How much of next year's revenue is already agreed?
The share of revenue that comes from contracts, retainers or subscriptions rather than one-off work. The higher it is, the more predictable the business, and the more it is worth.
Get a finance reviewRecurring revenue ÷ Total revenue × 100
Above 70% is typical for managed services and SaaS. For project-based practices, moving from near zero to 20% or 30% makes a meaningful difference to resilience.
Revenue from recurring arrangements, such as monthly retainers, managed service agreements, subscriptions and maintenance contracts, as a percentage of total revenue. It is usually measured over the last twelve months and as a monthly run rate.
Recurring revenue makes planning easier, reduces the pressure to keep winning new work and smooths cash flow. It also has a large effect on value: buyers and lenders typically pay more for predictable income than for the same amount of project revenue. For project-based businesses, even a modest recurring element, such as retained advice or maintenance, can make the business noticeably more resilient.
Only count revenue that is genuinely committed, not repeat work that clients could stop at any time without notice. Track contract terms and renewal dates alongside the percentage. Watch the quality of recurring revenue as well as its size: a retainer that is always renegotiated downwards is less valuable than it looks.
Most owner-managed businesses don't, or they work it out in a way that flatters the result. We'll calculate it from your own numbers and show you what it's telling you.
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