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May 6, 2024

3 Steps to Build RMR without Drastically Changing Your Business


Over the past couple of weeks, I’ve had the pleasure of spending a lot of time with the NSCA team and some of their members. What stands out the most to me is that NSCA members are unlike a lot of other companies GreatAmerica works with.

GreatAmerica started financing copiers 25 years ago, but has expanded to include telecommunications and IT over the years. The most successful companies in these industries have built a recurring revenue service model to balance out product sales.

Without question, recurring revenue makes today’s technology businesses more valuable. Your clients now consume more products and services through monthly payments than with cash.

Here are a few examples:

  • Business phones
  • Copiers
  • Data-management platforms
  • Data networking
  • Janitorial services
  • Lawn care
  • Servers
  • Snow removal
  • Web conferencing services

What we’re learning is that, many times, AV is being sold as a project without any recurring charges. (To be honest, this is where our telecommunications business was about 10 years ago.) The good news is that many of the telecommunications companies made the shift, and so can you.

The secret to building a recurring monthly revenue (RMR) stream is revealed through three steps:

  • Price out a monthly payment option for the AV project. Include the hardware, software, project costs, and the first year of maintenance. A five-year (60-month) finance agreement is a great place to start.
  • Take your maintenance contract for years 2, 3, 4, and 5, add the costs together, and divide by 60. This is now your RMR.
  • Add the monthly finance payment to the four years of RMR for the grand monthly total.

This is process is simplified with GreatAmerica AV AMP. You have a five-year total solution to propose to the client with a recurring revenue component.

So, how does the process work with GreatAmerica? We pay you upfront for everything included in the rental agreement (see Step 1 above). Every month, when the customer pays their invoice, we pay you the professional services portion of the invoice.

In this scenario, your cash flow won’t look too different from cash sales: You realize the full cost of the project upfront. The bonus is that you start building in recurring revenue on professional services you might not otherwise be able to sell.

Adapting your sales to include more recurring revenue can seem overwhelming, but with a simplified approach and some expert guidance (ask us!), you can build business value with recurring monthly revenue.

Need some help building out a proposal for this type of offering? Download this quoting best practices e-book for some ideas on creating a proposal your clients can’t say “no” to.  -Chad Sowers, Business Development Director at GreatAmerica

Chad Sowers is a business development director focused on bringing value to systems integrators and AV providers. During his 10 years at GreatAmerica, he has educated hundreds of companies on the benefits of financing for their customers and helped them adopt an as-a-Service model. Before joining GreatAmerica, Chad served as the senior manager of education programs for NSCA. 

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