WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
Hi all,

I recently started a small business. The business is essentially a website design business called Webnexus. Link:http://www.webnexus.co.za/.

As part of a SWOT analysis I realize that one of the threats of the industry my business operates in is that it is highly competitive. With this in mind I tried to do two things.

1-Find a niche': The first niche I'm focusing on is weddings websites. So basically if you are getting married you can use the website to manage RSVP, share photos and your stories, etc. A link can be found here: http://www.saweddingwebsites.co.za/

2-The second is the pricing of packages. From the research I did I found that many website designers offer their services as a large lump-sum cost. I.e they charge a large up-front fee. So to try and do things a bit differently I offer a low upfront cost and then charge a relatively low monthly servicing fee.

The idea behind this is that even thou the initial income from a single website will be low and the monthly fee is low, if I continue to work at getting clients over the long term the business will be a sustainable business due to the recurring revenue.

I would like everyone's opinion on the viability of this pricing model and if you have any suggestions or advice please share it with me.

Thanks is advance!
 

shauntir

Well-Known Member
Joined
Sep 11, 2013
Messages
457
It is tough out there. I ran/run my own development company for nearly a year now and have a few wounds (lol).

The Most Important Thing (tm) is to get actual customers to validate if what you are offering is what they need and want. All to often, we develop and design things that we think customers would want but then end up with something no one wants.

Keep your pricing high and try to "sell" the value by pointing out why you offer superior quality. That means you actually have some form of process that helps your customer save real money or time.

So perhaps in your situation, you would need to point out how the online RSVP saves them time and why having an online photo gallery is better than traditional hard copies. Maybe integration into facebook, instagram and other services could help. But only dev those things when you have real customers needing and wanting this.

You do not want cheapskate customers since you will eventually get burnt by them.
 

creeper

Executive Member
Joined
Nov 18, 2010
Messages
5,207
Google: business model canvas. I use it often oh my lecturing as it provides a great holistic of all components needed forms good business model. It also forces you to think about what are really doing

Also. Tools does not equal strategy. SWOT Porter etc is overused and people don't understand the underlying assumptions of the tools. Also. The tools are used as a tick box exercise.
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
Google: business model canvas. I use it often oh my lecturing as it provides a great holistic of all components needed forms good business model. It also forces you to think about what are really doing

Also. Tools does not equal strategy. SWOT Porter etc is overused and people don't understand the underlying assumptions of the tools. Also. The tools are used as a tick box exercise.

The business model canvas look like a excellent tool. Thanks for this. I found this one :http://www.businessmodelgeneration.com/canvas/bmc

With regards to the tick box exercise, I understand where you are coming from but applying some thought to a new venture is better then going in blind. the business canvas tool seems like a much better tool for this.

Thanks again.
 

Greig Whitton

Active Member
Joined
Mar 12, 2014
Messages
99
I think that your biggest challenge isn't your business model, it's your value proposition. Why should someone pay you to share their wedding content on your website when they can do much of what you are planning to offer for free via social media?
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
It is tough out there. I ran/run my own development company for nearly a year now and have a few wounds (lol).

The Most Important Thing (tm) is to get actual customers to validate if what you are offering is what they need and want. All to often, we develop and design things that we think customers would want but then end up with something no one wants.

Keep your pricing high and try to "sell" the value by pointing out why you offer superior quality. That means you actually have some form of process that helps your customer save real money or time.

So perhaps in your situation, you would need to point out how the online RSVP saves them time and why having an online photo gallery is better than traditional hard copies. Maybe integration into facebook, instagram and other services could help. But only dev those things when you have real customers needing and wanting this.

You do not want cheapskate customers since you will eventually get burnt by them.

Its a tricky balance. You dont want to charge to much that you chase away potential customers but at the same time you dont want to charge to little both for cheapskate customers as you say and because at the end of the day you need to earn a living.

My thought process for the pricing was that most weddings have a budget, and I dont want the cost of the wedding website to break that budget and thus lose out on potential customers.

Thanks for the ideals of pointing out the value of the various features. I tried doing that on the features page: http://www.saweddingwebsites.co.za/features/http://www.saweddingwebsites.co.za/features/

Thanks for taking the time to give me your feedback: )
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
I think that your biggest challenge isn't your business model, it's your value proposition. Why should someone pay you to share their wedding content on your website when they can do much of what you are planning to offer for free via social media?

