Warning! Be careful of Transactional Businesses and How to Incorporate a Continuity of Income Model into Your Business

When I got out of college, I went into mortgage banking. Things were great and I was making a lot of money.  

One day my mom referred a financial planner to me. After the planner realized I was doing everything right (except my profession at the time – mortgage banking) the only thing she shared with me was an offer to get in the business, which at the time, I refused. I was doing great, right! 

Then, interest rates went up and the bottom got pulled out from under me. Let me share with you, starving stinks! 

I considered a lot of options. One of them was insurance sales, another was investment & financial planning. These careers and businesses offer one form of continuity of income. Start small and build. That’s what I did. The first few years were brutal, bad mentors didn’t help. But after working smart and hard, getting the right mentors and a few lucky breaks, business was building, and life is good. 

As I learned later, there are a lot of different types of continuity of income models out there that offer consistent recurring predictable income from a membership or subscription model. And almost any business or idea can be turned into one or another form of membership or subscription models that create reliable continuity of income. 

 

Welcome to LifeByDesign360’s Thoroughly Business Thursday edition, where we show you how to create an income you can’t get fired from with predictable monthly income that grows. I’m your host Doug Reed and today I’m going to show you without a doubt why having some form of income continuity like memberships or subscriptions are paramount to your future success. 

Why should you aim for consistent, recurring revenue, and why might purely transactional businesses not be the best fit for financial stability?  

Today we’ll explore the benefits, drawbacks, and real-world examples of both approaches, as well as their broader economic ramifications.  

At the end of today’s podcast, I’m going to show you how to get your FREE, 9 Point Reinvention Kickoff Blueprint. Eliminate stress and anger from a layoff or being in the wrong job or career and create a blueprint to a business you love with reliable monthly income and the fastest path possible to retirement and real financial freedom. 

That my friends, is what we’re all about here at LifeByDesign360. Low stress and a happy life you can be build that gives you, your family and others you care about the peace of mind to live life the way you truly want. 

Let’s dive in! 

 

What is a Continuity of Income Model?

A continuity of income model is all about generating predictable, recurring revenue streams. This approach creates stability in your cash flow and reduces the constant pressure to find new customers. Examples of continuity income models include: 

• Memberships: Gyms, online communities, or professional associations where customers pay a recurring fee. 

• Subscriptions: Services like Netflix, Spotify, meal kits, or software-as-a-service (SaaS) platforms. These are the more well-known examples, but the possibilities are limitless. 

• Maintenance Plans: Home services or IT support businesses that charge a monthly or annual fee. 

• Retainers: Freelancers or agencies offering ongoing services for a set fee each month. 

• Insurance sales: Continuous payments of insurance premiums provide income and commissions to insurance companies, agencies and agents. 

• Financial Planning and Investment Management: Work with clients on their financial future and or provide investment management on a continuous basis. Charge monthly or quarterly fees. 

Even Amazon, the largest online retailer, was losing billions until its Prime membership was created. Now it’s a force to be reckoned with. 

These models allow businesses to build strong relationships with customers, fostering loyalty and long-term value. 

 

Why Transactional Businesses Can Be Risky

Transactional businesses rely on one-time sales, meaning revenue is unpredictable and often dependent on constant new customer acquisition. Examples of transactional businesses include: 

• Real Estate and Auto Sales: Income is earned through commissions on transactions, which are irregular and market dependent. 

• Mortgage Loan Officers: Commissions are earned per loan, with income tied to fluctuating market demand. 

• Mergers and Acquisitions: Deals can take months or years to close, with revenue coming in large but infrequent chunks. 

While transactional businesses can yield significant income in the short term, they’re highly volatile and can lead to financial stress during slow periods. This affects not only the salesperson, but layoffs are more likely for the entire company in tough times. 

 

The Economic Ramifications of Transactional vs. Continuity Models 

Financial Stability
Continuity models provide a safety net. Predictable cash flow allows business owners to plan for expenses, invest in growth, and build reserves for economic downturns.  

In contrast, transactional models are susceptible to market cycles and economic shocks. For example, a real estate agent’s income may plummet during a housing market downturn, while a subscription-based business like Netflix continues earning from its existing customer base. 

Customer Behavior
Recurring revenue models incentivize businesses to maintain high customer satisfaction and engagement, leading to long-term loyalty.  

Transactional businesses, on the other hand, often focus on maximizing individual sales, sometimes at the expense of building lasting relationships. 

Scalability and Growth
Continuity income models tend to scale more predictably. Once established, adding new customers to a membership or subscription service often has minimal incremental cost, boosting profit margins. Transactional businesses must constantly find and close new deals, which requires sustained marketing and sales efforts. 

 

Examples and Success Stories

Let’s look at some real-world examples: 

• Dollar Shave Club: They disrupted the razor market with a subscription model, generating steady monthly income. 

• Patreon: Creators earn recurring revenue from fans who pay monthly for exclusive content. 

• SaaS Companies: Tools like Dropbox and Canva charge ongoing fees for access, ensuring consistent revenue. 

• Fitness Apps: Platforms like Peloton combine equipment sales with subscription-based classes, blending both continuity and transactional models. 

In contrast, consider real estate agents or loan officers who must constantly chase new deals. During slow market periods, income can dry up, creating uncertainty and stress. Over time, this volatility can make it difficult to maintain financial stability and plan for long-term goals. 

 

Transitioning to a Continuity Model

If you’re in a transactional business, consider how you can incorporate continuity income streams: 

• Real estate agents could offer property management services for ongoing fees. Then transitioning to rental real estate ownership, which is also a pathway to retirement. 

• Mortgage professionals might provide financial consulting or credit monitoring subscriptions. 

• Freelancers could create online courses or memberships for their expertise. 

The key is to identify a recurring need within your target market and build a solution around it. 

 

Incorporating a continuity of income model isn’t just about financial security—it’s about building a business that works for you. By focusing on recurring revenue, you can create stability, foster loyalty, and reduce stress.  

The economic advantages of this model are completely clear: predictable income, better scalability, and resilience during economic uncertainty.  

This isn’t just about business. This is about building the amazing life that you really want.  

 

Just like I promised – Here is how to get your Free 9 Point Reinvention Blueprint: 

This guide will help you: 

Completely and totally eliminate stress, anger and the volatility of a job loss and financial uncertainty. 

Create the fastest Blueprint possible to get the job you need now and build a bridge to an income you can’t ever get fired from with a business that gives you reliable monthly income that grows to whatever amount you choose. 

It will also help you integrate the plan for retirement into your business so you can enjoy real financial freedom and peace of mind faster and better so you can  take care of yourself and your family and be able to live life on your terms, not somebody else’s.  

It’s the best way to create and enjoy lasting financial freedom in the fastest and securest way possible based on your personal situation. 

Go to: go.lifebydesign360.com/9-point 

You are not alone.
You are not behind.
You are on the edge of reinvention. 

And this is the year you rise! 

Be sure to get your guide at: go.lifebydesign360.com/9-point, now so you can fast track your comeback story. 

 Tomorrow, I’m going to share with you stories of others that actually did it. Started small, created awesome businesses and are now financially free. You don’t want to miss it. 

 Thanks for listening to LifeByDesign360. If you found this episode valuable, please subscribe and be absolutely sure to share it with a friend.  

 Until next time, keep building smarter, more sustainable businesses.