How to start an online dating business

We are rapidly becoming a nation of single people. The well-documented rise in cases of separation and divorce is lining the pockets of lawyers, and is also providing a growing market for the online dating industry. According to reports, the majority of people in the UK are single and the online dating industry is turning over thousands.

Finding love or friendship online is becoming increasingly popular for a generation of people too busy to find partners on their own. This adds up to a very satisfying and viable business opportunity which, as an added advantage, can be set up on a shoestring from your home – with just a computer for company.

What is a dating website?

The modern dating site is, essentially, the successor to old-fashioned dating agencies, which matched up members using interviews, profiling and special networking events. Whereas the old agencies often did a lot of the searching for their members, meeting new clients before hand-picking their potential matches, the modern site allows users to do all the work, searching a database of other members and arranging meetings themselves.

In addition to the established market leaders, match.com and US-based eHarmony, the online dating sector comprises a number of niche sites, including FitnessSingles for health and exercise fanatics, Lovestruck for busy city professionals, and Uniform Singles, which is tailored to people in the military and emergency services – and those with a uniform fetish.

Julian Keenaghan is the founder of one such niche site, Tastebuds, which matches up users according to their music tastes. He believes there is still plenty of potential in the market.

“As well as the major players, you’ve got a lot of companies, like ourselves, offering a niche offering. It’s a very exciting place to be, and we’re still far from reaching saturation point.”

Key functions

The cornerstone of an online dating site is the search facility, whereby users key in a range of search criteria – including age, income, physical characteristics and geographical location – and the site brings up a list of people based on those preferences. The initial search is often provided free of charge; according to a report published last year, only around 15% of users actually pay for their time on online dating sites.

Once the user has gone through the search results and identified potential love interests, most sites allow them to send an email to their prospective matches, or talk to them with instant messaging; they will almost certainly have to pay for this service. match.com allows its users to ‘wink’ at other members to show their interest, and several sites offer a similar ‘teaser’ facility.

Is running an online dating company right for you?

If you wish to set up a prototype dating site, you can probably get by without strong IT and web development skills – resources such as DIY Dating allow interested parties to set up a basic website quickly and cheaply, and you can also engage the services of a specialist web developer.

However, as time goes on, you’re going to need to update the site on a regular basis, and potential investors aren’t going to be impressed if you don’t understand the software on which your product is built. So, in the long term, an online dating business definitely favours people who are experienced in IT and web building.

You’ll also need to be the kind of person who understands what members will want. You need to be able to put yourself in the user’s shoes; what will they be looking for from your dating site? What sort of search options will they require? And, if they’re slightly self-conscious, what sort of functions will ensure they feel comfortable chatting to complete strangers online?

As the owner of the site, it’s unlikely you’ll be talking to members directly; however you still need to be able to empathise with them, and maintain a subtle, tactful tone. Some members may have been hurt in the past; others may lack confidence. You must be capable of creating a welcoming environment, which doesn’t pre-judge and allows users to express themselves.

Julian says: “People skills help to a degree. We have to be conscious of the people who are going to be using it from the other end, the sort of concerns they have, that they want to portray themselves in a good way. You’re not totally removed from the end user.”

Setting up your dating website

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

However, as mentioned, construction of the website will probably require support from an experienced web builder, and you may also need to outsource core functions such as e-commerce, instant messaging, moderation and spam detection. Then, when the site goes live, you’ll need a web hosting company to manage it for you.

You’ll also need to do a lot of market research before you launch the site. You might think you’ve found the perfect niche, but a Google search might find that someone else has got there before you. It’s also worth going out and speaking to people to ask if your site would interest them – singles nights, and even word-on-the-street vox pops could provide great forums.

To promote the venture, you may wish to put adverts on Yell.com, or specialist internet sites relevant to your target audience – if, like Julian Keenaghan, 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. Simply issuing a release on Response Source or PR Wire could bring coverage in lots of different places, free of charge. Contact the local papers if you’re focused on the local area. Additionally, social media is also a free and easy way to promote awareness.

It’s a bit of a chicken-and-egg situation, because no-one will want to use the site if there aren’t people on there. It’s worth offering a free trial over quite a long period, perhaps six months, for the first few users.

The rules and regulations of running a dating site

Anyone can run a dating site – it would be quite possible to start one up tomorrow. You don’t need a licence, 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 – although many of the biggest names in the dating sphere, such as match.com, are starting to run background checks on new members as a goodwill gesture for existing users.

There is a trade association, the Association of British Introduction Agencies (ABIA), which you could join but it isn’t compulsory. Having said that, you can get support and advice from the association and membership will give your clients confidence.

To be a member of the ABIA you need to adhere to a strict code of practice, which you can then show to any prospective clients before entering into an arrangement. The code details what is expected of both client and agency (in terms of data handling, advertising and complaints) so everyone is fully informed at the start.

How much will setting up an online dating business cost?

A hosted website will probably have a one-off set up cost, as well as credit card processing fees on each transaction, and a monthly rental fee. Check the details of your web hosting site carefully; many will charge more for the monthly rental fee the more members you have.

In addition to the hosting cost, you’ve also got to think about design fees. Julian says that “for us, the total cost of building the site has been between £3,000 and £4,000, which includes a £1,500 design fee. However we’ve been lucky, in that we’ve had a lot of friends who’ve helped us out.”

You will also have to register your domain name, and, because you’ll be handling data, it’s good practice to join the Register of Data Controllers, which costs £35 per year.

How much can I earn from running a dating website?

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.

A number of the UK’s biggest dating agencies have chosen to roll out limited-time offers and discounts to grow their membership base; for example, members of match.com receive a month’s free membership if they haven’t “found love” within six months, while new subscribers to dating direct receive three days’ unlimited membership for free.

Ways to charge vary; many sites maintain a sliding scale of payments, rewarding members who commit to a long subscription period. Match.com, for example, offers packages for one month, three months, six months and 12 months. Usually dating sites offer the one-month package at a more costly price than the 12-month plan so there’s a clear incentive for visitors to sign up to a long-term subscription.

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. For you, 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, and ultimately their wishes are what counts.

Seasons and sectors

The amount you can charge for your dating service will depend on the demographic you are targeting. As a general rule, if you are providing and executive service for professional people only, you will be able to charge a substantial amount; conversely a site such as Tastebuds, which is based on music, may attract a younger audience, so a lower fee scale may be necessary.

You may also find the business is subject to seasonal fluctuations. The last week in December through to the third week of February is typically the biggest for online dating, so you may see a flurry of activity during this period – followed by a pronounced lull afterwards.

Overall

Ultimately, the amount of money you make from a dating site depends on your ambitions. Certainly, if you start to think about expansion then you will have to move out of the home office and into premises. Most importantly, though, is your attitude to your clients. A high standard of customer care, providing constant contact and genuine empathy, will be your best route to success.

So if you sense love in the air and you’ve the heart to go for it, a dating site could be the business for you.