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Business Strategy

What are some ways to charge for service - based on creation of value?

3

Answers

Jason Lengstorf

Expert in location independence/work-life balance.

If you're talking in terms of service-based work (freelancing, consulting, etc.), then ALL of sales should be based around the value you're creating for the client. If I build a new marketing funnel for a client and they see an extra 100 leads per month — assuming their standard conversion rate for new leads of 5% and an average lifetime value of $6,000 per new customer — I've just created a pipeline that will feed this company $30,000/month of new revenue in perpetuity. Even if that work seems easy for me, I need to be charging on the value I create. I've coached many freelancers who struggle with the idea of charging for their work, and it's always because they're framing it on hours or difficulty rather than value. But if you sell on created value, your fees are essentially an afterthought: the client knows what they stand to gain, and paying you 20% of their first few months' revenue is a steal in their minds. If you'd like to talk specific strategies for sales, I'm happy to share what's worked for me. Drop me a line. Good luck!

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Scott Colenutt

Clarity Expert

Yes. They should be responsibile for identifying opportunities to expand the company's products or services as well as being responsible for identifying any risks to current products or services and identifying ways to capitalise on the things that already are making the company money. They should work closely with the company's product director, financial director and marketing directors. In addition to working with the directors of these departments, they should essentially be an ear to the ground across all departments, identifying trends from internal feedback and observations.

Jason Lengstorf

Expert in location independence/work-life balance.

One idea that's worked well for my clients has been to create a Skunk Works, which is effectively an autonomous, outside-the-bureaucracy, kinda-sorta-secret R&D team. I've been on these teams before, and if they're truly left alone with a pile of ideas and resources, they can accomplish incredible things. (This is how Lockheed Martin developed some of its most incredible tech, and how Google takes its "moon shots".) But it will be a challenge to management, because they'll have to stay out of it after the initial specs are delivered. If you can get buy-in, though, you'll bring back startup-level development speeds to your organization. I'd be happy to discuss some of the processes I've followed and the structure of the teams I've been part of — just drop me a line. Good luck!

Jason Lengstorf

Expert in location independence/work-life balance.

The route I'd take is to start researching conferences that you'd like to speak at. Find out where and when they occur. Look for a "call for proposals" — lots of conferences ask speakers to submit talk ideas. Find out who runs them. See if you have any mutual friends. If not, see if you can find a way to be helpful to them (without asking for anything in return). Building good will has paid me back many, MANY times over as a speaker. Look for local meetups. Maybe organize your own. Start to get experience as a speaker and build a reputation. It starts slow, but things ramp up quickly once momentum picks up. I used this approach to build my own speaking career. I'd be happy to share my strategy and story with you if you're interested. Good luck!

Jiri Fiala

EU based multiple Entrepreneur. Angel Investor.

If it is really only two way country transfer (or one receiving country and several country stacks sending money there) it would be best to build your own custom solution. Basically a simple SW to allow for receive electronic transfer money in some region (one for EU, one for US, one for Australia for example) together with API linked bank accounts and one payout in target country. Of course you might have to do some KYC/AML/PEP checks but there are API avaliable services to do that for you. Depending on how you want to build it, it should not cost you more then 75k USD total. Ask around for good SW houses in your area or call me and I can help you put it up together.

Jason Kanigan

Business Strategist & Conversion Expert

Most people are lazy. They won't do anything other than daydream about becoming your competition. Next point: if the barrier to entry to your marketplace is low, then it's all about selling. Rather than focusing on features or what you do ("We make websites"; who cares?), start talking about serious problems your solution fixes for your customers. Things like: > reduced waste/rework > minimized project times > lowered interpersonal struggles > shrunk sales cycle > sped-up time to profitability on new products. When you concentrate on these ideas, you differentiate yourself and move out of being a commodity provider.

Kenneth Wolstrup

Value adding advice built on analysis.

