Are you interested in starting a social networking site for FREE? If YES, here is a complete guide to starting a social networking site from scratch with NO money and no experience.
Okay, so we have provided you an in-depth sample social networking site business plan template. We also took it further by analyzing and drafting a sample social networking site marketing plan backed up by actionable guerrilla marketing ideas for social networking companies. In this article, we will be considering all the requirements for starting a social network business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Why Start a Social Networking Site?
- Starting a Social Networking Site for FREE – Market Research and Feasibility
- Starting a Social Networking Site for FREE – Legal Issues
- Writing a Business Plan for your Social Networking Site
- Detailed Cost Analysis for Starting a Social Networking Site
- Starting a Social Networking Site – Technical and Manpower Requirements
- Starting a Social Networking Site for FREE – The Marketing Plan
- Tips for Running a Social Networking Site Successfully
Why Start a Social Networking Site?
The world networked population has grown from millions to billions. Social networking have become a fact and necessity of life for individuals worldwide, it involves many actors and users such as the regular citizens, activists, non-governmental organizations, telecommunication providers, software developers, government etc.
The emergence of worldwide telecommunication via the internet have transformed the world into “a global village”, creating ties among individuals who do not share any relationship nor know of each other existence prior to the coming of the internet age. The internet undertakes a wide range of functions such as entertainment, shopping, banking, educational and also a source of livelihood for many individuals.
One of the greatest things about the internet is that nobody really owns it. It is a global collection of networks both big and small. These networks connect together in many different ways to form the single entity that we know as the internet.
Social media continues to expand and change with new applications appearing every day. It indefinable nature speaks to its ability to transform how we think, engages, sell, buy, create and live in the digital age. Utilizing social media to its fullest potential can propel a business to the next level, if done correctly. Yet the world of social media is still new to many people and is constantly evolving.
Starting a Social Networking Site from Scratch for FREE – A Complete Guide
- Social Network Industry Overview
Just because there are a lot of social networking sites on the Web doesn’t mean the well is dry. In fact, someone may come up with a brilliant idea and implementation of a social networking site tomorrow and become the next great innovator of Web 2.0. That someone might be you.
The growth of social media has been enormous over the past few years and with more and more people now connecting online, it comes as no surprise that users are beginning to actively search for new, unique or niche social platforms to use. Consumers today are also more tech savvy than ever before; they are continually on the quest for the latest tools to help them engage in content sharing, and this level of demand is showing no sign of slowing down.
- Interesting Statistics About the Social Networking Industry
Of the 7.2 billion people on earth, 3 billion have Internet access; 2.1 billion are active on social media; and 1.7 billion use social networks from a mobile device. The number of worldwide social media users is expected to reach 2.5 billion by 2018. The average social media user maintains five accounts. Mothers with children under the age of five are the most active on social media. 90% of young adults (ages 18 to 29) use social media. 35% of those over age 65 do.
Recently, social networking has demonstrated a clear shift towards mobile platforms. Smartphone and tablet apps as well as mobile web access have facilitated Twitter’s constant presence. In addition they have heightened the profile of location-based services like Foursquare and enabled users to comfortably access visual blogging sites including Tumblr and Pinterest via tablet.
But the undeniable leader of mobile social networking is, once again, Facebook. As of the first quarter of 2015, some 580 million Facebook users accessed the social network exclusively via mobile device, up from 341 million users in the corresponding quarter of the previous year. Furthermore, according to industry experts, in a few years most interactions on Facebook will be conducted from a mobile device.
Starting a Social Networking Site for FREE – Market Research and Feasibility
- Demographics and Psychographics
Yes, everyone you know use the social network, either for fun, connecting to friends and loved one and for business purposes, even the white house and other powerful government establishment use the social networks. Below is a composition of users of social network platforms;
- Non-governmental organization
- Government offices and agencies
List of Niche ideas Within the Social Networking Industry That You Can Specialize in
There are at least seven niches in social networking you can tap into and build your platform upon;
- Social connections
- Multimedia Sharing
The Level of Competition in the Social Networking Industry
Players in the Social Media industry are still very young; however, a few stylized facts about these players seem to have emerged in the last few years. First, it seems like the companies in the Social Media industry all compete to present content in a manner that will generate the highest level of user interest, and subsequently, lead to increased user engagement. This is because user engagement ultimately is the most valuable revenue generating source.
