This was brought home to me recently when I was drawing up a proposal for a client who plans to set up a new business networking group, or more accurately, a network of networking groups.  Our M.O. involves a lot of upfront business analysis, so it was clear that the optimum solution involved much more than a simple website with some card payments for bookings.

The business model involved 6-8 groups, each with 20-30 members attending a monthly meeting.  ‘Directors’ would be recruited to run each one, in return for a percentage of the profits.  Visitors would also be welcome; the incentives to pay for membership would include a reduced meeting fee, inclusion in an online business directory, and access to a private members forum.

My proposal had the web-based software running everything, from the regions containing the groups, down to an automatic reminder when people’s memberships were due to expire.  Members and visitors would be able to buy online, and members could amend their directory listing as required.  Directors could log in and view their delegate lists, and the system would calculate their commission each month.

A ‘back-of-an-Excel-sheet’ calculation showed that if they managed to fill 6 groups with 20 members, they’d make about £38K a year after venue fees and directors’ commission.  The cost of writing the software from the ground up came to just under £12,500; a third of their profits in their first full year.  Another way to look at it; if the website convinced 40 new members to sign up, it would have paid for itself.

I’m still not sure if they will go ahead with the system as specified or will ask us to chop out a lot of functionality in order to bring the price down.  The essential elements are the member directory, a payment option for visitors, and the forum – these things directly or indirectly bring in money. 

All the other things, such as membership payments, meeting and attendee management, director access, commission reporting and  membership reminders could be handled manually.  These are the things, of course, that will help the business to scale; for example, if members can sign up and pay online, you could double (or treble/quadruple) the membership without needing more staff to proccess them.

This is where we get back to the idea that websites reward ambition, because our £12,500 system would work equally well with 60 groups, each with 30 members (profit: £540K), or even 600 groups with 40 members each (profit: £7million).

I’ve seen our WebShop software turn over £10,000 for one client and £400,000 for another; the difference in the price they paid us was negligible.

That’s why my current focus is on finding ambitious clients who put the web at the centre of their plans.  They see that a really good site may cost them nearly as much, or maybe more, than an employee for a year, but that a) they only have to pay once, and b) their site can work harder than a human ever could.

So far, we’ve found several clients whose plans we could turbo charge with a hard-working website:

• The cruise holiday specialist whose site processes 60,000+ data items every day
• The sales recruiter who needed 40+ industry-specific sites to publicise different jobs
• The global travel network who needed social networking tools to facilitate communication between local experts and travellers
• The ultrasound manufacturer who needed a multi-lingual CMS to map the different products, technologies and applications they work with.
• The teacher training company whose website takes booking and manages their trainers – and who now have three times as many trainers as they did when we redeveloped their site

If you’d like to be added to the list, and have a cunning plan that involves the web, feel free to get in touch and see if we can help.

Now I see on TechCrunch that AT&T has bought Wayport, a US WiFi hotspot operator, in a $275 million deal.  I wonder if that will prove portentous for the UK, where mobile carriers are still trying to recoup their £22 BILLION investment in 3G licenses.  If the operating costs are significantly higher than WiFi, will we see the same thing in the UK?  And if so, who are the big players in the WiFi hotspot market?

The Cloud already provides a similar service for O2 and Orange (although they levy a monthly fee, unlike AT&T), while the others are either doing their own thing (T-Mobile) or ignoring WiFI altogether (Vodafone).  If WiFi continues to grow, while being much cheaper to support than 3G, will we see the incumbent carriers invest more heavily there?

Should be interesting to watch, in any case.