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Post 2 Profit Review: Post Twice A Day, Make 917 A Week

Creating a successful social network is no easy task. Making money from it is arguably even harder. Peter Ward knows this better than most. Ward is co-founder and chief executive officer (CEO) of WAYN (Where Are You Now?) a British-Polish startup and social network for travellers.

WAYN is a veteran in the social media world. It has seen the rise of networks such as Facebook and Snapchat as well as the fall of others such as Myspace and Friendster since its inception in 2002. In that time WAYN has been able to survive and carve out its own Post 2 Profit Review and following of around 23 million members.

It has not been an easy task. The network had to operate on a shoestring budget for much of its development and a large part of its on-going growth. Initially WAYN raised around $15,000 in seed funding, says Ward. Financing has become a bit easier to come by since then. In 2012 it underwent another round of funding, raising $5.5m – with a large contribution coming from Scottish Equity Partners.

Ward and his co-founders made a big breakthrough in 2005 that led to WAYN’s current success. At the time, the network was struggling to attract new members in a cost-effective way. “We were resorting to giving out fliers on the street,” says Ward. “ Google GOOGL -0.05% ad-words worked but were costing more per new member than we would be able to earn from them.”

At the time the site had fewer than 50,000 members. The founders of WAYN discovered that many users were joining but few would take the time to go through the process of manually adding their friends – resulting in a missed opportunity for membership growth and, potentially, a shorter period of activity as users that did not make new connections might drop out.

A social network diagram (Photo credit: Wikipedia)

WAYN created a system where users could automatically send invites to friends in their email address book –a now ubiquitous feature that was virtually non-existent at the time. This led to a massive increase in membership – over one million within six months and continued growth from there, says Ward.

This massive increase got the ball rolling and helped to ensure WAYN’s continued survival. The problem then became one of effectively commercialising the network and its user-base. “The networks that succeed are the ones with a clear commercial mindset,” says Ward. “New startups that try to be social and then make money typically don’t survive beyond a point.”

WAYN had an idea for commercial success. As users connected and discovered new places to visit, WAYN could capitalise through the provision of services such as bookings either directly on the site or through tie-in third-parties. But that doesn’t mean it’s been a straight road.

“At one point we had a Creativid Review service allowing travellers to meet up,” says Ward. “It kept the lights on and allowed us to continue to grow but it wasn’t the nexus of what we wanted.” The network has subsequently redirected back to its core objective – helping people discover where they should go on holiday through social interaction and travel reviews.

The next step is taking this data and codifying it to offer better options and a more tailored, personalise experience to users. This includes collecting and mapping data on what activities are good in any particular destination, Ward adds.

“We’re making the user experience more targeted and relevant –and that means we get a higher return on every user experience,” he says. “If we can convert users to discover more or make a booking, it means we’ve done a good job in bringing them what they want.”

The number of social media sites continue to rise. There's no way of knowing what the next big thing is. But by ensuring a social media site has a commercial objective, a niche area of interest and the determination to succeed on a small budget, a startup has a chance to succeed.

Income and Billing

Now that you have made the decision to open your consulting business, you need to get serious about how much money you will charge your clients. If you charge too little, you won't succeed in business. If you charge too much, you won't get any clients. So how do you find that middle ground that seems fair to everyone involved? One way to help you decide how much to charge is to find out what the competition's rates are. A simple telephone call, asking for their brochure and rates, should do the trick. Then set your rates so that you are competitive with everyone else in the community.

Before setting your fees, make sure you have listed all of your expenses. There is nothing worse than setting your rates, having your client pay you on time and then finding out you failed to include several expenses that materialized. This Facebook Remarketing 3.0 Success Kit Review brings up an important point to remember in every job you take from a client: Include a "miscellaneous" line item in your fee proposal. But don't pad the miscellaneous figure to make additional income.

Most clients will understand that in every project, there will no doubt be additional expenses. Just be sure everyone knows upfront an approximate figure for those expenses.

Before you set your rates, find out what other consultants in your community are charging for their services. Sometimes a simple telephone call to another consultant's office asking what their fees are will give you the answers you need. Or you may have to have a friend call and ask for their brochure, or any additional information they can collect regarding fees and pricing. If you live in a small town and there are no other consultants in your field, then rejoice and be glad, but set your fees at a reasonable level!