Users tend to stay on Social Media platforms based on engagement and relevance. Perhaps this is one of the reasons why a decade ago, Myspace and Friendster were popular platforms, which later had to give their sought-after positions to modern-day giants like Facebook and Twitter.
The Social Media industry is currently rife with mergers and acquisition. The biggest acquisition to date is that of What Sapp. Facebook acquired the messaging app for $19 billion in February 2014. The international Social Media industry players have also been acquiring companies left, right, and center: Japanese internet giant, Rakuten acquired Viber for $900 million in 2014. Alibaba acquired an 18% stake in Chinese Twitter-like service Weibo, followed by a 20-25% stake in a popular chat-app by the name of Tango in 2014.
List of Well-Known Brands in the Social Networking Industry
There are several players in the social network industry, and their size is dependent on the number of users and the number of visits recorded daily;
- Google plus
Social media industry came into existence about 10 years ago when chat messengers that allowed people to communicate and share content with each other surfaced on the internet. Now, the industry houses Facebook and Twitter under its umbrella. The popularity of these platforms has caused the advertisement industry to focus on strategically placing ads on these platforms, which has changed the media industry.
Players in the social media industry rely on increasing their respective user bases and then successfully monetizing it through digital advertisements. However, successful monetization hinges upon a platform’s ability to engage its users. The biggest US-based social media industry players include Facebook, Twitter, Pinterest, Pandora, and LinkedIn. Non-US based players who happen to have a huge user base include China-based TENCENT HOLDINGS ADR (TCEHY) and SINA Corp. (SINA), and Russia-based social network called Vkontakte.
Is a Social Networking Site Worth Starting from Scratch or is Buying a Franchise Better?
The best you can do for yourself is to build the business from scratch and build the structure for yourself and by yourself. So also, this business have no form of franchise but you can buy a startup and develop the start-up, if you are to buy an already established company then you should be ready to cough out millions of dollars.
Possible Challenges and Threats You Will Face When Starting a Social Network from Scratch
- Which service to provide
- What to charge
- Getting clients
Starting a Social Networking Site for FREE – Legal Issues
- Best legal entity to use for a social network site
Like any other business endeavor, a social network brings up a variety of legal issues. Here are just a few that you’ll need to consider:
Social networks can take a great deal of capital to get off the ground. Will you be looking for investors? Hitting up family or friends for loans? Documenting these financial contributions, and determining whether people are entitled to “a piece of the action,” involves securities and valuation issues. You’ll want to choose a legal entity that will own the social network. Which form of business should you be? That depends on your financial plans and exit strategy.
How will you collect and then use data from users? This brings up a host of privacy issues–both in terms of sharing email addresses, as well as data security issues if you take credit cards, store Social Security numbers or collect other private information on your site.
If your social network is a playground, what kind of referee will you be? Users want to know there are “rules of the road” and what kind of treatment they can expect in your playground. If yours will be a social network for “haters” and I’m a pacifist, I’ll want to know that before I join. That’s where your site’s terms and conditions come in handy.
And then there’s the competition. First of all (and this is not strictly a legal issue), how will you distinguish your social network from the many others that are out there? If you don’t have a clear and differentiated value proposition, you’re unlikely to win people over versus the more known and popular sites already available. Second, if you’re a copycat network, you do run the risk of being sued, especially if your logos and design are similar to those that already exist and have achieved some prominence.
Those are some initial thoughts. If you’re serious about getting this started, and it’s not just a pipe dream, you’ll want to flesh out your plans to take full account of the competition, and consult with a business attorney who is familiar with doing business and creating networks online. Investors in particular will want to see that you have weighed all of the risk factors carefully before they pony up their cash.
