Why is recurring revenue so powerful? Having long-term customers, predictability, cash flow, and higher company valuations can appeal to business owners and executives. According to the IDC 2014 research, cloud-oriented partners reported achieving more than 1.6 times the recurring revenue than other partners*.
*IDC. Successful Cloud Partners 2.0. 2014
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Consider ways to turn traditionally one-off sales into recurring contracts. Any type of subscription or monthly offering can become contractually recurring revenue.
Venture capitalists and the stock market are likely to place higher value on a company with strong recurring revenue. While IP can warrant a large multiplier depending on what it is, recurring revenue is a solid path to obtaining a higher valuation and stability for your company.