Monday, June 8, 2009

All Money's Not Created Equal

I've always thought money is money, and more money is better then less. However I'm finding that I'd rather have less money, more often.

This all stems from my business slowly getting moving. I have roughly a thousand dollars of contract income that I'm working to secure. Contract income is great, it's a lump sum, paid at once, and I do the work and life is good. However, the issue is that unless I secure another contract that income is all I get. If I make a thousand dollars, once, that's it. I need to go out and look for more contracts, more income, and that takes time, and effort, and a lot of repetitive work.

In short, it's less profitable in the long run because I have to put more effort into each contract.

On the other end of the spectrum is recurrent income. This is what I want more of, and for the life of me can't seem to get. This income comes from people licensing my software, buying hosting, etc. This is better for me because it's a lower cost per sale. I convince a person to license my software for $25 a month, or $50, or a $100 a month. They pay monthly, or the year up front, but the important factor is that it's recurring. Even if they pay the year in advance I know barring something going wrong I have that same payment to look forward to a year from now.

The issue of course is it requires a customer to buy in, to commit to purchasing a service and the associated cost. I've yet to find someone willing to do that. I've got two business's in the works but nobody has signed anything official.

I'm moving forward, and it's a good feeling, hopefully this is the start of something quite profitable.

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