Catchy Business Name ideas for a Social Networking Site
This is going to be a very important part of your business and defines the line as well as the business. In some cases, you may consider your own name to be sufficient. In others, you might like a boring company name, like Bebo, and have an exciting name that can easily be remembered and pronounced by the users, such as Friendster. Here are interesting names for your social network;
- This Connect
- Together Us
The Best Insurance Needed for a Social Network Site
As a social media expert, you know the value of concise, relevant information. In that spirit, here’s a quick guide to the most relevant insurance policies for your business. The following are the types of insurance cover for your business; General Liability Insurance, Property Insurance, Business Owner’s Policy, Workers’ Compensation Insurance, Errors and Omissions Insurance, Umbrella Insurance, Cyber Liability Insurance, and Commercial Auto Insurance.
General Liability Insurance is one of the most fundamental insurance policies for your social media business. Many of the contracts your business signs will require this business insurance, because it protects you against a number of common liabilities. This insurance protects your business from lawsuits filed by third parties who allege your business; damaged their property, harmed their reputation, caused bodily injury, infringed on a copyright and committed libel or slander.
Because you’re a media business, you should pay attention to the media-relevant protection this insurance offers. Your business is more susceptible to these slander, libel, advertising injury, and copyright lawsuits. Your General Liability Insurance will offer you protection from the costs associated with them, including lawyers’ fees, court costs, settlements, judgments, and others.
Whether you own or lease your property, this insurance can help you recover when it’s lost or damaged by fire, theft, vandalism, or a covered weather event. Not all weather events are covered by Property Insurance. Covered events vary from policy to policy and may depend on the liabilities of your region.
If your business starts a fire that spreads to your neighbors, ruining your offices and damaging the building, Property Insurance can pay the tremendous bill when it arrives.
Intellectual Property Protection and Trademark
You can protect your business name and design with a trademark, Start by doing a search in the US Patent and Trademark database to make sure the name is not already trademarked. Register your business name with your city or county clerk and obtain a business license from your local government office. In this form of business, your business is the most important aspect as anybody will be ready to take up your name as soon as they discover the name is becoming popular and the business is booming.
Is Professional Certification Needed to Start a Social Networking Site?
There are several form of professional certification to run as a social network professional. Therefore, it is important to know which is better for you.
For marketing or communications managers with three to five years of experience in social media, Hootsuite and S.I. Newhouse School of Public Communications offer an advanced social media strategy certificate. The program, which costs $2,200, includes 15 modules that cover the entire social media ecosystem.
Students will explore the social media landscape at a strategic level and understand the role of social media in their organization. The professional certification from an accredited university has been earned by digital marketers and social media specialists at Coors Light, KPMG Canada, Sony Pictures, the U.S. Small Business Administration and others.
List of Legal Documents You Need to Run a Social Networking Business
These are some of the basic legal document that you are expected to have in place if you want to start a social networking business in the united states of America;
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Memorandum of Understanding (MoU)
- Employment Agreement (offer letters)
- Operating Agreement
- Company Bylaws
- Operating Agreement for LLCs
- Insurance Policy
Writing a Business Plan for your Social Networking Site
If you are planning towards floating a social networking business, then one of the first steps that you are expected to take is to consult experts to help you write a good and workable business plan. The truth is that, in order to successfully run a worm farm, you would need to have a good business plan in place.
A Business plan is the blue print that is needed to successfully run a business; with a workable business plan in place, you will reduce the trial and error approach of doing business. You will be able to manage your business with purpose and perhaps precisions; you will know what to do per time and how to handle challenges, growth and expansion.
So if you want to start a social network, you are required to write a detailed business plan that can pass reality test when subjected to it; you should work with the facts, figures and other indices in the worm farming industry as it applies to the country you intend starting the business.
The whole idea of writing a business plan is not just for the sake of having a business document in place; but a detail guide on how to effectively run your business from the scratch. Your business plan should outline and cover strategies on how you intend to manage and grow your social network. The rule of thumb in writing a business plan is to try as much as possible to be realistic and never to over project when putting figures on income and profits et al. As a matter of fact, it is safer to underestimate when writing a business plan so that you won’t be so disappointed when reality sets in.
