If you’re starting a new job board, you’ve hopefully been making use of Careerleaf’s resources for job boards, and now you’re starting to think about how you’ll price your services.
To do this, you’ll need to know your overall costs and your business model, including what products or services you’re selling, and any other sources of revenue.
Many entrepreneurs may start off with dollar signs in their eyes, dreaming of all the cash they’ll have once they get their new business off the ground. The reality is many businesses take the time to become really profitable, so it’s important to set milestone goals for you to meet along your journey.
- Your First Sale – The first goal is proving out your business idea by making a sale, or a few initial sales, and learning from those early customers. Was the price right? Did they get what they wanted? Will they recommend your services to other people? You might experiment a little during this early stage to find the prices that match the value your customers expect and experience.
- Break Even – The second milestone is making enough money to cover your costs. How much do you spend to operate your job board in the first place? What do your monthly costs for software, hosting, marketing tools, and hours of labour (yours or that of an employee or contractor) add up to?
- Make a Profit – The third goal is generating enough revenue to cover your operating costs and make a profit. Once you’re profitable, you may invest that profit into growing the business further.
Keep in mind that you might adjust your business model or change it altogether down the line if you find customers are asking for something else, or you discover another way to go that’s more profitable. Here are a few business models we’ve seen job boards use and questions you need to think about for each.
Selling Job Posts: In this scenario, you’re selling job postings to employers and recruiters. Add-on products might include featured job posts, featured employer listings, and candidate/resume search access. You’ll want to find out what your competitors are charging, and how your perceived value may differ. You’ll need to figure out the following:
- How much should each product cost?
- How many of each product do I think I can sell every month?
Freemium Model: Many job board entrepreneurs use a “freemium” business model to gain traction in their market, and to help build their candidate and customer databases. In this model, you may sell basic job posts for free but charge for premium items like featured listings and candidate access.
- How many premium sales do I think I can make every month?
- At what price should I sell my premium services?
- Do I want to start out with a freemium model as a promotional effort and phase out free products once I’ve built up job seeker traffic and a solid customer base?
Recruiting Services: In this model, you could charge employers to post jobs (or even let them post for free) but upsell them on your recruiting services. Your recruiting services are a “premium product” priced much higher than a regular job posting. Your recruiting services might include writing and publishing job posts on their behalf, finding candidates and screening applicants, etc.
- How many recruiting clients or job requisitions can I acquire each month?
- How should I price my recruiting services? Should I offer different tiers of service at different price points?
Ads & Pay-per-Click Revenue: If you plan to base your revenue on display advertisements and/or job backfills from providers who pay per click, you’ll need to look at what the backfill provider pays for each click and what your advertisers will pay per click or impression.
- How many jobs do I need to publish to meet revenue goals?
- How many clicks needed to meet revenue goals?
- What level of traffic do I need to generate to get the number of job or ad clicks?
Mixed Model: Maybe you want to offer low-cost job postings, as well as higher priced featured listings or recruiting services. Or, perhaps you’d like to feature a few select employers and frame it as a sponsorship while generating revenue through backfills and candidate search. This could be a mix of any of the elements listed above, depending on what suits your market and meets your revenue goals.
- What revenue streams am I drawing on?
- How much revenue do I expect to generate from each?
- What are the number of sales, customers needed to support this model?
- What is the level of job seeker traffic, number of registered candidates, or number of applications per job needed to support this model?
Planning for Growth
As you solidify your business model and start to see some profit, you’ll want to consider how you will grow. Your strategies for growth may vary depending on how you generate revenue, whether it’s through product sales to employers/recruiters, through pay-per-click backfills, or a service-based approach.
Product Sales to Employers: In this model, your focus will likely be a balancing act by continuing to attract and engage the kind of talent your customers are looking for, while both adding new customers and retaining your existing ones. This might involve more outbound sales efforts targeting employers and/or inbound marketing towards candidates. It’s important to keep track of what kind of return on investment your different sales and marketing efforts yield, to make sure you’re being effective and whether or not you need to invest further in the labour involved in those efforts.
PPC or Ad Revenue: Since this model is largely dependent on job seeker traffic, you’ll want to focus on growing that traffic. You might do this through content, social media, and community-building, or a combination that includes paying for traffic. You may also want to leverage your traffic into direct sales from employers and encourage candidates to stay connected to you through job alerts, newsletters, or building candidate profiles on your board.
Service-Based Approach: If your main revenue source is focused on services like recruiting, your growth may depend on how quickly and efficiently you can perform those services – getting the right candidates in good time. The cost of labour you or your employees put into the business is a big factor, and having tools and processes that help you do the job efficiently is as important as your recruiting expertise.
With any of these models, it’s important to consider how investment in growth may impact costs and keep track of how much return in revenue you’ll net out.
Most entrepreneurs who have researched their target market and their competitors will have a sense of what pricing is expected or normal, but there are still many possibilities and ways to innovate and profit that are worth exploring.