How To Start A Home Business Without A Product Or Service
July 31, 2021
7 minutes to read
Opinions expressed by Contractor the contributors are theirs.
Choosing the right model is a key moment in starting an online business. Such an imagined business can sell goods or services, or a combination of both. A good example of a goods (or products) business is an e-commerce store that sells clothing or accessories, tangible products that need to be made and shipped to a customer. Examples of a service-oriented model might be coaching, consulting, digital marketing, or a professional services firm that offers specialized business, legal, tax, or medical services – provided the value is intangible in nature and usually involves the transfer of knowledge or expertise.
Service-oriented businesses can be categorized as âlow ticketâ or âhigh ticketâ. The former are those in which the services are valued at $ 2,000 or less, the latter those that sell for more than $ 2,000. Starting an expensive service-oriented business usually involves a slightly steeper learning curve, as the service rendered involves a transfer of specialized knowledge, talent, skills, or ideas. An entrepreneur who starts one has a professional title and / or has advice and knowledge acquired through his experience.
An alternative to starting a high-priced service-oriented business without earning a professional designation or investing time and money to gain experience in a specific industry is to adopt a commission-based model or referrals, which is simple: A commission is earned when you negotiate a deal between a service provider and their customer.
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Let’s go over the steps required to form one:
1. Understand the model
The appeal of this build is that it doesn’t require you to create your own expensive services; your business is the middle part that connects buyers and sellers. You earn a commission for facilitating a transaction. In a single iteration, you will have to partner with expensive service providers who are willing to pay a commission to introduce them to a client. In the other, you find the ideal clients of the provider and facilitate the transaction. Essentially, you are the middleman between the buyer and the provider of expensive services.
2. Find and partner with high-priced sellers
In order to facilitate a transaction between a buyer and a seller, you must first identify and partner with expensive service providers who would be willing to pay a commission or referral fee for every customer generated as a result of your efforts. Let’s take an example to better understand how this process works.
â¢ Identify an expensive service that has high market demand and solves a major problem in the market. As an example, we will select digital marketing and advertising services for solo and small law firm owners. These owners are usually not trained in marketing or advertising, but need both strategies in order to share their expertise with more people and get more customers.
If you search on Google for the phrase “digital marketing services for law firms” you will come across several marketing companies specializing in this niche. You can also search on Facebook or LinkedIn to find many more service providers in this space.
â¢ Visit a service provider’s website to understand what they have to offer, view testimonials from past clients, and identify key decision makers in the business.
â¢ Connect with key decision makers via email, social media, or a phone call, and see if they’re looking for more customers and if they’re willing to pay commission for the customers you refer. A message along these lines could be: âWe are impressed with the services you provide and the testimonials from your clients. We would like to recommend more law firms to you in exchange for a referral commission on a sale. Would you be open to discussing this offer? “
If the business is on a growth path, the answer will most likely be “Yes”. The next step would be to schedule a call with the decision maker and negotiate a reasonable commission or referral fee (these are usually between 10% and 25% of the transaction fee).
â¢ If the negotiation is successful, the last step would be to create a simple contract or agreement to capture the terms of the negotiation and formalize the partnership.
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3. Find and recommend the right customers
The goal here is to find customers who are likely to purchase a service from the provider you have partnered with.
â¢ Ask yourself a few questions: Does the potential customer have the resources to pay for an expensive service? Does this service provider solve a major problem for the business owner? Is it relatively easy to get in touch with this customer?
Let’s stay with the example above. Owners of individual or small law firms will usually have the resources to pay for digital marketing or advertising services and are usually not formally trained in advertising and marketing. It is also generally relatively easy to get in touch with the decision maker.
â¢ Connect with owners of solo and small law firms using Google search, Facebook, LinkedIn, YouTube, Instagram or industry specific platforms. A preliminary review of a potential client’s website would allow you to understand the services offered by the law firm, its ideal clients, and even its current social and digital media presence.
Here is an example of a handy message to use: âWe stumbled upon your website and we love the impact you are having in your community. We work with independent and small law firms looking to expand their digital footprint and offer a range of digital marketing services that can help you acquire more clients online. Would you be interested in discussing our services in a non-binding 10 to 15 minute call? “
The key to success is to put yourself in the shoes of the business owner. The more you understand the pain points they face, the easier it will be to have more focused and conversion-oriented conversations. You can either speak directly to the owner before referring them to the service provider, or set up a conference call with the prospect and the service provider.
â¢ It is practice makes perfect. The more calls you make and the more emails you send, the easier you facilitate these conversations, build trust, and increase the chances of earning referral commissions.
4. Absorb the necessary mathematics
The last step in the process is to create a calculated roadmap to build this high priced SEO based business. For example, if your goal is to earn $ 100,000 per year in this new business, you should earn approximately $ 1,923 per week. If you facilitate a $ 5,000 sale and earn a 20% commission, that’s $ 1,000 in earnings. You would need two conversions per week to reach your goal. Digging deeper into your work, it’s safe to assume that 20% of those who agree to make a call with you would end up buying a service; you would then need to perform 10 of these phone sessions per week. Digging even deeper, suppose that 20% of people who received an initial outreach message actually booked calls; you would need to send about 50 messages per week, which translates to 10 phone calls, which translates to $ 2,000 per week in earned commissions. If you plan to work five days a week, you need to send 10 messages a day to achieve this goal.
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