First off, you have to find out who would be willing to pay for this. All the information you describe here is already out there online, if you have the knowledge and the time to research it. In my view, your segments should be found with people, who are too busy to build a schedule themselves, or don't know where to go and need inspiration on that. But is there a business case in building an audience, that would pay for that service? Traditionally travel agents get commissions from airlines and hotels, that they book with - would private customers be willing to pay for you? "Off-line-travel-agents" already exist. I could see a business case for an "online-travel-agent", if you would make the bookings also. But that comes with a different responsibility as you would be closer to working as an actual tour operator, and handle when hotels have overbookes, flights cancelled, etc. What you could consider doing could be building your own niche - trips to Spain, Greece, California, Northern Thailand, South Africa, whereever - and you become THE expert on that area. You would know everything - all sites, attractive accomodation, flights, means of transport, dangers and annoyances - and you build an online universe around that, but also do the bookings. Then you would get commissions from the different operators you would work with and be the source of knowledge about that. Good luck with your business idea! If you would like to discuss this further, let's set up a call. Best regards Kenneth Wolstrup

Edward Venable

Artist, Ideas, Business and communications.

Honestly kickstarter is a brilliant site for startup funding and it will help you get the word out. If your start up is as good as you think then you might even get even more funding money than you had thought.

Ethar Alali

Lean Enterprises, Mathmo, Algo-Geek & Coder,

Hello, I've built and integrated with countless payment processors in my time, including the usual Stripe, PayPal and Braintree managed processors as well as direct banking integrations (HSBC, RBS etc) and I've also worked at indirect competitors of AirBnB and the key to getting the process to work like AirBnB isn't to use the default offerings of Stripe, PayPal and Braintree :) You have to go straight to the back end payment processors of your bank or to an API based intermediary. Some are offshoots of default services like PayPal, eWay and WorldPay, others are bespoke banking solutions which charge you on-demand/PAYG or a fixed fee and then you maybe optimise your costs on your side depending on the charging model. However, this isn't a small scale integration. Some of these take 3 weeks of bespoke development, when factoring in the merchant ID and banking QA process. Hit me up for a call if you need to discuss this in more detail. Happy to help.

Jason Lengstorf

Expert in location independence/work-life balance.

Web development jobs ask for experience, but what they're actually referring to is ability. You can "hack" this process by building projects publicly. Use GitHub, contribute to open source, and continue building for-fun projects to grow your skills. Send your GitHub link along with applications, and you'll get some nibbles. Good luck!

Rui Delgado

Entrepreneurship / Online Marketing / E-Commerce

It's not foolish, but it's going to be extremely hard to pull it off. I would consider starting with a beta program so you can have some paid clients to pay for the company's expenses. After you have some traction, you can raise a seed round.

Kenneth Wolstrup

Value adding advice built on analysis.

No matter if you are creating a physical or webbased marketplace, the used car market is crowded. So you need to stand out. So you need to explain exactly what value you are creating for the suppliers. Parameters could be: - Convenience: Easy to set up a profile or deliver your car. - Best price: You document that you will offer the best price - Guarantee: You will take the car off their hands without any further discussion - they are free to go with money in their pocket, and you carry the risk. - Best presentation of the car: Great location of the shop, best looking website, most traffic compared to competitors or some other KPI that would signal, that you will get them the most exposure. - Referrals: People who trust you with regards to selling their car, will refer their friend, if you showed them a good experience. Pay for referrals from strategically chosed friends - f.ex. from mechanics, dealers of new cars, insurance companies or similar. Those were just af few ideas to get you started. There are similar ideas for the buyer side. I will be happy to discuss both sides of your market in a call, if you want to set it up. Good luck with your business! Best regards Kenneth

Rubin Gurabardhi

Expert in statistics

You can build based on your traffic a fee for backlinks based on industry and it could be a price list for 1 star, 2 stars, 3 stars, ..., 5 stars. By saying so you can stimulate entrepreneurs and blogers to engage people to vote on a small widged you can build and put on their website in order to pay less if they have 5 stars and more to have the traffic needed to grow if they have a ratio of 1 star.

Darian Parrish

Innovation and productivity - let's make it happen

You don't. But you can definitely build the product. This is a crowded market where reputation is of critical importance. It is much easier to get a large sponsor to revenue share and handle distribution and marketing. Most of the insurance companies would be a good target for annuity products but asset management firms will bite as well. If the product has merit(something unique and value add) I am happy to make intros.