When setting your rates, you have several options, including hourly rates, project fees and working on a retainer basis. Let's examine each one closely.

Hourly Fees

You need to tread carefully when setting hourly fees, because two things could happen: A) Your hourly rate is so high that no one could ever afford you (therefore no client will ever knock on your door). B) Your hourly rate is so low that no one will take you seriously.

Keep one important rule in mind when establishing your fee, no matter which structure you decide on: The more money people pay for a product or service, the more they expect to get for their money. In other words, if a client agrees to your hourly rate of $400, then you had better give $400 worth of service to that client every hour you work for them.

Some clients prefer to be billed on an hourly basis, while others hate the idea of paying someone what they perceive to be too much per hour. Those clients usually prefer to pay per project.

Project Rates

When working on a project rate basis, a consultant normally gets a fixed amount of money for a predetermined period of time. A few of my fund-raising clients actually preferred to be charged this way, so it wasn't unusual for me to charge $36,000 for a one-year project in which I consulted them on how they could raise money. Because of the amount of money involved, most agencies preferred to be billed on a monthly basis. This worked out fine until I realized that many agencies were late paying their monthly bills.

Because of this, I decided that all future clients who wished to be billed on a monthly basis would pay the first-month fee and the last-month fee at the signing of the contract, which meant that if the agreed-upon amount of the project was $36,000, to be paid on a monthly basis, I received a check in the amount of $6,000 before I began any work ($3,000 for the first month's fee and $3,000 for the last month's fee).

Retainer Basis

Working on a retainer basis gives you a set monthly fee in which you agree to be available for work for an agreed-upon number of hours for your client. While in the ideal world you would have a dozen or so clients who hire you and pay you a hefty sum each month (and never actually call you except for a few hours here and there), don't get your hopes up. Most companies that hire a consultant on a retainer basis have a clause in their contract that prohibits you from working for their competitors.

Working and getting paid in this method certainly has its advantages. You are guaranteed income each month, and when you are starting out in your consulting business, cash flow can be a problem. Some consultants actually offer a percentage reduction in their fees if a client will agree to pay a monthly retainer fee. The average income when a consultant is paid on a retainer basis is $3,500 per month.

Marketing

If your consulting business has no clients, then you have no consulting business. But you must remember that selling your consulting services is not the same as selling a car or a house. In the case of the car or the house, the customer is probably already in the market for one or both of those products. Your job, then, becomes harder, because you are marketing your services to people who may not even be aware that they need those services.

There are a variety of methods you need to become both familiar and comfortable with in order to begin attracting and keeping clients. Let's look at some of the more conventional ones that are being used by many consultants today.

Brochure Basics

There are five issues your brochure should address. They are:

  1. It should clearly convey what your services are.
  2. It should tell customers why you are the best.
  3. It should give a few reasons why you should be hired.
  4. It should include some brief biographical information.
  5. It should include some information about who your other clients are.

That's it. Keep it simple, but do it right. Remember, your brochure represents you in the marketplace, so make sure you polish it before you send it into action. Your entire consulting career depends on it!

Cold Calling

You must do whatever it takes to make cold-calling work and make it easier for yourself. There are a few tricks you can use to make cold-calling a little easier for you:

  • Prepare a script ahead of time. Spell out word for word what you expect to say when you get someone on the telephone. Remember, though, that your goal is to get a face-to-face interview and, eventually, a new client. So before you end up stumbling over your sales presentation (either in person or over the telephone), write your script and practice it again and again.
  • Be creative in your efforts to reach the decision maker. Most times you will encounter a secretary or administrative assistant who has years of experience turning away cold callers like yourself. But don't give up! Don't let any obstacle stand in your way! To avoid being screened by the secretary, try calling before she is on the job. Yes, you may have to call before 8 a.m. or after 5 p.m., but at these times, chances are the decision maker you are trying to reach will answer their own telephone.
  • Limit your cold calls to just several days each month. And look forward to those days, making sure you put your best effort into the process. That way, not only will it become easier to make those cold calls, but you will find yourself actually looking forward to making them!

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