Let’s take a look at how I started an online service website, automated and sold it in less than a year.
I learned why most service businesses fail before they get off the ground and what you can do to make your business run like a well-oiled machine. I tested strategies and, over time, developed a system that put my business on (almost) complete autopilot.
Before even making a website for my service business, I identified, tested, and validated my niche.
- I recommend reading “How I Went From Broke Shoe Salesman to Making $1,000+ per week on Fiverr” to fully understand how I tested the waters for my service business using Fiverr before taking the plunge.
- I’d also recommend reading “The E-Myth Revisited” by Michael Gerber, it will help you start a business that works for you instead of the other way around.
Let’s start by identifying a niche
Operating in a niche lets you be a wizard in that space and dominate the market.
Instead of starting a copy-writing business, I would start a business that writes copy for winter sports companies, for example. At first, I might narrow it down even further to writing specifically for snowboard companies. Why would a winter sports website want to hire a regular old copywriter when they can hire a highly specialized winter sports writer?
Find a niche, then find a niche in that niche.
Your goal is to have your target customer land on your website and feel as though your service was created specifically for them. This doesn’t necessarily mean you have only one specific customer; it can mean you’re providing a highly specialized service. For example, write kick-ass product descriptions and nothing else. If someone needs a blog writer, they can go somewhere else (for now, at least).
In my case, I was operating in the graphic design industry, but my customers weren’t coming to me for brochures, logos, or websites. My niche was Snapchat geofilters.
Side note, Snapchat geo-filters are custom overlays for images taken on Snapchat that are exclusive to specific locations and events. They are unique graphics that add some extra flair to Snaps. They’re similar to digital stickers, except geo-filters are integrated into the Snapchat platform and are unlocked based on location.
You’re probably thinking that focusing on a highly specialized niche is a poor long-term business strategy because you’ll be leaving money on the table. Well, yes, you should make sure you have a clear, long-term road-map for the business to avoid this as you grow.
The goal is to dominate a niche, build an excellent reputation, then add to the services provided. If you think of your business as a tree, then you should plant the seed, establish your roots, grow, and branch out.
Have a long-term vision in mind for your business; don’t make your business name or branding super specific because your goal is to scale later. Amazon started with books, but their domain name isn’t buybooksonline.com.
This is the complete opposite of what I did; I learned this later. My domain name was geo-filter.com for crying out loud! I’m telling you this so you can learn from my mistakes.
Appeal to a niche audience while maintaining scalability and not restricting future growth.
Test and validate your niche
Now that you have a niche (or a few) in mind, it’s time to test.
I listed a gig on Fiverr for creating Snapchat geofilters. I wouldn’t say it was an instant success, but it received more orders than my other listings.
With the availability of websites like Fiverr, GigBucks, Zeerk, and plenty of others, you can test a niche for your service business at no cost at all. Post a listing for your service on any (or all) of these websites and let the market respond.
If you aren’t getting traction, the issue could lie in the quality of your listing. Run tests within your listing as well as testing different niches. Try different images, titles, descriptions, and pricing. If your listing is well done, and no one buys your service, try a different niche. I tested around ten different services/ niches before landing on one that had enough demand to validate a launch.
If orders start coming in and customers are satisfied with your service, you’re ready to launch a website.
I should mention that you can also do testing with different “dummy pages.” This method includes creating a website and running ads to drive traffic. Once a user clicks the “BUY” button, they are directed to a page that says, “Thanks for your interest, we haven’t launched yet!” This will allow you to find out if people are interested in your service (or product) before launching. Read “The 4-Hour Workweek” by Tim Ferriss — he goes in-depth on how he used this method to test the market for his supplement company.
Launch a simple website
After 3-ish months selling on Fiverr, it was clear that there was a demand for my Snapchat geofilter service.
If I wanted to scale and grow the business, I needed a website.
It is incredibly simple to make a website.
I loaded a template on Wix (free), did some drag and drop magic and voila! In a few hours, I had a responsive website that didn’t look like it was made by a 19-year-old who had no idea what he was doing (yes, it did).
I then created a Typeform and added it to the site. Typeform is a brilliant tool that lets me create conversation style forms that seamlessly collected order details from my customers and credit card payments.
I can’t say enough good things about Typeform — I basically ran my entire business with their software.
I created three different pricing options for my service. When a user selected one, they were directed to a Typeform page where they could complete the order.
I provided my service in three options using the good, better, best format so customers could select a package that suits their needs and budget.
The revenue structure that I came up with was based on the testing that I did using gig extras on Fiverr. I provided base packages and implemented an à la carte checkout, allowing customers to select extras for an additional price. Airlines are notorious for using this strategy to turn a $240 fare into $400. Add extra legroom $45, extra luggage weight $60, in-flight meal $20 and flight insurance $15. It works like a charm!
Here’s how I structured pricing (after months of testing)…
A website needs traffic
When starting a website, you’ll inevitably pour time and money into driving traffic to your site. If you haven’t validated your service before starting the website, then you have no idea if the investment is going to pay off or not.
My niche was validated on Fiverr, so I knew that once I launched, people would purchase my service, or at least I hoped they would.
I hired a creative agency to make this explainer video for the launch.
I recommend finding an organic approach to drive traffic rather than paying $.75 per click. But hey, whatever works for you.
