Building a successful business takes hard work, dedication and passion. If your business is more than just a part-time endeavor but you are finding it hard to juggle the day-to-day operations with all the other things you need to handle, the idea of adding a subscription might seem tempting. However, before signing up new clients and adding subscriptions there are several factors that you should consider – pros and cons of adding a subscription to your existing business.
Subscription businesses are a growing trend and a great opportunity for entrepreneurs. According to a 2017 report, subscriptions accounted for roughly $5.5B in revenue, which is an increase of 9% from 2016. This trend shows no sign of slowing down. The number of companies taking this route continues to rise due to the many benefits that come with running a subscription-based business. One of the most attractive aspects of a subscription-based business is the continuous cash flow or recurring monthly income it creates.
What to consider for a subscription-based business?
It's important to remember that subscriptions are just another tool in your toolbox. However, all tools are not created equal, and this one is best suited for companies that offer products or services that clients use on a regular basis. It's also important to consider whether your clients will have a recurring need for what you offer—if not, they won't stay subscribed. In order to determine whether subscriptions are right for you, you should consider some of the following questions:
- Do you have a product that is in need of regular replenishment? Is there a potential for repeat use?
- Is your product/service one that people would be likely to continue using over time?
- Are there other companies offering subscriptions for similar products? Would they be considered competition, or is there room for more options?
- What would the logistics of implementing this type of business model look like? How much extra work would it require?
You should also consider whether or not you have a team member who could manage subscriptions, and if not will you need to hire someone? It's important to weigh the pros and cons of adding a subscription before diving in. You don't want to add subscriptions to your business half-hazardously. Customers who decide to enroll in a subscription tend to monitor the service or product replenishment closely. If your customers notice that your subscription offering isn't up to par, this can leave a bad taste in their mouth, which you should try to avoid.
