What up STM,
I am wondering what/if anyone has written a "business plan" for their Affiliate business. I am in the process of writing one for potential investors. Basically I there are a couple people interested in giving me capital to run campaigns, but want to see a prospectus or executive summary.
some factors that I'm considering would be just listing some stages of a campaign process:
$$ for data collection
$$ for traffic sources
$$ money to optimize and scale
$$ money to allocate to new campaigns
% re-invested into testing new campaigns
I'm not looking for anyone's template/process/their plan or anything like that. Just wondering if anyone has done this before, reached out and gotten start up money?
right now I'm leaning towards presenting it as a Lead Gen Business for specific niches and modelling it that way for investors, as what we know to be affiliate marketing isn't that commonly known/valued to people outside of the digital advertising world.
Any thoughts/comments/experiences with this?
Once I have something on paper I'd be happy to share with others looking to do the same.
- D.
how can you write a business plan when you can't predict what your ROI will be and how much traffic you can get? it just doesn't make any sense to me. Today you can be getting 100s of leads with a ROI of 50%, tommorow your traffic might not be good enough for the advertiser and you will be capped.
I've seen quite a few threads of this nature over at WF before. As mentioned above one of the key issues (that i'm sure the investor is mostly un-aware of) is the ability to maintain campaigns and predict returns especially when you don't have current winners that require more capital.
If I was going to fork over any of my own cash (maybe this perspective will help) I wouldn't give it to some one who is essentially a day trader and has no longterm growth strategy other than trying to generate profit based on their own abilities. I would need to see some sort of asset at the end of the day. Something like a membership site, a branded offer, an email list, etc.
Not knocking ya and I'm sure plenty of people have gotten a little start up capital in this biz plenty of times but the vast majority of AM's use credit cards etc. for startup cash.
I'm no business guru and I'm only commenting from my own experience here.... but, if you're writing up a business plan, basically the bank want to see a healthy business on paper at least, and as mentioned above it would be difficult to put figures in with any degree of certainty, however saying that, most new start ups can only give a finger in the air type of prediction any how, so you'll be no different in that respect, as long as you can give some hard evidence based upon your market research and you can explain in laymans terms what you're trying to do.
Most banks are surprisingly not that interested in how much money you make, as long as it looks a realistic projection and you predict a profit within the medium term of trading, what they are looking for is a balance between a solid business has the potential to become a long term customer, with a business that will earn them revenue, mainly through overdraft facilities and the like.
Often the bank manager will be taking the decisions based upon what information he has, which includes credit history etc, but also a gut felling of how he feels about the applicants, If you can demonstrate that you have the makings of solid business, do not bullshit them and request their help in terms of overdrafts/loans for cashflow purposes, then you have as good a chance as any start up.
However as @scotchsales alludes to above it's cheaper money if you have access to a credit card even if you're on monthly payments (dependant upon adspend/spending limit). If the banks agree to some sort of facility, don;'t go bitchin' at them when they are dipping in your pocket each month because you were going into or beyond your overdraft limit
Just as an aside, not sure whether you're based in the states, but I read recently they're $billions of grants offered for new startup that haven't been taken up, can't remember where I saw it, but that's an option you can also persue, good luck man!
Yeah I agree with what you guys are saying, and that is where I was a little stuck also. But I was also thinking that there are a shit ton of companies out there that are SEM, SEO, Mobile Marketing, etc.. who all got start up funding and I'm sure have a business plan with metrics and the like. I'm sure part of that has to deal with getting paid by clients to do their marketing, but they also need to present to clients the expected ROI for them to use their agency, so I'm sure that there are some ways to go about this, I just don't know what they are, and was reaching out to see if anyone else had experience doing so.
I agree tho 100% with what both of you said, but in every business there is uncertainty, just do a different extent and means. You start a retail store you how can really forecast ROI because you don't know how steady your customer base will be, if they'll like your products, if 15 other stores are going to pop up around you in the next 6-12 months, etc... Now I'm not trying to start a debate about retail store business plans, or anything and, I'm sure there are specific to each industry, and challenges and tools used to forecast and overcome the inconsistencies or help narrow in on more concrete ways to predict ROI. Because while there are unstable factors, there can be scenarios put in place to help balance them out, i.e. the leads getting capped, say to 100 a day. You could run that offer at 10 different networks, and spread out the traffic to make more money (not a perfect example, just trying to illustrate).
Most start ups receive funding on the belief in that person & product, not just product. So you kind of have to rely on the person's skills and abilities over the actual product. Not saying it's only the person, but there are tons of people with the same idea, and most of the time what separates the success/failure is the abilities, mindsets, and vision of that person to make that idea/product better/successful.
I do agree tho with the points you guys mentioned which is why I started this thread and asked the question haha. Thank you for the advice, learned a lot from reading your previous posts as well.
- D
Just saw that last post... yeah I'm not really talking about going the route of banks/angels and such, just some friends with money that would be willing to invest just would want to see an executive summary or quick prospectus... not a full blown business plan (hence the quotes "business plan").
Run some numbers through your own funnel and establish a solid dpl, so you can have some degree of predictability.