The Service Process Involved in a Social Network
Your first consideration for your social networking site should be its focus. Without a focus, your site will just be a mishmash of Web services and features. While your site may have engaging applications and a snazzy look, it won’t make a big impact on your users without that initial focus.
Do you want your site to be a general-purpose social networking community? If so, that means you’ll be going head-to-head with some of the most popular Web sites on the Internet. Giants like Facebook and MySpace dominate the social networking space in the United States. In other countries you’ll go up against sites like orkut (in Brazil), Bebo (in the united kingdom and Ireland) or Hi5 (in China). These sites not only have several years’ head start, they also have millions of members.
Another option is to create a site around a particular hobby or activity. Giving your site a central theme may help it through the initial launch and inevitable growing pains as you gather an audience. And by choosing a theme, you’ll attract users who are already interested in the subject matter. Interested users are engaged users. That means they’re more likely to contribute to the community and stick around. If there’s nothing interesting for your users to do they’ll just leave.
Let’s say you’ve got the perfect theme in mind for your social network. There’s a potential audience out there on the Web just waiting for a community that caters to their interests. What do you do next?
Make a list of the features your site will offer. This should include everything from member profile pages to any message boards or messaging services you plan to include. You may have to buy these features from a vendor or build them yourself. Some may even be available in a free, open-source format. Resist the temptation to include everything — your site will become a chaotic mess if you do that. Instead, choose the elements that best fit your theme and work from there.
You’ll need a host for your Web site, too. If you expect your site to grow quickly, you’re going to need a host that will provide enough storage and bandwidth to meet your needs. For the most part, hosting on the Web isn’t free. Assuming you aren’t lucky enough to find someone willing to donate hosting services, you’re going to need to put money on your mind.
Detailed Cost Analysis for Starting a Social Networking Site
- The Total Fee for incorporating the Business in United States of America – $750.
- The budget for Insurance, permits and license – $5,000
- The Amount needed to rent a suitable facility with enough space in the United States of America (Re – Construction of the facility inclusive) – $50,000.
- The Cost of Launching an official Website – $0700
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Other miscellaneous – $1,000
Going by the report from our research and feasibility studies, we will need about $75,000 to set up a small scale social networking business in the United States of America.
On the average, you would need over 200,000 US dollars to start a medium scale social networking business in the United States of America. If you choose to start a large scale social networking business, then you should look towards budgeting about 2 million US dollars and above. This money include scientists that will be on your employee / payroll.
- Financing your Social Networking Business
Financing for social network websites is a challenge. You have a chicken and egg problem. You need money to grow and get traction. But in order to get investors, you need to show that your social network membership is increasing exponentially. And that these members want to buy services or products in the niche.
One way to raise money for your site is to seek out venture capital (VC). A venture capitalist is a person or organization that invests money into new businesses in the hopes that the business will succeed and return a profit to the investors. Many Web sites got their start via an initial VC boost that propelled them into success. A few, like the messaging service Twitter, have survived mainly on VC without any other real business plan.
Only a small percentage of startup businesses ever receive VC. You may either have to supply the capital you need to launch your site on your own or seek a loan from a more conventional source. Every approach carries with it some risk. You should give careful consideration to every move you make before committing — make sure you can cover costs if the site takes longer to succeed than you’d planned.
Twitter became famous for not only being a popular social Web service, but also for lacking a business plan. Twitter stays afloat mainly through seeking rounds of VC. But that’s not necessarily the best approach for the average business. You should take some time to formulate a business plan. How will your site make enough money to sustain itself or even turn a profit? This isn’t an easy question — even giant sites like YouTube still struggle with the answers. But if you don’t spend time thinking about how your site will generate at least enough money to cover costs, your new project will have a very short shelf life.
It’s also important to remember that business plans aren’t set in stone. As time passes, you’ll find it necessary to revisit your business plan and make adjustments. You may find that Web advertising is your best bet at generating revenue. Or you might develop an application platform for Web developers and charge them a small fee to incorporate their apps into your site. It’s important to keep an open mind and remain flexible.
Definitely to succeed in this business, you are to situate your business in a silicon valley where there are policies and an enabling environment that allows for your type of business without any hassles and obstacles. If the rent or lease at Silicon Valley is too expensive then you should look for a conducive office space and run your servers from there.