Jason Kanigan

Business Strategist & Conversion Expert

No. GPA is a performance measure for academic pursuits. Memorization, rote, and perhaps a little critical thinking. It's the real world out here, unsafe and prone to sudden breakdown. Your ability to interact with people, deal positively with the unexpected, and handle ongoing stress are far more important than regurgitation of some process upon command. In the real world, you can always pay someone to learn the thing. Or take the time to look the thing up yourself. Memorization is not important. Problem-solving is. Frankly if you were too methodical a person, I'd be more concerned about your entrepreneurial future than if you're spinny and prone to getting struck by new ideas. But any type of person can be an entrepreneur. The key issue is whether you can handle the stress. And no school can prepare you for that--even the one I went to, that made us wade through 10 and 11 courses a term, resulting in a 40% student failure rate. Entrepreneurship is more than just hard work. Hard work is easy. If that's all it took, many more people would be rich. But the universe doesn't care how hard you work...nor how hard your competitors are working, either. Remember that on your journey.

Murat Askin

Clarity Expert

1-Because transportation of perishable products are very specific you need to ensure there will be refrigerated facilities available at the destination which you can rent it for a short period of time. Truck company (if they have office at destination) can help out with this or find similar companies 2-Group orders with "consume by date" and delivery as a big order 3- Look for cheaper options. I mean NY sushi restaurants import fresh fish from Japan on a weekly basis, I dont think any truck company/person will care for collaboration 4- Call various shipment companies and cut a deal, I hope i get this right but what are you shipping in low quantity and costing you much money? Must look for different options or clients closer within your range

Barbara Carneiro

Disciple, church communicator, speaker, geek

The list would depend on your business, audience and overall problem you are solving. Many people focus on the tools, then create process around them and only after that do they pursue an audience. This equation per se is wrong. The "secret sauce" if you want to call it that way is in your ability to start from the people, then create process of engagement and only then look for tools that allow you to execute your processes. People > Process > Tools This is the key. Anyone that start with the tools will be giving you the wrong information. Twitter may be a multi million opportunity for some and a complete failure for others. Radio may be the way some people are successful and that may be completely wrong for my audience. Marketing is a form a communication and the basics of communication is that there is a message and a receiver. If you neglect the receiver your marketing will fail.

Lee von

Unique Insights, Creative Solutions

It depends on the kind of job you're looking for. For an early stage startup the "width" is relatively more important (but obviously the deeper the better too). Meanwhile for a bigger company with a lot more fellow coders the "depth" is relatively more important (but the more width the better too obviously). best, Lee

David C

I help you buy, sell, plan, value a business

There are lots of great companies that make a profit while helping others. Many times, these companies are formatted as a pair of companies. For example: 'Helpco is a not-for profit corporation that does X and donates proceeds of it's activities to Y.' What is not part of the headline is that Helpco has a management contract in place for administration and operations with ForProfitConsultCo. Helpco pays ForProfitConsultCo a fee for managing its day to day operations and this is where the salaries reside and the profits for your efforts. If you look carefully, there are examples of this kind of arrangement everywhere. I can think of one credit counselling company near me that advertises the fact that they are a not-for-profit and I know the owner is paid a respectable salary via a management contract. I hope this helps.

Randall Reade

Washington DC ArchAngels Founder

You do not need to incorporate, and you may use the other company for now. Of course, it is always better to incorporate so that you have a legal entity by which you operate, collect fees, pay taxes, and so on. If you choose not to incorporate at this point, then you should at least have a written agreement with your partner. It should say that you both intend to start a company and are using the other corporation only temporarily and only for the purposes of the merchant account, and that as soon as you have enough money, you will incorporate properly. Your agreement should also spell out the different roles you both will play, and who owns what. I would assume you stipulate that you each own 50% of the new company, and therefore each of you are entitled to 50% of any profits after all expenses and taxes are paid, and you are both equally responsible for any debts that are incurred You should also stipulate that for the terms of the agreement, all decisions must be unanimous, but that either of you may withdraw from this agreement at any time and end the relationship. If you need help drafting the agreement I can help. I'm an attorney as well.

