5 Simple Ways to Build Monthly Recurring Revenue (Even If You’re Just Starting Out)

Monthly recurring revenue (MRR) is the single most important metric for any subscription or membership business — it tells you exactly how much predictable income you can count on each month. If you’re building a digital product, membership site, or service business, understanding and growing your MRR is the clearest path to sustainable revenue.

With that said, let us delve deeper into understanding MRR better, as well as walk you through predictable ways of building a healthy MRR and growing your business.

What is MRR Exactly and Why Is It Valuable?

MRR or Monthly Recurring Revenue, is a foundational metric for any subscription or membership business relying on recurring sales. In simple terms, the combined total of the monthly recurring sales being generated from your existing customers is your Monthly Recurring Revenue.

Here are a few reasons why it’s extremely important for every business to keep track of the MRR.

• The MRR clearly reveals where your business is heading as it reflects reliable, dependable revenue coming in on a monthly basis;
• It gives you a lot of insights into what things you need to fix before it’s too late, including factors like the churn rate, MRR contraction, etc.
• It tells you whether you’re losing revenue from existing subscribers through churn rate or downgrades through the difference between your total sales revenue and your MRR;
• It helps you plan your marketing budget better since you can predict the value of your customer acquisition more accurately;
• It helps you improve pretty much every aspect of your business directly or indirectly, like customer retention, content engagement, marketing strategy, launching new products, and so on.

To sum it up, your MRR defines the entire growth trajectory of your business. Now before I show you some tried-and-tested methods to build a healthy MRR, let us quickly understand the MRR calculation method and formula, as well as some other important concepts.

Monthly Recurring Revenue Formula and Calculation

In simple terms, the monthly recurring revenue formula is to just take the average monthly recurring sales revenue and multiply it by the total number of your recurring customers or users.

So, calculating your monthly recurring revenue is pretty straightforward. The monthly recurring revenue formula is:

MRR = Average Revenue Per User (ARPU) × Total Number of Active Subscribers

For example, if your average plan costs $75/month and you have 200 active subscribers, your MRR calculation looks like this: $75 × 200 = $15,000 MRR.

Note: exclude one-time fees, setup charges, and non-recurring payments from this calculation — only count predictable, recurring revenue.

This is the revenue that’s coming in for your business every month from your recurring customers.

Then there are some other concepts too that you should be aware of.

• Churn rate: The amount of recurring customer revenue or recurring paying customers you lose every month;
• MRR expansion: The net increase in your MRR value on a month-on-month basis through new customer additions and subscription upgrades;
• MRR contraction: The net decrease in your MRR value on a month-on-month basis through losing recurring customers and subscription downgrades;
• Customer acquisition cost: This is the amount you spend to get new customers who purchase any of your recurring products.

How to Build a Healthy Monthly Recurring Revenue?

There are many different ways through which you build a stable and growing MRR. Let us discuss them in detail below.

Launch a Membership Business

Building a membership business is a great option for premium content creators. Whether you’re a great singer and can teach singing to others, a skilled trader who can coach other aspiring traders, or are an expert in any particular niche and can teach their knowledge to others too, selling memberships will allow you to have a stable, growing income through a reliable MRR inflow.

This model is extremely scalable since once you have a reliable technical platform, you can grow multifold without any significant increase in effort on your part.

Sell Digital Subscription Products

Selling subscription or digital products is an industry that’s growing incredibly fast. In fact, it’s expected that the digital product industry is expected to grow at a staggering CAGR of over 26% annually for the foreseeable future.

This is another highly scalable business model. With the advancements in AI, you have an even bigger number of opportunities.

Imagine building something as simple as a basic AI tool that lets YouTube content creators create engaging thumbnails for their videos and charging them a mere $19 per month as a subscription charge. Since the demand is huge, assume that you manage to get around 2000 paying users, and you could be looking at an MRR of $38,000 before you even know it!

Build a Premium Online Community

There’s a wide range of niches where users want to connect with others in their industry, learn from the more experienced ones, as well as have access to resources created by an expert. If you think you can tick all the checkboxes here, then building a premium online community can be a great way to reach a respectable MRR.

However, you must note here that building a premium online community is something that takes its own sweet time. You can speed things up by promoting yourself aggressively on social media, or the platforms where your target audience hangs out, but the real and sustainable growth will come from word of mouth and organically through the search engines.

And for both of these methods to work out, you need a good base to work with, which takes a fair bit of time. That said, once an online community has grown to the point where it shows up in the search engines frequently for targeted queries as well as is recommended by users on the internet, it can become one of the few ways to have a growing MRR business as passively as possible.

Offer Recurring Services

If you’re a small business or are looking to turn into an entrepreneur from a freelancer, offering a service is precisely the best way to easily go from ground zero to at least a few thousand dollars in MRR.

