How to Start a Lead Generation Business (Updated)

William Cannon
Last updated on December 2, 2022
How to start a lead generation business
Table of Contents

A lead generation business is a legitimate way to generate revenue without selling a product. It provides a service to other companies, finding qualified leads and passing them along for a commission. Interested in learning how to start a lead generation business? Continue reading this guide covering everything you need to know, including the following:

  • What is a lead generation business?
  • How to start a lead generation business in 6 steps
  • 5 methods to generate leads for your clients
  • Must have tools for any lead generation business
  • Frequently asked questions

Let’s get started.

Quick Links:

  1. What is a Lead Generation Business?
  2. How to Start a Lead Generation Business in 6 Steps
  3. 5 Methods to Generate Leads for Your Clients
  4. Must-Have Tools for Any Lead Generation Business
  5. FAQs About Starting a Lead Generation Business
  6. What You Need to Remember About How to Start a Lead Generation Business

What is a Lead Generation Business?

A lead generation business identifies and passes along prospective customers to other companies. In exchange, you get a commission, like a finder’s fee. A lead generation business is a company that helps other companies grow–a broker.

B2B lead generation companies work differently from affiliate marketers, and the leads you find need only to meet certain criteria. This differs from affiliate marketing, which requires the lead to make an actual purchase.

Companies use lead generation businesses because they don’t have time to focus on customer acquisition. By outsourcing, they can consistently bring in leads while allocating their resources to more important tasks and workflows.

You’ll make a lot of money if you can acquire qualified leads every month for your clients. The best part is you don’t need to spend time engaging these prospects; you’re simply passing them off to businesses. Nor do you need a product to sell. 

These are minimal expenses for consistent revenue.  

How to Start a Lead Generation Business in 6 Steps

Starting a lead generation business is a complex process. You must address several key issues, such as the source and quality of your leads. You also need to outline how you’ll get clients and how much you’ll charge them.

Below is an outlined six-step approach you can use to answer these questions.  You can put the building blocks in place to start a lead generation business and use it as a tool to guide you through the process.

Step 1: Choose a Niche and Target Audience

 The first step is to hone in on what type of products or services you hope to sell. You need to identify a niche and a corresponding target audience. Achieving success in the B2B lead generation space is about providing a high-quality service to your clients.

To identify a suitable niche for your lead generation business, consider these questions:

  • How strong is your knowledge of the industry and market?
  • What value can you offer your clients? What are the long-term value (LTV) and margins expected from your leads?
  • What’s the competition like? How high or low is the barrier of entry?
  • How saturated is the market?

The four points above are ordered based on priority. The first consideration should be your expertise. Do you have extensive knowledge in any areas, markets, and industries? Maybe you don’t have any right now, but you could see yourself exploring in the future.

Of the niches that you have or intend to have expertise in, pick the ones with the following:

  • Least competition
  • Not saturated yet
  • Highest potential commissions

The more specific a niche, the less competition it’ll have. This presents a greater opportunity than more general categories. Car insurance has more potential than just finance or even insurance. You need to specialize in something specific before you expand into other niches.

Niches can also be related to your geographical area. Many lead generation businesses specialize in local lead generation,  targeting niches like lawn mowing and landscaping. SaaS tools are also a good niche to target, and SaaS lead generation is popular online.   

Step 2: Develop Your Strategy

The next step is to create a plan for your business. This document will outline several vital elements of your lead generation company, such as:

  • How you’ll find and deliver quality leads to your clients
  • How you’ll discover clients
  • What your pricing/commission structure will be

Those three aspects are listed based on importance. Your leads are the most crucial factor of your company, and it’s what you’re selling as a service, so it must be prioritized. To find the best leads, you must find quality lead sources.

There are several sources from which you can acquire leads. The niche, industry, and products and services you’re targeting will influence which source you’ll use. Some examples include:

  • List Brokers
  • LinkedIn
  • Facebook
  • Instagram
  • Paid ads
  • Search engine optimization (SEO)
  • Cold email outreach

A lead broker— a lead finder or data provider—has access to a sizeable B2B contact database. Search filters can sort and sift through the database and build targeted prospect lists. These are the leads that you sell to your clients.

UpLead is one great example of a B2B data provider. It has a database with over 85+ million B2B email addresses and a 95% data accuracy guarantee. You can find the best quality leads with 50+ search filters, technology tracking, firmographic data, and real-time email verification.

You’ll also need to find some clients that’ll buy your leads. Since you already know the industry, niche, and products and services you’re targeting, uncovering potential clients should be easy.

