Beyond relationships and loyal customers spending time and dollars at your salon or spa, businesses with recurring revenue are typically valued higher
This is because subscription or membership model businesses are often assessed based on annual recurring revenue (ARR) which provides a very clear projection of the year’s revenue. So, if you have an established base of 500 members who have been with you for two years, it’s pretty fair to say that’s going to be a very reliable source of income for your business for the year. This is promising for your growth and can be used as one way to determine the health of your business
. It can be particularly beneficial if you want to get a business loan, seek investor funding, or plan to sell the business.