MRR (Monthly Recurring Revenue)

Definition

Revenue contracted to repeat monthly, as against project work.

Why It Matters

Recurring revenue survives an ownership transition far better than relationship-won project work, which is why buyers and lenders pay more for a dollar of it than for a dollar of anything else. Test that the contracts behind it are real: month-to-month arrangements a customer can end with an email are recurring in the spreadsheet and optional in practice. Check who can cancel on a change of ownership as well, since that clause turns the most durable revenue on the page into a permission.

In numbers: A pool route billing 900 customers at $150 a month runs $135k of MRR; at the 10x to 12x monthly billing pool routes trade at, the route alone prices between $1.35M and $1.62M.