I thought of this and I agree that it is a weakness. My reasoning in terms of social media is that you can only post so much on facebook for instance before it becomes a bit obnoxious. Also facebook can not provide a RSVP function or give you access to google maps, etc. Another issue is that once something is posted, after time it falls away down the timeline as new posts are shown.

The purpose of the website is to have all that content displayed in a ordered manner thats easy to share now and in the future.
 

creeper

Executive Member
Joined
Nov 18, 2010
Messages
5,207
I think that your biggest challenge isn't your business model, it's your value proposition. Why should someone pay you to share their wedding content on your website when they can do much of what you are planning to offer for free via social media?

Go to the link posted regards the Business Model Canvas. One of the components is the value proposition.
 

Greig Whitton

Active Member
Joined
Mar 12, 2014
Messages
99
My reasoning in terms of social media is that you can only post so much on facebook for instance before it becomes a bit obnoxious. Also facebook can not provide a RSVP function or give you access to google maps, etc. Another issue is that once something is posted, after time it falls away down the timeline as new posts are shown.

The purpose of the website is to have all that content displayed in a ordered manner thats easy to share now and in the future.

But are those features that people want and, more importantly, are prepared to pay for?

By the way,have you checked out Google's wedding platform ? It looks like it already incorporates much of the functionality that you have in mind.
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
But are those features that people want and, more importantly, are prepared to pay for? By the way,have you checked out Google's wedding platform ? It looks like it already incorporates much of the functionality that you have in mind.

To be perfectly honest, Im not sure. And even thou services like google wedding platform and theknot exists for free I do believe it still has potential. For a number of reasons.
1- All these services place prefix infront of your site like: https://sites.google.com/site/. The URL is not custom like: http://www.joandnicole.co.za/
2- Ability to add new features or make specific changes. Free providers restrict a user to their templates if you need to change something within those boundaries you cant.
3- I am a person. What I mean by that is someone can pick up the phone and chat to the person creating their website. I can meet them for coffee somewhere. The personal touch.

These are only the points I can think of off the top of my head, but I believe they are important.
 

creeper

Executive Member
Joined
Nov 18, 2010
Messages
5,207
Let's put some structure to this:

1. Client. Who is your client? It isn't just wedding couples. It is families, in-laws etc. What customer segment and what type of relationship will you have with them? (note, I'm not really keen to get into the customer / client argument here)
2. What value are you going to provide (value proposition), by providing what offering (e.g. wedding website)
3. Through what channels are you going to provide this service
4. What resources are you going to require: Hardware, software, people
5. What is your key activities. Not just developing, but also running the business.
6. After answering these questions, what will be your revenue streams. Will you make money from the wedding couples, or are there 'other' customers that you can also make money from e.g. wedding company ads
7. What is your cost, looking at question 1-5? All costs. Salary, admin costs, marketing etc.

Then somewhere along the way, you need to ask. What makes you better / different / unique? There are so many competitors, free options etc. Is this viable or not?

Reality should trump emotion. Never a fun thing to do.
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
Let's put some structure to this:

1. Client. Who is your client? It isn't just wedding couples. It is families, in-laws etc. What customer segment and what type of relationship will you have with them? (note, I'm not really keen to get into the customer / client argument here)
2. What value are you going to provide (value proposition), by providing what offering (e.g. wedding website)
3. Through what channels are you going to provide this service
4. What resources are you going to require: Hardware, software, people
5. What is your key activities. Not just developing, but also running the business.
6. After answering these questions, what will be your revenue streams. Will you make money from the wedding couples, or are there 'other' customers that you can also make money from e.g. wedding company ads
7. What is your cost, looking at question 1-5? All costs. Salary, admin costs, marketing etc.

Then somewhere along the way, you need to ask. What makes you better / different / unique? There are so many competitors, free options etc. Is this viable or not?

Reality should trump emotion. Never a fun thing to do.

The structure you highlighted above seems to follow the business canvas model. Thanks for this, it was exactly the type of feedback and advice I was looking for.
 

creeper

Executive Member
Joined
Nov 18, 2010
Messages
5,207
The structure you highlighted above seems to follow the business canvas model. Thanks for this, it was exactly the type of feedback and advice I was looking for.

