A Fizzle member wrote in recently wondering how much traffic his website needs before he starts monetizing. Here’s his full question:
The most fundamental question I’m facing is how to begin to monetize my business. I run a site which helps parents find child care and helps child care providers connect with parents.
My business partner and I are struggling with how we will make the jump from what we have now, which generates no revenue at all, to a place where we can begin to make revenue. The dilemma we have is that the model we’ve put together depends on child care providers paying to upgrade from a free listing, which anyone can have, to a premium listing, which will cost a yet-to-be-determined amount per month and come with added features (more photos, videos, testimonials from parents, etc on their listing page).
Obviously, we need to have decent traffic in order to make the pitch to providers that it’s worth their money to pay for a featured listing, and we’re not there yet. But, on the other hand, we don’t want to wait too long to begin charging for premium listings.
What metrics can we use to decide when to make the jump to begin offer featured listings that we charge for? I’m sure it will be some amount of traffic, but I really have no idea what the level should be. Thoughts?
My first gut reaction is: there’s couldn’t be a right answer to this, right? No matter what you do, no matter when you make the change, you’re going to be able to look back and say “i wish we would have done it sooner” or “i wish we did it later.”
So, that tells me, 1. there’s no way to hit it perfectly. 2. there’s some wiggle room in here, a wider band of time where the change will work fine.
Which begs the question: what can we use to determine when that time band of okay-ness is? You can probably put together a spreadsheet on this modeling the interaction between # of parents looking/buying, the # of sitters listing, and the # of sitters paying for sponsored listings.
Here’s something I’m wondering: if I pay for higher/sponsored posting but the people looking are trying to book me for a night I’m already booked, won’t it feel lame to get inquiries I can’t fulfill? It’s almost like, instead of being just the listing of sitters, you also want to be the way parents pay the sitters and then you get a cut off that. Like Uber, riders and drivers work, Your site, parents and sitters works. Probably something already on your radar.
Another exercise here: make a list of pros and cons for when to make the shift. Why not start with paid positions from the start? What’s the drawback to that? Writing pros and cons down with your partner about the different stages you may define could answer this question for you.
Break a leg!
The Top 10 Mistakes in Online Business
Every week we talk with entrepreneurs. We talk about what’s working and what isn’t. We talk about successes and failures. We spend time with complete newbies, seasoned veterans, and everything in between.
One topic that comes up over and over again with both groups is mistakes made in starting businesses. Newbies love to learn about mistakes so they can avoid them. Veterans love to talk about what they wish they had known when starting out.
These conversations have been fascinating, so we compiled a list of the 10 mistakes we hear most often into a nifty lil' guide. Get the 10 Most Common Mistakes in Starting an Online Business here »