Taft Love

Sales development and operations leader

This is a difficult question to answer without a lot more info, but I'll share some high-level strategy. 1) Develop your ICP (Ideal Customer Profile) in your new markets. Until you do this, you're just "doing stuff" without clear direction. 2) Identify the likely decision-makers in your market. If you're not sure, start calling some of the companies that match your ICP and ask questions. 3) Build a list of people who match the decision-maker role at your ICP companies and start asking questions. It may take some effort to get people on the phone, but it will be well worth your time to understand your prospects? 4) Using what you've learned, create an outbound marketing and sales strategy with companies in your ICP as your outbound targets. I hope that is helpful. Best, Taft

Jim Yuan

Entrepreneur, Writer, Consultant, Digital Nomad

For two sided marketplaces, I recommend having strategies for the following areas: 1) Strategies for solving the chicken-and-egg problem in the beginning, as many multi-sided marketplaces fail to gain traction due to this problem. Buyers need sellers in order to show interest; sellers need buyer in order to come. Some strategies to solve the chicken-and-egg problem: a) Determine which side "makes or breaks" your business, and find key initial anchor tenants on that side. Usually, it's the buyers, as sellers will go where there's demand. Pay/give incentives to those initial anchor tenants if you have to. b) Keep it to an initial segment or two in order to establish critical mass. Don't be all over the place. Establish a niche first where your buyers and sellers can meet. c) Fake it till you make it. The founders can pretend to be buyer/or seller in the beginning. Also make some convincing "fake" profiles so that the marketplace does not look to empty. 2) Strategies that create and maintain high value-add interactions between all sides in the marketplace. The marketplace needs to help buyers and sellers capture consistent value effectively and efficiently. Once you solve the chicken-and-egg problem, you need your users to stick. Some strategies: a) Create a reputation system to ensure quality buyer and seller interactions. b) Give your sellers adequate tools for creating products and services. c) Optimize how your buyers can best search and filter the products, services, and sellers they need. d) Be very clear how buyers and sellers can transact for goods and services. Make the process simple and easy to follow.

Scott Colenutt

Clarity Expert

It is based on rankings. So if yesterday I was in position 1 and today I am in position 4, there will be a red minus 3 symbol.

Scott Colenutt

Clarity Expert

My guess is that the question you are asking is, how to get funds? In which case, I think you could try: 1. Asking friends, family and friends of friends and family of family. See if anyone is interested and see if you can create a group of people who like your idea and can help you move it into a prototype stage. 2. Save whatever money you can and depending what your product is, see if you can outsource the development through freelancer.com. 3. Set your project up on Kickstarter or Indiegogo. Or any equivalent crowdfunding site. 4. See if there are any local government/state schemes that offer funds for projects such as the one you have in mind. 5. Take out a bank loan or credit card. Not recommended. My guess is that you are still looking to validate your idea first. Plus, you can likely achieve what you need to without credit from the bank. 6. Find investors. Or perhaps consider a platform like seedrs.com. Go to local chamber of commerce events, start building your network. 7. Send out a message to all your LinkedIn contacts, tell them about your idea and ask them if they can help or notify you of anyone they think might be interested in your idea. 8. Go on Product Hunt, see if you can find an idea similar to yours and start researching how those companies got their investments. 9. Run your idea past a local university and see if it fits in with any of their current projects. Perhaps there will be some crossover. 10. Put out a call on all your social networks, email etc and note you're looking for support and funds for your prototype. Worth a shot.

Scott Colenutt

Clarity Expert

1. Get your marketing collateral together. Your case study and testimonials from your beta trial. Make sure you have a demo app ready so you can walk into any medical clinic and show the product on the spot. 2. For this industry, perhaps consider a small digital signage campaign. If you don't know what digital signage is, it's controlled offline advertising in public places. Usually via screens or devices like iPads. They are usually prominent in places like medical centres, Universities, shops, public transport etc. 3. When it comes to online advertising. It's always worth testing both organic and paid campaigns on Twitter and Facebook. However, LinkedIn is perhaps where you will really benefit from investing your time. You should look to target the types of professionals in medical establishments who are involved in purchasing decisions for technology. 4. Yes, go offline. If you have had a good beta trial and have a working product, start lining up offline meetings to pitch your solution. Go in, speak to people, pick up the phone. 5. Consider running mobile app install PPC campaigns via Google search and the Google search network. 6. Consider app partnerships. e.g. is there an app that a lot of medical professionals already use. Can you promote your product via their app? 7. Go down the PR route. This could work really well if you're looking to start locally. Find your hook, pitch to local journalists and get exposure in local publications. What I've written above is quite broad and there is a lot to consider tactically, but running through the points above should give you plenty of food for thought.

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