Starting a lead generation business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful lead generation business.
Importantly, a critical step in starting a lead generation business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Lead Generation Business:
- Choose the Name for Your Lead Generation Business
- Develop Your Lead Generation Business Plan
- Choose the Legal Structure for Your Lead Generation Business
- Secure Startup Funding for Your Lead Generation Business (If Needed)
- Secure a Location for Your Business
- Register Your Lead Generation Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Lead Generation Business
- Buy or Lease the Right Lead Generation Business Equipment
- Develop Your Lead Generation Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Lead Generation Business
- Open for Business
1. Choose the Name for Your Lead Generation Business
The first step to starting a lead generation business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your lead generation business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your lead generation business.
2. Develop Your Lead Generation Business Plan
One of the most important steps in starting a lead generation business is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your lead generation business.
- Company Overview – this section tells the reader about the history of your lead generation business and what type of lead generation business you operate. For example, are you an online lead generation, local, network, platform, or an agency lead generation business?
- Industry Analysis – here you will document key information about the lead generation business industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target audience are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your lead generation business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your lead generation business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Lead Generation Business
Next you need to choose a legal structure for your lead generation company and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the lead generation business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a lead generation business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a lead generation business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a lead generation business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your lead generation business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Lead Generation Business (If Needed)
In developing your lead generation business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a lead generation business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a lead generation business that they believe has high potential for growth.
5. Secure a Location for Your Business
There are a few key things to keep in mind when looking for a location for your lead gen business. First, you’ll want to consider the demographics of your target market and make sure the area you choose has a population that fits your ideal customer profile. You’ll also want to think about the cost of doing business in the area, as well as the availability of parking and public transportation. Finally, you’ll want to make sure the location is visible and easily accessible to your target market.
If you keep these key considerations in mind, you’ll be well on your way to finding the perfect location for your lead generation business.
6. Register Your Lead Generation Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your lead generation business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your lead generation business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
To start a lead generation business, you will need a business license and a permit to collect personal information. You may also need a permit to solicit business from customers in your area. Check with your local government to find out what permits and licenses you need to operate your business.
10. Get Business Insurance for Your Lead Generation Business
The type of insurance you need to operate a lead generation business will vary depending on the scope of your operation.
Some business insurance policies you should consider for your lead generation business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Lead Generation Business Equipment
To start a lead generation business, you will need a computer, internet access, and a phone.
12. Develop Your Lead Generation Business Marketing Materials
Marketing materials will be required to attract and retain customers to your lead generation business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your lead generation business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional lead generation business website provides prospective clients with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you..
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your lead generation business.
13. Purchase and Setup the Software Needed to Run Your Lead Generation Business
To run a lead generation business, you will need software that can manage and track your leads. There are a number of software options available, such as Salesforce, HubSpot, and LeadPages. Choose the software that best fits your needs and budget.
14. Open for Business
You are now ready to open your lead generation business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Lead Generation Business FAQs
Is it hard to start a lead generation business?
There is no one-size-fits-all answer to this question, as the ease or difficulty of starting a lead generation business will vary depending on your skills, experience, and resources.
However, if you follow the steps above, you should be able to start your lead generation business without too much difficulty.
How can I start a lead generation business with no experience?
If you're looking to start a lead generation business with no experience, there are a few things you can do to get started. First, research the industry and learn as much as you can about lead generation. Next, create a business plan and make sure your lead generation strategies are sound. Finally, build a landing page for your business. If you follow these steps, you'll be on your way to success.
What type of lead generation business is most profitable?
The profitability of a lead generation business will vary depending on the target industry and the methods used to generate quality leads. However, some of the most profitable lead generation businesses are those that specialize in lead generation campaigns for companies that will pay a higher price to acquire new customers up front. For example, companies in the finance, insurance, or legal industries may pay more for lead generation services than those in other industries.
How much does it cost to start a lead generation business?
The cost to start a lead generation business can vary depending on the size and scope of the business. However, on average, it costs between $5,000 and $10,000 to get started. This includes the cost of setting up a website, purchasing leads, and hiring a sales team.
What are the ongoing expenses for a lead generation business?
The ongoing expenses for a lead generation business are typically the cost of quality leads, the cost of marketing, and the salary of the salesperson. The leads can be purchased from a lead broker or generated through your own marketing efforts. The cost of marketing will vary depending on the type of marketing you do and the size of your target market. The salary of the salesperson will depend on their experience and skills.
How does a lead generation business make money?
There are a few ways a lead generation business can make money. One way is to sell leads generated to other businesses. Another way is to provide a subscription service where businesses can pay a monthly fee to access a list of leads. A third way is to charge a pay-per-click (PPC) fee for businesses that want their ads to appear on the lead generation website. Finally, a lead generation business can sell products such as lead generation software.
Is owning a lead generation business profitable?
There are many reasons owning lead generation channels can be profitable. One of the main reasons is a high demand for lead generation services. Businesses need leads to succeed. Lead generation companies can also scale their businesses with little capital or resources and grow rapidly. Finally, lead generation businesses can generate a high return on investment. This is because the cost of acquiring leads is relatively low, and the margins are high. As a result, owning a lead generation business can be quite a profitable venture.
Why do lead generation businesses fail?
Lead generation businesses can fail for a number of reasons. One reason is that they may not have a solid lead generation process. Without a process, it can be difficult to scale the business and bring in new leads. Additionally, businesses may fail to properly target their leads, which can result in low conversion rates. Finally, businesses may not have the necessary resources to support their lead generation efforts, resulting in a low return on investment. By avoiding these common mistakes, businesses can improve their chances of success with lead generation.
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