Honeybook, a highly advanced all-in-one business client management system, is quite popular among smaller and medium-sized businesses to this day. The tool combines various useful features including contracts, invoices, and project management to streamline your business efficiently and make it easier for you to find what you’re looking for when you want it.
The best part of HoneyBook is that everything you save is in one spot, keeping your projects organized and making it really easy for you to find what it is you’re looking for when it’s time to use it.
But what is their specific business model, and how does it earn them money? We’ll dig deeper into Honeybook’s financial performance and see how they generate its revenues.
Honeybook sells its cloud-based client relationship management (CRM) software on a tiered subscription basis. It charges monthly subscription rates depending on the number of clients, and it earns revenue from transaction fee charges for online payments.
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About HoneyBook
Honeybook is a web-hosted customer relationship management (CRM) software for small and medium-sized businesses (SMBs). It allows them to manage their sales pipeline and automate repetitive tasks.
What sets Honeybook apart from other business solutions providers is its current focus on helping small businesses during these tough times. Small businesses were hit especially hard by the coronavirus outbreak and Honeybook has been there for them.
Business Model of HoneyBook
Honeybook offers tieÂred pricing plans for its cloud-based customer relationship management (CRM) software specifically designed for small businesses.
Product
Honeybooks CRM (Customer Relationship Management) solutions help small to medium-sized companies manage their business processes online with secure, easy access to customer information.
HoneyBook’s top competitors include:
- HubSpot CRM
- Quickbooks Advanced Online
- Quickbooks Desktop Enterprise
- Trello
Many businesses used to feel that installing CRM systems were too complicated for most of their employees to use.
If some company staff members use a new CRM software while others don’t, then you’ve got the worst of both situations because the old system is in the way of the newer one and vice versa.
Today, however, CRM software can be installed in the cloud, and individual users can access them through the internet. In addition, CRM software is often hosted online, so no one needs an individual installation. For example, Honeybook, in particular, primes itself on being easy to use and easy to integrate into existing systems.
For those who are new to CRM, understanding that a CRM system is a very comprehensive system is the first step toward using one effectively.
CRM can be broken down into five different categories:
- Strategic
- Operational
- Analytical
- Collaborative
- Customer Data Platform
According to our definition, strategic CRM focuses on CX and CS.
Sales Pipeline Management (Sales PPM) is basically the entire sales funnel, from creating and organizing contact records to closing deals. It can also be broken down into three categories:
- Sales force automation
- Marketing automation
- Service Automation
Analytical CRM is a business tool for acquiring and serving customers. It can also help companies predict customer buying behavior.
Collaborative Customer Relationship Management (CRM) involves not just the customer, but external stakeholder groups who interact with the company.
- Suppliers
- Vendors
- Distributors
A database is the use of software programs to store information. This is usually where data that has been bought from social media platforms are stored.
The point is that operating a digitalized business can get quite complicated, but it doesn’t have to be if you can find an affordable and effective method for outsourcing those working pieces.
One happy Honeybook user wrote, “HoneyBook makes it easy for me to do the things I enjoy by automatizing the things I don’t want to do.”
Marketing
With Citibank having an equity stake in HoneyBook, the company doesn’t need any additional marketing.
Regardless, Honeybook has an international marketing, community, and blogging team, Rising Tide.
Expenses
Just because the company isn’t a brick-and-mortar enterprise or manufacturing firm doesn’t mean they don’t need to be online.
HoneyBook continues to operate out of its global headquarters in San Francisco, California, but still has the expenses associated with running an international business.
- Staff
- Offices
- Materials
- Utilities
- Security
- Compliance
Moreover, Honeybook must continually build and maintain its cloud infrastructures and cybersecurity systems. It also has to spend all costs related to online payment processing.
Plan for Profit
Honeybook intends to make a profit from its three main sources of income:
- Subscriptions
- Transaction fees
Due to the COVID-2019 pandemic, this is the best time for Honeybook, because so many of the normal obstacles to running a successful company can now be safely put into place online.
Cloud computing is often referred to as “that fluffy, white thing you can see when you’re looking up at the clouds.” Small business owners don’t usually have the technical skills necessary to automate their business processes themselves. And because they run a small business, they don’t always have the resources available to learn new things.
