SME Business Automation Service Business Model

Version: 3.0
Last Updated: 2025-10-25
Owner: Business Development
Status: Active Model

Overview

Zixly operates as an SME business automation service, focusing on Brisbane and South East Queensland businesses with 10-50 employees. Our revenue model combines project-based automation implementations with recurring managed services, providing clients with automated workflows between their business systems while ensuring sustainable business growth.

Revenue Streams

1. Business Automation Starter

Description: Connect 2-3 core business systems with automated workflows Investment Range: $3,000 - $5,000 Typical Project: 1-2 weeks Target Clients: Small businesses (5-15 employees) needing quick wins

Components:

• OAuth connection setup for 2-3 systems (e.g., Xero + HubSpot)
• 2-3 core automation workflows configured
• Simple dashboard showing key business metrics
• Team training (2 hours, in-person or virtual)
• Documentation and workflow diagrams
• 30-day post-launch support

Example Workflows:

• Invoice paid in Xero → Update customer status in CRM
• New deal won in CRM → Create invoice in Xero + send welcome email
• Time tracked → Weekly timesheet compiled and ready for invoicing

Success Metrics:

• 5-10 hours per week saved on manual data entry
• Zero data entry errors between systems
• Client team can monitor workflows independently
• ROI achieved within 3 months

2. Complete Business Automation

Description: Comprehensive automation across 5-8 business systems Investment Range: $8,000 - $15,000 Typical Project: 4-6 weeks Target Clients: Growing businesses (15-50 employees) with multiple systems

Components:

• OAuth connection setup for 5-8 systems
• 5-10 custom automation workflows
• Integration between accounting, CRM, project management, e-commerce
• Business intelligence dashboard with real-time data
• Advanced reporting and analytics
• Team training (8 hours over multiple sessions)
• Comprehensive documentation
• 60-day post-launch support and optimization

Example Workflows:

• Customer Lifecycle: Lead captured → CRM entry → Follow-up scheduled → Deal won → Invoice created → Project folder created → Welcome email → Payment received → Thank you email
• Financial: Time logged → Timesheet compiled → Invoice generated → Payment reminder sent → Receipt recorded → P&L updated
• Inventory: Stock low → Supplier notified → Purchase order created → Receipt logged → Inventory updated
• Project: New project → Folder created → Team assigned → Tasks generated → Milestones tracked → Progress invoices automated

Success Metrics:

• 15-20 hours per week saved on admin tasks
• 95%+ data accuracy across systems
• Real-time business visibility via dashboard
• ROI achieved within 4-6 months

3. Enterprise Business Suite

Description: Industry-specific automation with custom workflows and advanced features Investment Range: $20,000 - $40,000 Typical Project: 8-12 weeks Target Clients: Established businesses (40-100 employees) requiring customization

Components:

• Unlimited system integrations (accounting, CRM, project management, e-commerce, HR, etc.)
• Industry-specific workflow customization (construction job costing, legal matter management, retail multi-channel)
• Advanced business intelligence and predictive analytics
• Multi-location support with centralized reporting
• Compliance automation (trust accounting, quality control, audit trails)
• Custom reporting and data exports
• Mobile access to dashboards
• Comprehensive training program (12+ hours)
• 90-day full support with dedicated contact
• Monthly optimization reviews

Industry-Specific Examples:

• Construction: Job costing automation, progress billing by milestone, subcontractor management, variation tracking, certificate generation
• Professional Services: Matter management, timesheet-to-trust accounting, WIP tracking, client portal automation, compliance documentation
• E-commerce: Multi-channel inventory sync, order fulfillment automation, returns processing, supplier integration, customer lifecycle emails
• Manufacturing: Production scheduling, materials procurement, quality control tracking, finished goods management, cost analysis

Success Metrics:

• 20-30 hours per week saved on admin and reporting
• Complete business visibility across all locations/departments
• Industry-specific compliance maintained automatically
• ROI achieved within 6-12 months

4. Monthly Management & Optimization (Recurring Revenue)

Description: Ongoing workflow management, optimization, and new automation development Investment Range: $500 - $2,000/month Commitment: Month-to-month, 3-month minimum initial term Target Clients: Businesses wanting hands-off automation management

Service Tiers:

Basic Management ($500/month):

• Workflow monitoring and health checks
• Bug fixes and adjustments
• Monthly performance report (time saved, workflows executed)
• Email support (response within 24 hours)
• Quarterly optimization review

Professional Management ($1,200/month):

• Everything in Basic Management
• 1 new workflow per month (or equivalent optimization)
• 1 new integration per quarter
• Priority support (response within 4 hours)
• Monthly strategy call to discuss improvements
• Workflow analytics and recommendations

Enterprise Management ($2,000/month):

• Everything in Professional Management
• 2 new workflows per month (or equivalent work)
• Unlimited integration updates
• Same-day support response
• Dedicated Slack or Teams channel
• Bi-weekly optimization sessions
• Quarterly business review with executive team

5. Consulting & Advisory Services

Description: Business process consulting, workflow design, system selection advice Hourly Rate: $150 - $250/hour Typical Engagements: 10-40 hours Target Clients: Businesses needing guidance before committing to automation

Services:

• Business process mapping and optimization
• System selection advice (which CRM, accounting software, project management tool)
• Workflow design and documentation
• ROI analysis for automation opportunities
• Change management and team training
• Integration troubleshooting and support

Typical Engagements:

