAC business. However, these are the top three benefits.

  1. Scalability: As highlighted above, recurring revenue make cash flow more predictable and allows you to scale more easily. The deeper insights you gain about recurring customers also allows for better decision-making, which will expand your customer base in the long run as you find ways to improve your offerings.

  2. Investor appeal: Recurring revenue can boost a company’s valuation, which is attractive to venture capitalists and private equity investors. The predictability of recurring revenue helps you manage your finances accurately, something that any investor will need to see before acquiring your firm. With recurring revenue in place, investors know they can count on the revenue you are currently generating to continue after they take over the business.

  3. Enhanced customer relationships: Having a one-time payment model will provide you with some income, but you will always have to ensure you have repeated sales. This is where the recurring revenue model comes in. This approach enables you to develop deeper relationships and retain loyal customers.

3 recurring revenue ideas for your HVAC business The HVAC industry may not seem like it is suitable for a recurring revenue approach, but this could not be further from the truth. You can also adopt different strategies that give you the predictability and scalability of businesses with recurring revenue models. Here are three ideas to help you figure out how to use this approach.

1. Introduce product or service subscriptions The subscription model allows your customers to pay a regular fee to access your products, which allows you to earn recurring revenue. With this arrangement, your clients pay for your services or products on a set schedule, such as monthly, quarterly, or even annually.

With the subscription model, you can predict your revenue accurately based on the number of subscribers you have. This means that you and your HVAC business will not have to worry about where you will make this month’s overhead. Based on the number of subscriptions, you can easily calculate MRR (monthly recurring revenue), which is a great tool for company valuation.

By charging clients periodically, you also spread the cost of using your service. And affordable prices are less intimidating for customers.

The product or service subscription model also focuses on providing steady value for clients over a long period. As long as your customers keep receiving products or services that meet their needs, most will remain loyal and continue paying for the subscription.

2. Create retainer plans Retainer plans allow you to introduce your clients to ongoing paid plans instead of one-off package payments. This way, you will earn more revenue, without forcing people to buy again. Customers tend to receive discounted prices on products or services on retainer plans.

For example, when a client buys bathroom faucets, you know they will need regular repair and maintenance. So, instead of giving them a new quote every time they purchase, why not offer to cover each quarter?

Alternatively, offer supplemental services to boost your recurring income. Diversification of products and services can help build a large customer base and increase value. What do your customers require most? Do you have a plan that will save them money and time, and earn you regular income? Then share it with them.

3. Start a membership program A membership plan allows customers to sign up for services created in a membership site. If you are offering such a plan, you can take the chance to build a community, deliver services, and offer consulting for a fee.

Clients value information! You can easily coach your customers on how to maintain their plumbing assets at home. Remember to be patient when answering their queries, and they will always pay for the membership fees.

This is a great idea for increasing your customer base and creating recurring revenue for your plumbing business. Membership programs can take various forms, from creating valuable resources to coaching or even offering maintenance and repairs.

SF&P Advisors can help you create a recurring revenue model for your HVAC or plumbing business HVAC businesses offer their clients essential services all through the year. This means that your business can also take advantage of the recurring revenue model and enjoy the benefits that come with it. SF&P Advisors have business model experts who can help you restructure your business model. Contact us today for a quick consultation.