Honeybook enables small businesses to easily outsource their business processes while they concentrate on saving their businesses from falling apart during an unprecedented global pandemic.
HoneyBook’s cloud-based solution is completely digital, so it is not affected by any type of lockdown or rioting.
During this crisis, Honeybook has an opportunity to build its brand by becoming a hero company for mom-and-pop stores.
How Does HoneyBook Make Money?
Honeybook makes most of its money from two sources:
- Businesses use subscription services to manage their customer relationships.
- Fees are charged by SMB clients who use Honeybook.
It’s the combination of the high-end features and the low price point that has enabled Honeybook to become one of the most successful startups out there.
As with any CRM solution, subscription fees are the backbone of revenue for most companies. They come in three price levels:
- Starter Plan
- Unlimited Monthly
- Unlimited Annual
The Starter plan costs $9 per month and includes these features:
- Access to all features
- Limited to $10k in total transactions
- Concierge Support for up to six (6) month period
The Unlimited Plan costs $39 per month and includes the following:
- Access to all features, plus
- No limit on transactions
- Unlimited concierge support
- Add unlimited team members
The Unlimited Annual subscription costs $390 annually and includes the Free Trial. It has these features:
- 17% savings
Honeybook has all of the subscription fee-based product and service offerings that we’re going to mention in the next section. They include:
- Client portal software
- Free account migration
A customer portal is a customer-facing tool. Customers can use it to view their account details, pay bills, etc.
- Past and present communications
- Payments
- Signatures
- Meetings
- Exchanged documents
- Due dates
It’s very easy to migrate your free accounts to Honeybook. Simply upload your old file(s) to Honeybook and they will be converted into new template files (which you get by e-mail). Usually, these conversions take place within 72 hours or less!
Transaction Fees
Honeybook charges a fee of 3 percent for credit cards and 1.5 percent for ACH transfers. These fees are certainly not outrageous considering their competitors, such as PayPal and Square, charge similar rates.
One of the things that make their fee structure palatable to their clients is that they offer a host of additional services and features alongside their online payment system:
- One-click invoice, contract, and payment
- Accepted payment methods include credit cards, debit cards, PayPal, and wire transfers.
- Clients can auto-pay
- Mobile friendly
- One platform for managing clients and paying them
- Automatic payment reminders
- Payment tracking
- Make direct deposits into the account
- Cash received within minutes instead of 2-3 days.
- Available 24/7, including weekends
- Choose between which payment methods are used for transfers.
- A low one percent transfer fee (based on the type of transaction and whether or not that transaction is recurring).
According to a PayPal report from Canada in 2017, small business owners who accept online payments earn twice as much as those who don’t.
Online payment systems offer several advantages for small business owners.
- More convenient for your customers
- You get paid fast
- You get your finds online without having to meet people in person.
- You get your finds by not waiting for a paper check.
HoneyBook Funding, Valuation, and Revenue
Funding is no longer an issue for HoneyBook, especially since they raised $2 million in Series A funding back in 2013. Since then, their funding has grown by more than 22 times.
Investors include Citigroup Ventures, Norwest Venture Partnership, Battery Ventures, TigerGlobal Management, Hillsven Capital, and Tribeca Venture Partners
Because of the coronavirus outbreak, Honeybook’s valuation has grown by six times since 2018.
- The growth of the independent workforce
- The digital transformation of small businesses
Honeybook’s revenues have tripled over a 12-months period to $35 million, according to TheFintechtimes.com. These are also due to the two effects of the pandemics mentioned above.
Is HoneyBook Profitable?
HoneyBook is an innovative software company that has been able to prove its profitability through multiple successful trials. It provides small businesses and professionals with tools for improved customer services and increased income.
HoneyBook’s growth has been exponential and there is no reason for us to think that they have been putting their profits towards losses.
Conclusion: How Does HoneyBook Make Money?
Honeybook is an online platform for handling client relationships. It offers services such as meeting management, invoice generation, automated payments, insight analytics, and more. They make their revenue from monthly/annual subscription fees and transaction fees for each payment they receive through their platform.
This was an extremely detailed overview of Honeybook’s business plan. If you want to know more, please check out their official website.
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