Start by making a list of companies in your niche. Use LinkedIn or a data provider like UpLead to find sales and demand generation decision-makers. These are the employees that you should talk to about buying your leads.

Lastly, you need to define the compensation you’ll receive for your leads. Spend some time identifying your leads’ average LTV (long-term value). This will help you to negotiate a better deal. The commission agreement should cover the following things:

  • How much you’re paid per lead
  • Details about evaluating the lead quality
  • Payment schedule
  • Any performance-based clauses

For reference, a product with an LVT of $100,000+ usually offers a per-lead fee between $100 and $500. There are standard rates in most industries and niches, so do your research.      

Step 3: Build Out Marketing Materials

Your marketing efforts are one of the most important aspects of your lead generation business. You must plan and implement a robust marketing strategy to operate at peak efficiency and effectiveness.

You’ll need a business name, website, domain name, and social media accounts to distribute your marketing materials. Your website and social media profiles allow you to disseminate your marketing materials and reach your niche and target audience.

Your website is the core of your lead generation company’s digital presence. It’s where you can create landing pages, blog posts, eBooks, whitepapers, and more to attract, nurture, and capture leads. It’s also where potential clients who want to buy your leads can learn more about your brand.

Building a website requires a domain name, a web host provider, and a content management system/website builder. You can create a website for as cheap as $200 to $300. However, the price you pay will depend on the size of your business and its needs.

You can purchase a domain name and web host provider bundled together from a web hosting company. Good examples include SiteGround, GoDaddy, Bluehost, and HostGator. WordPress is the most popular content management system (CMS) and is free.

One of the best marketing strategies to draw people to your website is SEO—search engine optimization. You can attract website traffic with an SEO strategy that addresses on-page SEO, off-page SEO, and technical SEO.

When SEO is properly implemented, your blog posts will rank for popular keywords. You’ll bring in prospects, and then you can use lead magnets and opt-in forms to funnel them to landing pages. A lead generation business is all about generating, nurturing, and capturing leads.

You should also create social media profiles on LinkedIn, Facebook, TikTok, and Instagram. These platforms have vast pools of users, and your lead generation company needs to have accounts to take advantage. You can build a following and funnel them to your website.

Some other marketing methods you can try include paid advertising, email marketing, and posting within communities, Reddit, and forums. This step has a lot of information, so here’s a quick summary:

  • Get a business name
  • Create a website
  • Create marketing assets for your website, like eBooks, whitepapers, landing pages, and blog posts
  • Use SEO to generate website traffic
  • Create social media profiles
  • Use social media to build a following and funnel it to your website or marketing assets
  • Use paid advertising
  • Use email marketing
  • Post on communities, Reddit, and forums  

Step 4: Work on Client Outreach

Acquiring leads to sell is not the only concern. You also need to find businesses that want to buy your leads. We touched on client outreach and acquisition briefly in step two. As a lead generation business, you’re seeing two types of leads:

  • The leads that you’re selling
  • The companies that you sell your leads to

Finding clients to sell to isn’t different from finding leads you want to sell. It’s all about setting up a website and social media profiles, then getting in front of your target audience.

What you want to do first is identify potential clients within your niche. Do some research, develop a list of prospects, and ensure they match the leads you’re selling. You can run some outreach campaigns once you’ve got a solid list of potential companies.

There are several outreach strategies that you can use. LinkedIn outreach is one of the best for a lead generation business. You should create a profile on LinkedIn if you don’t already have one. 

You can search and identify key decision-makers at your target companies on LinkedIn. You’ll want to look for people in sales or demand generation roles. These employees will have the authority to buy your leads.

You can also use a B2B data provider like UpLead for outreach. Features like search filters, firmographic data, and technology tracking allow you to find potential clients from the database.  The tool can get business email addresses, mobile numbers, and direct dials.

Organizational charts and company profiles make it easy to identify the structure of your target companies. This helps to determine who the decision-makers are in the sales department. Once you’ve got the contact info of your targets, you can conduct cold email outreach and cold calling.

Step 5: Nurture Leads to Maximize Conversions

Your clients will only buy your leads if they’re qualified and meet their criteria. They don’t want cold leads that have no chance to convert; they want warm leads that have been nurtured and engaged.

The marketing strategies outlined in step three will allow you to capture leads. Your website will have leads thanks to social media, SEO, paid advertising, cold email, and cold calling. 

Nurturing those leads is all about having suitable marketing materials set up. Your blog posts, eBooks, whitepapers, and landing pages will capture leads and acquire email addresses. You can then use email marketing strategies to warm those leads up until they’re qualified for sale.