Here are some methods and tools I used to get my first customers:
Immediately after launching, I hired an SEO guy. If you’re not familiar, these guys will make sure your website appears in search engines when people search for keywords related to your site. This was, without a doubt, the best investment I ever made in the business. This helped me gain thousands of visitors that were actually searching for my service.
Reddit posts and ads are surprisingly effective. I’ve been a Reddit user for years, so it was only natural for me to want to share my new business with the community. If you’ve never used Reddit before, I would suggest learning how it works and not spam the subs with your website. Chances are there’s an active subreddit for your niche. I asked questions about my business in subreddits like r/entrepreneur and posted my work in r/snapchatgeofilters. I also targeted ads at r/snapchatgeofilters and r/wedding, which surprisingly had up to an 8% click-through ratio!
3. Highly Targeted Facebook Ads
The game of Facebook ads can be very lucrative if done correctly; it can also be costly if done incorrectly. Do your homework or find someone who knows the game, so you don’t get crushed by ineffective ad campaigns.
I used highly targeted Facebook ads that directed users to landing pages that I created with Unbounce and was running Hotjar on top of it (for in-depth analytics). I created landing pages for my three main customers — weddings, businesses, and birthdays. Having separate landing pages for my different customers made it easy to display the information relevant to them.
I put coupons on websites like Couponsock, which brought me some free traffic. I gave coupons whenever I could. People are much more likely to purchase if they think they’re getting a bargain.
5. Writing Blog Posts
Blog posts and other forms of free content are a great way to drive traffic. I published articles related to my service, which helped more people discover my website. Creating content that doesn’t require someone to make a purchase is a great way to get more eyeballs on your website. It’s also a good excuse to send an email newsletter.
6. Cold Emails
I hired a virtual assistant from Fiverr to create a list of event planners, wedding planners, DJs, marketing specialists, restaurant owners, and anyone who might be a customer.
I had different email templates for each and would send them an email with details about our service and how they could benefit from using it. The great thing about being a small business is the flexibility and freedom. If a prospect had a special request or wanted a discount, I gave it to them right there on the spot, no approval needed.
7. Add a Live Chat
Add a live chat feature to your website — I used Zopim chat by Zendesk, and it worked wonders. Zopim allows visitors to engage with a live customer service/ salesperson as soon as they have a question. Customers liked this highly personalized sales experience because it removed any of their uncertainties. I know for a fact that live chat accounted for thousands of dollars in added revenue for my business.
8. Building a Mailing List
I gave a free 5% off coupon to everyone that signed up for my newsletter, and I would occasionally send email updates. I made sure not to spam subscribers, just quick updates now and then reminding them we still exist. For example — “Happy Halloween! Get a Snapchat filter at freakishly low prices!”
Getting consistent traffic doesn’t happen overnight, be patient, and try not to crumble like a stale cookie during the process — I almost did.
Running the business
At the start, I was a one-man show. Aside from the guy I hired for SEO, I was taking care of all the customer service, marketing, filling orders, and website design/ maintenance.
As orders and revenue began increasing, I put systems in place and hired people to run different aspects of the business while I spent time polishing the website design, creating advertisements and content.
Typeform made the order filling process harmonious for both my customers and my employees. As my business grew, Typeform automatically sent email notifications to my employee in charge of filling the orders, completely automating the order filling process. My (almost) perfect order filling system went something like this…
My niche became overrun with competitors
In the following months, I was working on other side projects, and I started paying less attention to the site. The business was on autopilot for the most part, except the occasional fires I had to put out.
I saw a growing number of competitors entering the market, some well-known sites, and design firms. Snapchat was even beginning to offer more tools and options for users to create filters for free. Customer acquisition was becoming increasingly more expensive and complicated. Buyers wanted the cheapest, quickest option, which made providing a high-quality service back-breaking without operating at a loss.
As the industry began to undercut each other’s prices, margins got slimmer.
It reached a point where the market was over-saturated, and I could see the shelf-life of my business expiring. My website was up and running months before competitors, but as time went on, it didn’t matter who started first.
The issue with this niche was the little to no startup cost — allowing anyone who could put up a webpage to wet their beak.
I’m not one to back down in the face of competition; I welcome it. The problem was, the competition was there to undercut and provide cheaper, lower quality services. My aim was to provide the highest quality designs and overall experience, which would soon be impossible.
I enjoyed running the business at first, but as time went on, I realized that it didn’t scale well, and there was hardly any innovation that would differentiate my company from the others.
I was constantly playing defense with my business rather than offense.
Selling the company
Less than a year from launch, the website was sold.
I spent a month organizing tax documents, accounting details, and business assets; then everything was handed over to a small marketing firm in Holland.
I was satisfied with the valuation that was given to the business, and I was optimistic that the new owner would be able to take the company to new heights.
Selling the website for me wasn’t a difficult decision, and I certainly didn’t look at it as a failure.
The sale was liberating, to say the least. I now had the stability to focus my energy and resources on other projects instead of spending time and money trying to save a dying business. The brain fog associated with running a struggling company was gone.
Competitors weren’t going to stop entering the market anytime soon, and if I stuck around much longer, I risked losing more market share. The website had reached a point of diminishing returns for me, both personally and financially. I rode the wave for two years and was ready to move on to new ventures.
If you haven’t read part 1 yet, read “How I Went From Broke Shoe Salesman to Making $1,000+ per week on Fiverr”
If you’re interested in how I used my track record to get hired as a designer at Snapchat, read part 3.