Starting a Social Networking Site – Technical and Manpower Requirements
This is a web based business and you will need to have the best programmers, coders and graphic designers that will make things easy. But if you cannot afford an in house professional programmer and coder, then you can outsource the job needs.
Starting a Social Networking Site for FREE – The Marketing Plan
- Marketing ideas and strategies for a Social Network
A social media marketing plan is the summary of everything you plan to do and hope to achieve for your business using social networks. This plan should comprise an audit of where your accounts are today, goals for where you want them to be in the near future, and all the tools you want to use to get there.
In general, the more specific you can get with your plan, the more effective you’ll be in its implementation. Try and keep it concise and don’t make your social media marketing strategy so lofty and broad that it’s unattainable. This plan will guide your actions, but it will also be a measure by which you determine whether you’re succeeding or failing at social media. You don’t want to set yourself up for failure from the outset.
The first step to any social media marketing strategy is to establish objectives and goals that you hope to achieve. Having these objectives also allows you to quickly react when social media campaigns are not meeting your expectations. Without these goals, you have no means of gauging your success and no means of proving your return on investment.
These goals should be aligned with your broader marketing strategy, so that your social media efforts all drive towards business objectives. If your social media marketing strategy is shown to drive business goals forward, you’re more likely to get executive buy-in and investment.
They should also go beyond vanity metrics like retweets or Likes, in favor of more advanced metrics like leads generated, sentiment or website traffic referred. Strive to approach these goals using the SMART approach, meaning they should all be specific, measurable, attainable, relevant and time-bound.
A simple way to start your social media marketing plan is by writing down at least three social media goals. Make sure to ask yourself what the goal will look like when completed, and use that to determine how you will track it.
Possible Competitive Strategies for Winning your Competitors
Think about your competition broadly. People may not have a social network to interact as you plan, but they are online and interacting already. Consider forums, question and answer sites, social sharing sites, and general networks all to be part of your competition.
Carefully profile your most direct competition. Have someone on your team join and interact there. Understand their strengths and weaknesses. Create a table that compares major features and costs of the competition. Study their revenue streams. Make a list of advertisers on this site. These same people may wish to advertise with you, or even sponsor parts of your site as well.
Strategies to Boost your Social Network Brand Awareness and Corporate identity
Successful business owners know that generating lucrative sales goes beyond having a product to sell. The success of your business also relies on how effective you are in creating greater visibility and awareness for your brand, products or services with targeted customers. Those with huge marketing budgets can go for the traditional route and spend a fortune advertising on radio, TV and print collaterals.
In a rapidly evolving digital age, businesses can get the same or even better visibility and exposure for their brands through digital marketing channels – foremost of which is social media – at the fraction of the cost traditional media requires.
Creating greater awareness for your brand can be a bit challenging particularly for small and medium businesses, but emerging social media platforms can help level the playing field – giving your business potential access to more than 2.046 billion active social media accounts.
Creating a Supplier / Distribution Network for your Social Media Site
One very important area in the social network industry is for you to be able to break through the existing market. As a newbie in the industry, you should come up with a good marketing strategy to gain your own fair share of the market – the truth is that the makeup industry is highly competitive and it requires consistency to establish your brand.
In the online social networking industry, the main supplier to a social networking site is the visitors who visit social networks. The importance of visitors as suppliers is due to the determination of visitors that how attractive the site is to likely advertisers.
In contrast, other kinds of suppliers that provide the server hardware, software, or network bandwidth to the site play a comparatively less important role. In this way, it could be said that the power of suppliers in the industry is low.
Tips for Running a Social Networking Site Successfully
If you get it right, this business can launch you into the world richest and most popular, and you can retire early or sell part of the business and retain a larger percentage. Starting a social networking site is a big job. You’ll have to build a foundation for an online community and then respond to its needs as it grows.
It’s almost a guarantee that your users will begin to ask for things you never considered when you first sat down with your idea. But if you stick with it and really put in the effort, you may find that a social networking site can be a rewarding project.