This episode of Emerge Dynamics is a continuation of our series about understanding how much your business is really worth. This time, we’re discussing recurring revenue and monopoly control. Recurring revenue and monopoly control are drivers of your business valuation just like Switzerland and hub and spoke, as discussed in the previous episode.

First and foremost, it’s important to drive home the point of removing yourself from the day-to-day tasks and work on your business. Your time should be spent building processes, supporting your team, and inspiring your team. It is risky to build a business that relies on you working in it instead of on building it.

Recurring revenue is tied to both your financial performance and your growth rate. Recurring revenue takes into account the likelihood that the money coming into your business will continue. The recurring revenue your business generates may differ depending on your business model. For example, businesses with subscriptions tend to have solid recurring revenue.

There are different levels of monopoly control. The more your business has a compelling differentiated value proposition, the more customers will view you as the only option for attaining your incredible product or service. Knowing why your customers buy from you as opposed to your competitors helps you gain higher control.

When you go to the grocery store, you’ll come across items that are essentially the same—for example different brands of the same beverage. What you spend your money on is swayed by the marketing. Just like your customers, you’re buying based on the experience you’re getting from purchasing the product, and not just the product itself.