In most of the industries like digital marketing, accountancy services, graphic designing, software development, website creation, and so on, all you will need is a few retainer clients to rake up an MRR well into thousands.

Most service-based businesses in these industries work with B2B clients rather than B2C customers — and that changes the numbers dramatically. A single retainer client paying $500–$5,000/month can move your MRR needle in a way that dozens of low-ticket B2C subscribers can’t.

Create a Gated Content Website

Gated content is basically premium content in the form of text, video, or presentations that is protected behind a paywall. In other words, users are often shown a part of that content but to gain full access to it, they have to pay a recurring fee for as long as they want to continue to access the content.

Of course, this kind of model works when you have a lot to offer in terms of fresh content, new ideas, latest resources, and in niches where things keep getting updated frequently and users would be willing to pay to stay on top of it.

Think programming languages, Android and iOS updates, specific marketing channels, and more.

How to Set Up Your Monthly Recurring Revenue Generating Business Online?

Once you’ve decided which model fits your goals, the next challenge is the technical setup. Most creators and entrepreneurs aren’t developers — and they shouldn’t have to be. That’s exactly why we built Paid Member Subscriptions: to handle the recurring payments, content gating, and membership management so you can focus on delivering value to your audience.

WordPress is a platform that helps you build different types of websites without much technical knowledge. And Paid Member Subscriptions is one of the best membership site plugins that can help you execute almost any type of business idea that works on a Monthly Recurring Revenue model.

Why Paid Member Subscriptions for an MRR-based Business?

You might be a content creator, an online coach, a small-time entrepreneur, or a freelancer looking to take your business to the next level. And you’re very good at that.

But you don’t have the required technical expertise to set up a platform that allows you to easily sell recurring products and services to your customers. Paid Member Subscriptions is a WordPress plugin that fills that gap.

You can set up a fully functional membership website using Paid Member Subscriptions without having to do any coding. You can sell subscriptions easily and accept recurring payments without any hassle.

Paid Member Subscriptions also allows you to “lock” your content that only becomes available when users opt in for a monthly payment, just like I described in the gated content section.

You can do pretty much everything that has to do with memberships, subscriptions, accepting recurring payments, managing premium content, and so on. And you don’t need any technical knowledge to do any of it.

Frequently Asked Questions About Monthly Recurring Revenue

What is monthly recurring revenue (MRR)?

Monthly recurring revenue (MRR) is the total predictable revenue a subscription or membership business earns from active subscribers in a given month. It only includes recurring charges — not one-time fees, setup costs, or non-recurring payments.

How do you calculate monthly recurring revenue?

The monthly recurring revenue formula is simple: multiply your Average Revenue Per User (ARPU) by your total number of active subscribers. For example, if you charge $75/month and have 200 subscribers, your MRR calculation gives you $15,000.

What should be excluded from an MRR calculation?

When you calculate MRR, exclude any one-time payments such as setup fees, onboarding charges, annual plan discounts (unless normalized to a monthly value), and refunds. Only count the predictable, recurring portion of your revenue.

What is a good MRR for a new subscription business?

There is no universal benchmark, but many new membership or subscription businesses aim to reach $1,000–$10,000 MRR within their first 12 months. The more important metric early on is consistent month-over-month MRR growth rather than the absolute number.

What is the difference between MRR and ARR?

MRR measures your recurring revenue on a monthly basis, while ARR (Annual Recurring Revenue) measures it on a yearly basis. ARR is simply your MRR multiplied by 12. MRR is more useful for tracking short-term trends, while ARR is often used when reporting to investors or planning annual budgets.

What causes MRR to decrease?

MRR decreases through two main causes: churn (subscribers canceling their plans) and contraction (subscribers downgrading to a lower-priced plan). Tracking both separately helps you identify whether your pricing, product value, or retention strategy needs attention.

Can WordPress be used to build a monthly recurring revenue business?

Yes. With the right plugin, WordPress is one of the most flexible and cost-effective platforms for building an MRR-based business. Paid Member Subscriptions, for example, lets you sell subscription plans, accept recurring payments, and gate content — all without writing a single line of code.

Get That MRR Up Today!

Monthly Recurring Revenue is a powerful idea and concept that can set you on the path of incredible growth through a snowball effect. But you need a stable platform to function as your technical partner. And Paid Member Subscriptions is designed to be exactly that!

You will easily be able to set up any type of membership or subscription business with ease. Accept recurring payments through popular payment gateways seamlessly.

You won’t have to worry about anything other than offering the right products or services to your users or customers.

So if you’re looking to start a digital business focusing on the MRR model, then now is the time to do it with Paid Member Subscriptions.

Ready to start building your monthly recurring revenue? Paid Member Subscriptions makes it straightforward to launch a membership or subscription business on WordPress — no coding required. Drop any questions in the comments below.