A lead nurturing email sequence sends automated emails over a period of time. It allows you to send the right emails at the right time, making your leads more engaged. For instance, here’s an example:

  • Email 1: Welcome/onboarding
  • Email 2: Newsletter
  • Email 3: Share a helpful resource
  • Email 4: A case study
  • Email 5: Webinar promotion
  • Email 6: A success story

Your email provider has features that allow you to run autoresponder/email sequence campaigns. Email marketing is the primary method for lead nurturing, and you’ll need to build your email list to get your leads warm enough to sell.

Step 6: Track Progress and Optimize Your Process

At this point, you’ve got clients buying your nurtured, high-quality leads. The last thing you should do is ask your clients for conversion funnel metrics. You can use this data to renegotiate the terms of your deal.

Your lead acquisition channels should have trackable data that informs you of your best-performing assets. For instance, you might be running several Facebook Ad sets. You can track the performance of the ads and analyze the conversion data to uncover the top-performing ones.

5 Methods to Generate Leads for Your Clients

There are several lead sourcing methods that you can use to generate prospects for your clients. Below, we’ve listed five lead generation ideas that you can use. 

Use a Lead Finder or Database

Using a lead finder is one of the best lead generation methods. This cloud-based software provides access to a contact database that can be used to build targeted prospect lists. Lead finders have several features that make finding those leads in the database easy.

UpLead is one of the best lead finders on the market today. It has a B2B contact database with over 85+ million B2B email addresses, covering over 200+ countries. With a 95% data accuracy guarantee and 14+ million company profiles, it has one of the best databases around.

With features like 50+ search filters, real-time email verification, and technology tracking, UpLead makes lead generation easy.  

Cold Outreach

Lead generation is about identifying and reaching a specific target audience. One of the most effective ways to accomplish this is with cold outreach strategies like cold calling and cold emailing.

Cold calling and cold emailing are time-tested methods that still work effectively when properly implemented. Cold calling gets a bad reputation due to persistent telemarketers, but it still exists because it works—if done correctly.

Experts have stated that cold-calling success rates can be as low as 2%. However, that number bumps up to 20% for qualified leads. Cold calling can be a successful lead-generation method if you target the right prospects.

Cold emailing is a more modern approach to cold outreach. Although it doesn’t have as good a response rate as cold calling, it’s more cost-effective and easier to implement. You can send engaging emails at scale with the help of a capable email service provider.

A lead finder like UpLead can help you uncover mobile numbers, direct dials, and business email addresses. 

Search Engine Optimization (SEO)

Search engine optimization (SEO) is a digital marketing strategy that helps to bring organic traffic to your website. Several unique tactics make your domain more visible on Google and other search engines. It’s one of the best ways to bring in free leads

There are three main SEO subcategories:

  • On-page SEO
  • Off-page SEO
  • Technical SEO

On-page SEO is all of the tactics you can implement on your website to improve your search rankings. This includes HTML tags, page content, keywords, and links. These elements are crucial to rank on Google and bringing in traffic and potential leads.

Off-page SEO is the opposite of on-page SEO, and it’s all the things you can do outside of your website to improve your search rankings. Examples include email outreach, guest posting, broken link building, and more.

Technical SEO is a strategy concerned with improving the performance of your website. This includes the link architecture/internal link structure, page speed, mobile optimization, responsive design, and more.

Your lead generation business needs to use these SEO subcategories to succeed. When used effectively, you’ll attract inbound leads to your website with high-quality content optimized for search intent. 

However, SEO is a long-term investment; it takes time to work. Don’t expect results overnight.

Paid Ads

Paid advertising is an inorganic strategy to become visible and in front of your target audience. By purchasing digital ad space, you can get premium positioning on search results, social media feeds, and more. You can catch the attention of prospects and send them to your website.

Paid advertising comes in several formats and is described in various ways. Some examples include PPC (pay-per-click) advertising, display advertising, programmatic advertising, and search engine advertising. The leading platforms you want to advertise on include:

  • LinkedIn
  • Google
  • Facebook

You might also want to advertise on other search engines and social media platforms. LinkedIn, Google, and Facebook will be the most profitable paid advertising platforms for most lead generation companies. Display advertising and programmatic advertising could also be valuable.

The goal of all digital paid advertising is to attract a targeted audience to your website. You might send them to a landing page or a piece of content. You can use paid ads in many ways to generate leads, and how you use them depends on multiple factors.

Paid ads are highly effective if you’ve got a budget and the right strategy.

Social Media

Social media is an effective way to reach and engage your target audience organically. These platforms have substantial user bases that you can tap into.  You can build a following and funnel them to your website by creating social media profiles and engaging content.

