Lead Generation Service

How Profitable Is A Lead Generation Service? (Updated for 2024)

Pat Walls

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Updated: October 6th, 2024

How Profitable Is A Lead Generation Service? (Updated for 2024)

So you want to start a lead generation service?

And the first question that came to your mind was, “well, are lead generation services actually profitable?”

With a market size of $2.76B - there’s plenty of business to go around.

Especially considering:

You could start a lead generation service with as low as $50
Based on our data, lead generation services generate an average of $3.45M per year

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a lead generation service.

Let’s dive in!

Is a lead generation service profitable?

Yes, a lead generation service is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $3.45M per year with an estimated gross margin of 90%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your lead generation service.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your lead generation service is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a lead generation service worth it?

If you’re wondering if a lead generation service is worth it, the answer is a big YES. With lead generation services, you have the potential to earn $3.45M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $2.76B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a lead generation service to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful lead generation services case studies.

Examples Of Profitable Lead Generation Services

Here are a few examples of profitable lead generation services, and a few more details about them:

1. Instantly AI ($19.2M/year)

The co-founders developed the tool out of necessity for their lead generation agency. Initially, they used existing tools to help their customers generate leads. However, as they scaled, the cost of using these tools, which required payment per email account, became unsustainable.

In response, they decided to create their own tool, utilizing the skills of their developer. Initially, the tool was intended for internal use. However, after discussing it with others, they recognized its unique value and its potential to benefit many similar businesses.

We noticed that as soon as we tried to scale, the prices increased instead of decreasing. — Kaevand Co-founder Instantly; (Source)

Is it profitable? Yes
How much money it makes: $19.2M/year

How Nils Schneider Bootstrapped Instantly.ai to $20M ARR in 2 Years

Discover how Instantly.ai grew from 0 to $2.4M in just 9 months by solving the problem of costly lead-generation tools for marketers with an affordable and effective AI-powered email marketing software.

Read this case study

Read by 1,040 founders

2. Wealth Lead Generation ($120K/year)

Maria, the founder of Wealth Lead Generation, came up with the idea for her business through her experience as a freelancer and her passion for marketing. After successfully helping a fintech startup raise 7 figures through social media advertising and PR, she realized the potential of digital advertising and decided to start her agency. She focused on creating specific offers that addressed the pain points of her target audience and spent time listening to the market to refine her services. Through hard work and perseverance, Maria's agency quickly scaled to a team of 5 and achieved impressive revenue growth.

Is it profitable? Yes
How much money it makes: $120K/year
How much did it cost to start: $200

After 'Accidentally' Landing Multiple Clients, I Validated And Launched My Own Digital Advertising Agency [$120K/Year]

"Wealth Lead Generation grew from a side hustle to a 6-figure business in 2021, generating an average of 250% increase in revenue for their clients through digital advertising campaigns on social media with a team of 5 people."

Read this case study

Read by 3,328 founders

3. Franchise UK ($600K/year)

Joel Bissitt, founder of Franchise UK, had always dreamt of being an entrepreneur. Drawing inspiration from UK business icons like Richard Branson and Alan Sugar, he started the business at the age of 19 with just £1000 of funding. Through his expertise in SEO and a user-friendly website design, Franchise UK has experienced rapid growth, achieving a 50% increase in turnover last year and attracting some of the world's largest brands.

Is it profitable? Yes
How much money it makes: $600K/year
How much did it cost to start: $1K

How I Started The UK’s Largest Franchise Directory And Make $600K/Year

Franchise UK is the UK’s largest franchise directory helping franchise businesses to grow by generating quality franchisee recruitment leads online, with a 50% increase in turnover last year and big plans to further expand in different directions over the coming years.

Read this case study

Read by 5,478 founders

Learn more about starting a lead generation service:

Where to start?

-> How much does it cost to start a lead generation service?
-> Pros and cons of a lead generation service

Need inspiration?

-> Other lead generation service success stories
-> Marketing ideas for a lead generation service

Other resources

How much can you make with a lead generation service?

With a lead generation service, you can make an average of $3.45M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $50. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a lead generation service make a week?

Based on our data, average weekly revenue for a lead generation service ranges around $71.9K. As such, you could see monthly revenues of $287K.

To know if your lead generation service achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your lead generation service.

How much do lead generation services owners make?

The income of a lead generation service owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established lead generation service is about $71.9K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a lead generation service owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Lead Generation Service Profit Margins

Generally speaking, a lead generation service can expect profit margin of around 90%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a lead generation service, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, lead generation service owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, lead generation service owners can ensure long-term sustainability and profitability for their business.

Lead generation service owner salary

The salary of a lead generation service owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established lead generation service, in a prime position, might see an average weekly salary around the ballpark of $64.7K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a lead generation service may be a promising business to start - but the success of your lead generation service mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable lead generation service.

Part of

Starting A Lead Generation Service: Everything You Need To Know

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