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The razor-and-blades model is one of the oldest tricks in business: sell the razor cheap, sometimes at a loss, because the money was never in the handle. It's in the blades you keep buying, month after month, for years. Printers and ink, consoles and games, coffee machines and their little pods: same trick, different shelf.

When I think about it, it’s kinda the same as the “free text weekends” we use to live off of in the 2000’s.

The first sale gets you a customer. The re-order gets you a business.

Essentially: Find the blade. What’s the reason that makes people continue to need and choose the business?

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For a stream of conscious thought on using outside capital on an acquisition:

Most businesses start every month at zero. The shop opens, the phone rings or it doesn't, and last month's success buys you nothing today. A recurring-revenue business is different: it starts each month with money already coming in.

Customers have signed up to keep paying. Rent rolls, management contracts, maintenance agreements, subscriptions, monitored alarms, serviced equipment. These are the businesses that have easier to predict demand and cash flow. They are worth more than the one-off kind for a simple reason: the income is far more predictable.

The predictability is a claim you have to test, and the single number that tests it is churn - the rate at which those paying customers leave.

A base of 300 paying clients sounds solid until you learn 60 of them walk every year and the business is running up a down escalator.

So the first thing to get is retention over several years: how many customers stay, how long the average one lasts, and what the base looked like three years ago versus today.

Growth on top of low churn compounds beautifully.

Then press on what the recurring revenue actually is, because "recurring" and "contracted" are not the same word. Some recurring income is locked under agreements with notice periods and switching costs. Some of it is simply habit, a customer who has always paid and could leave tomorrow with a phone call. Both have value, but not the same value. So read the contracts: what's the term, what's the notice period, what would it cost or annoy a customer to leave, and how concentrated is the income across the biggest few accounts? The stickier and more spread out the base, the safer the money.

A recurring-revenue business is usually priced on the quality and durability of that income stream, often as a multiple of the recurring base itself rather than a simple profit multiple, precisely because the income is the asset.

So separate the recurring income from any one-off or project revenue mixed in, and be honest about what it costs to keep the base alive: the staff, the systems, the service that stops customers leaving. The recurring line is only worth a premium if it genuinely recurs with modest effort.

A recurring-revenue business is only as good as the customers who don't leave - so buy the retention, not the headline number of clients.

None of this is a reason to shy away from recurring-revenue businesses. They are some of the best things you can own: predictable, financeable, and the closest thing in business to an income that you can predict.

They’re rare and seldom for sale. That’s because they’re valuable.

Short Summary:

300-plus properties under management, strong recurring management-fee income, and an owner return near $400,000 a year. Asking $1,375,000. An established residential property-management business with scale from day one, where the whole value sits in one question: how sticky are those 300 doors?

This is a residential property-management operation in Northland, running under a recognised franchise brand with the portfolio, team and systems already in place rather than a blank territory to build. Management fees on 300-plus properties throw off income that recurs month after month, largely independent of whether anyone's chasing new business that week. The homework is the durability of the rent roll, the franchise terms, and how much of that $400k is really the owner's wage.

It manages 300-plus residential properties across Whangarei and wider Northland as an exclusive franchised territory, with an experienced team handling day-to-day operations and established systems, training and support behind them. The business reports a business-owner return near $400,000 a year on strong recurring management-fee income, with tangible assets included and an optional premises lease available. It's pitched at an owner who wants to lead an established service business, focus on client relationships and keep growing the portfolio, and detailed financials are released to qualified buyers after an NDA.

What I'd Want to Understand:

First is the churn on that rent roll, because it's the whole asset. 300-plus properties is a headline, not a guarantee: I'd want how many properties the business manages now versus one and three years ago, how many landlords leave each year and why, and the average length a property stays on the roll. A rent roll that quietly loses 15% a year and tops up with new wins is a treadmill; one that holds its doors and adds to them is a compounding annuity. The retention number decides which of those I'd be buying.

Second is the franchise deed, because I'd be renting the right to run this. It operates under a franchise brand with franchisor approval required on sale, so I'd read the agreement closely: the royalty and marketing fees that come off the top, the term and renewal, the territory protections, what the franchisor can require me to spend, and the rules and cost of exiting when I eventually sell. The brand and systems are genuine value, but the deed sets how much of that $400k I actually keep and how free I am with the asset.

Third is what that "$400k owner return" really is. A business-owner return typically includes the owner's own labour, so if I want to step back and pay a manager to run it, that wage comes off and the hands-off number is lower. I'd confirm whether the ~$400k is before or after a full management salary and the franchise fees, and whether it's an actual recent result or a blend. At $1,375,000 that's roughly 3.4x the stated return, which is reasonable for sticky recurring income and dear if the income isn't as sticky as it looks.

Fourth is the Northland market and the regulatory load. Property management lives and dies on landlord relationships and on rules: healthy-homes standards, tenancy law, and anything that makes being a landlord harder can shrink the pool of properties to manage. I'd want the concentration across the biggest landlords (one investor with 30 properties leaving hurts), how the local rental market is trending, and how exposed the fees are to regulatory change and to competition from other managers in the region.

Growth Angle: The clearest lever is adding doors to a machine that already works: every new property is almost pure margin on top of an existing team and system, so growth through landlord referrals, local business development and relationship-building drops straight toward the bottom line. For a buyer with people skills or an existing property footprint, the franchise brand, training and exclusive territory are the slow, expensive things already done, leaving the fun part: filling the roll. Scale also makes the recurring income more defensible, since no single landlord can swing it.