As a lead generation business, you should be on platforms like LinkedIn, Facebook, and Instagram. These are fantastic places to organically attract prospects to your brand. An excellent organic strategy goes well with paid advertising on these platforms.

Must-Have Tools for Any Lead Generation Business

Several lead generation tools can make your operations run more efficiently and effectively. Below, we’ve listed three must-have tools that your—and anyone’s—lead generation business needs.

B2B Contact Database

As a lead generation business, finding leads is the most important thing. It’s what you selland what you need to do to find clients to sell to.  Access to a B2B contact database can make these two lead generation processes much easier.

A B2B contact database is a web-based application that offers access to an extensive business information database. Typically, this data includes employee demographic information, like name and job title. There is also information on companies—this is called firmographic data.

There are plenty of great B2B contact databases on the market today. There’s ZoomInfo and Apollo. However, the all-around best option is UpLead. It has one of the best databases, featuring the following:

  • 85+ million B2B email addresses from 200+ countries
  • 14+ million global company profiles
  • 95% data accuracy guarantee

UpLead also offers a robust suite of features. With these, you can sift through the UpLead database and find the best leads for your business. Some of these include: 

  • 50+ search filters
  • Real-time email verification
  • Technology tracking (16,000+ technologies tracked)
  • Firmographic data
  • Organizational charts
  • Purchase intent data

With UpLead, you can build a targeted prospect list. You can get email addresses, phone numbers, and direct dials. You can use this information to fuel your lead generation campaigns. You can also find companies that are willing to buy your leads.

A B2B contact database is a must for any lead generation business. Some can be expensive, but there are affordable options available. UpLead only costs $74 per month if billed annually. 

Email Provider

 You’ll need a capable email service provider to send emails at scale. This platformgives you features that make email marketing more effective. These features include bulk sending, audience segmentation, analytics, automation, and list management.

As a lead generation business, those features will come in handy. You can supercharge your cold email campaigns with bulk sending. Automation will allow you to run autoresponder sequences for lead nurturing campaigns. 

Some great email providers include:

  • Mailchimp
  • Aweber
  • ConvertKit
  • GetResponse
  • Constant Contact

Mailchimp is one of the most popular email service providers around. It offers everything you need to run effective email marketing campaigns at scale. It’s suitable for lead generation businesses of all sizes.

Aweber is an email service provider specializing in lead generation for small businesses. It has a drag-and-drop interface that simplifies the email marketing process. It has proofing tools, list management features, and more. You can’t go wrong with any of the listed email providers. 

CRM

Lastly, you need a customer relationship management (CRM) platform. A CRM platform is a cloud-based software that replaces the need to use spreadsheets. It centralizes large amounts of contact data under one web-based application.

A CRM platform can store your leads’ email addresses and phone numbers ..It can integrate with your website and social media profiles, tracking your campaigns and activity. Most businesses use a CRM because they are convenient and streamline your business processes. 

It must be stated that a CRM platform can vary significantly. Some of them are more orientated towards certain aspects than others. For instance, Zoho CRM is ideal for scaling businesses, and Salesforce is great for enterprise organizations and customization.

Some popular CRM platforms include:

  • Salesforce
  • HubSpot
  • Pipedrive
  • Zoho CRM

The great thing about a CRM platform is that it integrates with just about anything. It’ll fit with your email provider and B2B contact database. As stated earlier, it’ll also integrate with your website and social media profiles. 

A CRM platform acts as the central hub of your digital system. As a lead generation business, you need one to optimize and streamline your workflows. Prices are also quite affordable because the market is very competitive.

FAQs About Starting a Lead Generation Business

How much does it cost to start a lead generation company?

A lead generation company can be started with only a website and a few tools to help acquire leads. A good-quality website can cost as little as $200-400; an annual contract to UpLead is only $890. The cost barrier is small, but it’s better than most businesses.

Is starting a lead generation business worth it?

Yes, starting a lead generation business is worth it. You can generate consistent revenue without the need for high startup costs. You can create a lead generation business with only a website and a few tools. 

Can you make money with lead generation?

Yes, you can make money with lead generation. Businesses are always looking for more people interested in purchasing their products and services. As a lead generation company, you can sell them qualified, nurtured leads that are likely to convert into customers. 

What You Need to Remember About How to Start a Lead Generation Business

This article covered everything you need to know to start a lead generation business in 2022. We detailed a six-step process for creating a lead generation business. We also provided five methods to generate leads and also three must-have tools.

A lead generation business is a great way to make money without significant startup costs. You can earn commissions from every qualified lead you pass to your clients. Follow the advice outlined in this article, and you’ll be on your way to launching your lead gen business. 

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