How valuable your business is to a prospective buyer is the extent to which the buyer can see where your sales will come from in the future. A recurring revenue stream means the buyer might not have to inject cash into the business going forward and therefore will pay more for it. Recurring revenue streams therefore increases the value of your business. There are various forms of recurring revenue.
1. Contracts (think wireless phones)
2. Automatic renewal subscriptions (think websites which charge a monthly fee automatically charged at the first of the month)
3. Sunk-money renewal subscriptions (think equipment lease and then subscribe to information to monetize the leased equipment)
4. Renewable Subscriptions (think magazine subscriptions)
5. Consumables (think razor blades)
This is the time of the year to plan for the future. If you can incorporate a recurring revenue stream into your business you can increase its value.