The Drawbacks: You're buying the right to operate under someone else's brand, so franchise fees come off every dollar and your freedom to run and sell it is bound by the deed. The return likely includes the owner's labour, so the true passive figure is lower, and the entire value rests on retention you can't see until the financials open. Property management is also people-heavy and regulation-exposed, and a soft Northland rental market or a few departing landlords would be felt directly.

Final Thought: A 300-door rent roll with an experienced team, established systems and recurring management fees is exactly the kind of predictable, financeable, pay-you-while-you-sleep asset worth owning, if the doors stay. The deal turns almost entirely on retention and the franchise terms: prove the roll holds and grows, read the deed, and confirm what's left of the $400k after a manager and the franchise cut. Get those right and 3.4x for durable recurring income is fair. Get them wrong and you've paid an annuity price for a treadmill.

If you want more details on any of these businesses or would like an introduction to the sellers, just reply to this email.

$465,000 back to a working owner, about $415,000 of EBIT if you run it fully managed, revenue up roughly 50% over two years - and an owner who says he spends about two hours a day on it. Asking $920,000. A tidy, systemised little machine in a tourism town, where the whole question is how much of that "two hours a day" is really true.

This is a diversified cleaning business across the Southern Lakes - short-term rental and holiday-home turnovers, Airbnb, builders' and construction cleans, and regular residential and commercial contracts - built on documented systems so it leans on a team rather than the owner. It offers itself three ways: fully managed, part managed, or owner-operator, so you can buy the lifestyle you want. The homework is whether the hands-off numbers hold, and how exposed it is to one tourist town's cycles.

It services repeat residential and commercial clients across a range of cleaning types, with additional complementary services layered in for a second revenue stream, and it's grown revenue by around 50% across the two most recent financial years. The seller reports roughly $465,000 as a return to a working owner and about $415,000 of EBIT under full management, on proven processes designed to run with minimal owner input - averaging around two hours a day. Staff are available through the region's seasonal swings, and the identified growth levers are more commercial clients, active marketing, a scheduling-software upgrade already underway, and expansion into neighbouring towns.

What I'd Want to Understand:

First is whether the "two hours a day" is real. The entire pitch is that this runs without you, so I'd map exactly what the owner still does in those two hours - pricing, the key accounts, quality complaints, rostering, hiring, the bank - and what breaks if they simply stopped. I'd want to see the manager or supervisor structure that supposedly holds it together, because in a hands-off business that person is the business, and I'd want their tenure, their contract and their reason to stay through a sale.

Second is the gap between $465k and $415k. The working-owner return is higher than the fully-managed EBIT, which is exactly right - the difference is roughly the cost of paying someone to do the owner's job. So the honest question is which number I'm buying: if I want it truly passive, ~$415k is the figure, and I'd confirm that already has a full management wage in it rather than a token one. At $920k, that's a bit over 2x a managed EBIT, which is not expensive - if the EBIT is clean.

Third is the tourism and short-term-rental exposure. A big slice of the work - holiday-home turnovers, Airbnb, short-term rental - rides on one region's visitor economy and on the short-term-rental market staying healthy and lightly regulated. I'd want the revenue split across short-term-rental turnover versus regular residential and commercial contracts, how seasonal the cashflow is, and how a downturn in tourism or a tightening of short-term-rental rules would hit it. Repeat business is good; repeat business that depends on Airbnb occupancy is a specific bet.

Fourth is how contracted the recurring work actually is. "Repeat" and "recurring" aren't the same as "contracted." I'd want to know how much revenue sits under ongoing commercial agreements versus turnover work that can dry up or switch cleaners on a whim, how concentrated the client base is, and what those "additional complementary services" are - because a second revenue stream is only a strength if it's durable and not just the owner's side hustle.

Growth Angle: The levers are clear and unglamorous: win more commercial contracts (the stickier, less seasonal half of cleaning), turn on real marketing and social, finish the scheduling-software upgrade to add capacity without adding chaos, and extend the proven system into neighbouring towns. Because the operation is already built to run on process rather than the owner, a buyer with a bit of sales energy - or an existing facilities or property-services business - could bolt this on and push volume through a machine that already works. The 50% growth suggests the demand is there to keep pulling.

The Drawbacks: Cleaning is low-margin and labour-dependent, so staffing and wage pressure are permanent facts of life, and a "managed" business is only as passive as its manager is loyal. The tourism and short-term-rental exposure adds seasonality and a regulatory wildcard, and the 50% growth may partly be a tourism rebound that won't repeat at the same rate. The two headline numbers reward scrutiny: verify the managed EBIT truly carries a full wage, and that the two-hour day isn't three.

Final Thought: A systemised, diversified cleaning business throwing off ~$415k managed on a $920k ask, growing fast and offering you the choice of how hands-on to be, is a genuinely attractive shape - the kind of workable asset that can pay for itself and hand you your time back. It lives or dies on two checks: that the machine really runs without the owner, and that the money isn't riding too hard on one tourist town's Airbnb season. Prove the manager, the wage and the revenue mix, and this is a strong buy. Skip those, and you may have bought yourself a two-hour day that turns into a full-time job.

If you want more details on any of these businesses or would like an introduction to the sellers, just reply to this email.