We’re in the website services business. Customers pay us monthly for our websites which creates a nice recurring revenue stream, but doesn’t give us much cash upfront. We do a charge a one time setup fee but that offsets our hard costs. We’re considering changing our model to one large flat rate upfront with a very small monthly fee for hosting. Any advice?
That is always a tuff call, to take the profit at the start of the project or to make a great profit at the end. Not only is this tuff for you, your customer has the same analysis. I would offer plans that do both, that would give you a mix of the upfront revenue that you need and back end profit that is so nice.