£1,000,000/month? Online Competition Model I Don’t Fully Understand (4k)
Jan 20, 2025
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How does an online competition business make £1 million in just a month? Dive into the remarkable growth story of an online raffle company, highlighting its leap from £100,000 to £1 million in two years. Discover the importance of fair pricing in business acquisitions and navigate the world of online prize competitions with insights into legal challenges and consumer behavior. Learn innovative marketing strategies, including collaborations with charities, and enjoy a fun quiz about Candy Crush revenue that adds a playful twist to the business talk!
Cosmetic Competitions achieved £1 million in monthly revenue through innovative competition formats and strategic marketing efforts using online raffles.
The creation of a 60,000-member Facebook group has significantly enhanced marketing effectiveness by fostering community trust and encouraging customer engagement.
Connor plans to transition from contractors to full-time staff to professionalize operations, aiming for £5 million in annual revenue while ensuring compliance with new regulations.
Deep dives
Remarkable Growth in Revenue
The business Cosmetic Competitions has experienced explosive growth, generating impressive monthly revenues. Initially making between £75,000 to £100,000 a month, the business skyrocketed to £1 million in January 2025. This rapid growth can be attributed to innovative competition formats and effective marketing strategies. Connor, the business owner, has leveraged online raffles and instant win competitions to capture a wide audience while maintaining high profit margins.
Effective Use of Social Media for Growth
A significant driver of the business's success has been the creation of a Facebook group amassing 60,000 members. This community serves as a powerful marketing tool, allowing members to share their wins and experiences, which enhances credibility and encourages new customers to participate in competitions. By engaging with the group rather than relying solely on traditional paid advertising, Connor has managed to build a loyal customer base that repeatedly invests in competitions. This strategy distinctly differentiates Cosmetic Competitions from other businesses in the online prize sector.
Challenges in the Niche Market
Operating in the competition industry presents unique challenges, particularly in terms of banking and advertising. Many financial institutions and marketing providers view this sector as high-risk, resulting in difficulties for business owners seeking support. Additionally, social media platforms like Facebook have employed stringent algorithm rules, often flagging legitimate posts as fraudulent, which complicates marketing strategies. Connor's approach of building a solid community helps mitigate some of these hurdles by fostering trust and transparency among its participants.
Creating a Sustainable Business Model
For the future, Connor envisions expanding his team and establishing a commercial unit to further professionalize operations. He aims to transition from self-employed contractors to full-time staff as the business continues to scale. With ambitions to reach £5 million in annual revenue, Connor is focusing on maintaining profit margins while regulating the business to meet governmental compliance in the competition sector. This strategic shift is essential for sustaining growth and readiness for potential market changes.
Balancing Profitability and Regulation
While Connor reports substantial profit margins of 30-40%, the business must navigate impending regulations expected to tighten compliance within the competition arena. These changes could align Cosmetic Competitions closer to the gambling sector, prompting a need for licenses and stricter operational guidelines. Connor expresses a desire to adapt by assessing potential software solutions and hiring regulatory experts. This foresight will be crucial in ensuring the business remains competitive and compliant in a rapidly evolving market landscape.
How does an online competition business generate £1M in just one month? This week, James and JB break down the numbers, explore the business model, and try to figure out how it’s all possible.
Welcome to the Business Broadcast Podcast! Each week James brings on the show an entrepreneur who shares their biggest challenges and struggles in business.
James coaches the business owner through these challenges by asking those hard hitting questions in order to get to the bottom of these problems and help the business owner soar to success.
Find out more from Connor here: cosmeticcompetitions.co.uk
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