Online dating service

Finding love or friendship online is becoming increasingly popular for a generation of people too busy to find partners on their own.

Meanwhile, the well-documented rise in divorce rates is lining the pockets of lawyers. This odd combination translates into a viable business opportunity.

StartupSmart outlines what’s involved for an entrepreneur to survive the online dating scene.

What is it and who is it suited to?

Online dating is a dating system that allows individuals, couples and groups to communicate with each other over the internet, usually with the intent of developing romantic and/or physical relationships.

Online dating services generally require a prospective member to provide personal information before they can search the site’s database for other individuals using criteria they set such as age, gender, looks and interests.

Most sites allow members to upload photos of themselves and browse the photos of others. Sites may offer additional services such as webcasts, online chat, telephone chat and message boards.

Some sites provide free registration but may offer services that require a monthly fee. Other sites depend on advertising for their revenue.

Many sites are broad-based, with members coming from a variety of backgrounds looking for different types of relationships. Other sites are more specific, based on the type of members, interests, location or relationship desired.

If you wish to set up a prototype site, you can probably get by without strong IT and web development skills. But in the long-term, an online dating business definitely favours people who are experienced in IT and web development.

You also need to be the kind of person who understands what your members will want. As the owner of the site, it’s unlikely you’ll be talking to members directly, but you need to be able to empathise with them and maintain a subtle, tactful tone.

Rules and regulations

You don’t need a license to run a dating site. You aren’t obliged to meet or vet your clients, and once you have set up your agency there are no statutory checks on how it is run.

Research and competition

There are few physical requirements for setting up a dating website because all you really need is a computer.

You will, however, need to do a lot of market research before you launch your site. You might think you’ve found the perfect niche but a Google search might reveal that someone has beaten you to it.

It’s also worth going out and speaking to people to gauge whether your site would interest them. Singles nights and speed dating events are a good place to start.

To promote the venture, you may wish to advertise on specialist internet sites relevant to your target audience. For example, if you want to set up a music-based site, you may wish to place an advert on a music fan site.

If you’d prefer print-based advertising, local papers could be a great place to start, especially if your site is based around a particular geographical area.

If budgets are tight and you want some cost-effective publicity, try hosting a launch night for single people or sending out a press release.

Costs and earnings

A hosted website will probably have a one-off start-up cost, as well as credit card processing fees on each transaction and a monthly rental fee.

In addition to the hosting cost, you’ve also got to think about design fees. You will also have to register your domain name.

There are two main revenue streams for online dating sites: subscriptions from members and advertising. In both cases, the money you earn will be dependent on the number of clients you sign up, and it may pay to offer free trials to the first few users who express an interest.

Many sites maintain a sliding scale of payments, rewarding members who commit to a long subscription period.

Most sites will offer visitors the chance to make a one-off payment for their entire membership term or break it down into monthly direct debits.

As the owner of the business, one-off payments may be preferable because they guarantee 100% of the money up front. However, this may not sit well with all your customers.

An average day

Your day is largely centered around your customers, which means ensuring a high standard of customer care and providing constant contact. You must also ensure the site is fully operational at all times.

You may find the business is subject to seasonal fluctuations. December through to February is typically the busiest period for online dating as people enjoy a break from work and therefore have more time on their hands. This is something to keep in mind.

Useful contacts

Australian Chamber of Commerce and Industry

02 6273 2311

03 9668 9950

Australian Government Small Business Support Line

1800 777 27