It does, but it was more for the other members posting to not jump around to much. :)

There is a lot more to this. But don't get bogged down on trying to develop the ultimate business model as a startup. Experiment. Read the Lean Startup by Eric Riles. It is more about doing then planning.
 

Greig Whitton

Active Member
Joined
Mar 12, 2014
Messages
99
1- All these services place prefix infront of your site like: https://sites.google.com/site/. The URL is not custom like: http://www.joandnicole.co.za/
2- Ability to add new features or make specific changes. Free providers restrict a user to their templates if you need to change something within those boundaries you cant.
3- I am a person. What I mean by that is someone can pick up the phone and chat to the person creating their website. I can meet them for coffee somewhere. The personal touch.

You obviously care about and value these features. But do potential customers care about them enough to pay for them when comparable free alternatives are available?

I'm not saying that your idea lacks merit. I'm just suggesting that you focus on your value proposition first (e.g. by conducting further market research) before you worry about your business model.
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
You obviously care about and value these features. But do potential customers care about them enough to pay for them when comparable free alternatives are available?

I'm not saying that your idea lacks merit. I'm just suggesting that you focus on your value proposition first (e.g. by conducting further market research) before you worry about your business model.

Thats the problem thou. Person A might be happy with a prefix to their wedding website, be happy with the available template and not mind not being able to chat to a person directly. (my 3 points earlier). While Person B can be the opposite, she whats only her and the grooms name to appear on the URL, will need changes and expect the personal touch.

The above problem is subjective between people and can differ.

There is a forth point that comes to mind looking from the above. Namely is a person tech savvy enough to use the free option and do they have the time to set it up? Im sure people can paint their own houses if they want to, but if they dont have the time and can afford it then they hire a painter to do it for them. Same principle with me and the free options.
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
It does, but it was more for the other members posting to not jump around to much. :)

There is a lot more to this. But don't get bogged down on trying to develop the ultimate business model as a startup. Experiment. Read the Lean Startup by Eric Riles. It is more about doing then planning.

I agree with you. Thats why the website is up and running already. For instance I have begun to advertise on wedding websites and already I get alot of feedback from their designers regarding the look and feel of the website. Its a learning process for me, so I try and take any criticism as humbly as possible.

But these discussions with you and Greig are invaluable. Google and youtube can only go so far. Nothing beats discussing a topic.

Lean Startup by Eric Riles: $20 for the audio book, guess I have something to listen to while driving, thx :)
 

Greig Whitton

Active Member
Joined
Mar 12, 2014
Messages
99
As far as your pricing model is concerned, normally I would advocate a subscription approach for the recurring income. But your offering will probably have a very finite value period (i.e. just before, during, and immediately after a wedding). So maybe a once-off fee would be the better option.
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
As far as your pricing model is concerned, normally I would advocate a subscription approach for the recurring income. But your offering will probably have a very finite value period (i.e. just before, during, and immediately after a wedding). So maybe a once-off fee would be the better option.

I am trying to create a long term sustainable revenue stream with the below. Thats why I want to charge a monthly fee. But I here what you are saying regarding the finite value period. But during the process I am going to do my best to highlight to married couple that with their website they basically have a photo-album/ story book / everlasting memory that they can access from any phone/pc/ipad at any time anywhere in the world, hence the recurring fee.

Practically after doing this for lets say 10 couples and 7 out of ten cancel the subscription after the wedding date then I will change the pricing model.

Maybe the best solution is to increase the initial fee and only start charging the monthly fee after the wedding if they choose to keep the wedding website. How does that sound.:)
 

Ianf1

Expert Member
Joined
Aug 5, 2007
Messages
1,798
For the wedding website be sure to price in the Bridezilla factor and have the approval process as bullet proof as possible.
 

WebNexus

Active Member
Joined
Jul 10, 2014
Messages
51
As far as your pricing model is concerned, normally I would advocate a subscription approach for the recurring income. But your offering will probably have a very finite value period (i.e. just before, during, and immediately after a wedding). So maybe a once-off fee would be the better option.

Ok so I had another look at the pricing model and based off of our discussions I have decided to switch to a once off pricing model.

I also did a rework of the look and feel of the site. Let me know what you guys think. Saweddingwebsites.co.zasaweddingwebsites.co.za
 
Top