• Process Mapping Workshop (8-16 hours): $1,200-$4,000
• System Selection Consulting (6-12 hours): $900-$3,000
• Workflow Design (10-20 hours): $1,500-$5,000
• Team Training (4-8 hours): $600-$2,000

Year 1 Financial Targets (Brisbane/SEQ)

Revenue Goals

Total Revenue Target: $200,000 - $400,000

Revenue Mix:

• 65% Project revenue (Starter + Complete + Enterprise implementations)
• 35% Recurring revenue (monthly management + consulting)

Rationale: Higher project revenue initially to build client base and case studies, gradually shift to 50-60% recurring by Year 2

Client Targets

Total Clients: 20-30

Client Mix:

• 8-12 Business Automation Starter projects ($24k-$60k total)
• 6-10 Complete Business Automation projects ($48k-$150k total)
• 2-4 Enterprise Business Suite projects ($40k-$160k total)
• 8-15 Monthly management clients ($48k-$360k annual recurring)

Client Acquisition Rate: 2-3 new clients per month, ramping from 1-2 in Q1 to 3-4 by Q4

Quarterly Targets

Q1 (Months 1-3): $35,000 - $65,000

• Focus: 3-4 Starter projects to build momentum and case studies
• 1 Complete project starts
• First 2-3 monthly management conversions from Starter clients
• Heavy networking and partnership building (accountants, business coaches)

Q2 (Months 4-6): $50,000 - $95,000

• 2-3 Starter projects
• 2 Complete projects
• 1 Enterprise project starts
• 5-7 monthly management clients
• Case studies published, referral program active

Q3 (Months 7-9): $60,000 - $115,000

• 2-3 Starter projects
• 2-3 Complete projects
• Enterprise project continues
• 8-10 monthly management clients
• Industry-specific positioning strengthens

Q4 (Months 10-12): $55,000 - $125,000

• 1-2 Starter projects
• 2-3 Complete projects
• 1 Enterprise project completes, 1 new Enterprise starts
• 10-15 monthly management clients
• Focus on contract renewals and upsells

Unit Economics

Gross Margins

Target: 70-80% gross margins

Cost Structure:

• Labor: 20-30% (solo operator initially, contractors for peak periods)
• Tools & Infrastructure: 3-5% (Supabase, OAuth services, monitoring)
• Marketing: 8-12% (networking events, accountant partnerships, content creation)
• Professional Services: 2-3% (accounting, legal, insurance)

High Margins Because:

• Service-based delivery (no COGS, no inventory)
• Leverage of workflow templates (faster implementation over time)
• Standardized tools and patterns (efficient delivery)
• Minimal infrastructure costs (cloud-based, pay-as-you-go)

Profitability Analysis

Year 1 Projections:

Conservative Scenario:

• Gross Revenue: $200,000
• Gross Profit: $140,000 (70% margin)
• Operating Expenses: $45,000
• Net Profit: $95,000 (48% net margin)

Target Scenario:

• Gross Revenue: $300,000
• Gross Profit: $225,000 (75% margin)
• Operating Expenses: $60,000
• Net Profit: $165,000 (55% net margin)

Optimistic Scenario:

• Gross Revenue: $400,000
• Gross Profit: $320,000 (80% margin)
• Operating Expenses: $75,000
• Net Profit: $245,000 (61% net margin)

Pricing Strategy

Value-Based Pricing

Approach: Price based on time saved and business value delivered, not hours worked

Value Drivers:

• Time Savings: Automated workflows save 10-30 hours/week of manual work
• Accuracy: Eliminate 95%+ of data entry errors and duplicate handling
• Growth Enablement: Handle 30-50% more business without adding admin staff
• Cash Flow: Faster invoicing and payment tracking improves cash position
• Decision Making: Real-time dashboards enable data-driven decisions

ROI Examples:

Professional Services Firm (15 employees):

• Time saved: 15 hours/week at $90/hour = $70,200/year
• Investment: $8,000 (Complete Automation)
• ROI: 9:1 in first year
• Payback: 7 weeks

Construction Company (25 employees):

• Time saved: 12 hours/week at $75/hour = $46,800/year
• Investment: $12,000 (Complete Automation)
• ROI: 4:1 in first year
• Payback: 13 weeks

E-commerce Business (10 employees):

• Time saved: 20 hours/week (order processing) + stockout reduction = $75,000/year
• Investment: $15,000 (Enterprise Suite)
• ROI: 5:1 in first year
• Payback: 10 weeks

Competitive Positioning

Advantages Over Competitors:

• SME-appropriate pricing: $3K-$40K projects vs $100K+ from large consultancies
• Local Brisbane presence: In-person meetings, same timezone, understand local market
• Business-focused: We speak business language, not technical jargon
• Fast implementation: 1-12 weeks vs months or years for IT projects
• Transparent pricing: Fixed-price projects, no hidden hourly consulting fees

Competitive Analysis:

• DIY Integration Platforms (Zapier, Make): $0-$1,000/year but requires technical skills, limited to simple workflows, no consulting
• IT Consultants: $150-$300/hour, minimum 40-hour engagements, tech-focused not business-focused
• Offshore Automation Services: $50-$100/hour but timezone issues, communication challenges, no local presence
• Large Consultancies: $200-$400/hour, $100K+ minimums, enterprise-focused not SME-appropriate
• Zixly positioning: $150-$200 effective hourly rate, SME-focused, local + responsive, business outcomes-focused

Client Acquisition Strategy

Target Market

Primary: Brisbane and SEQ SMEs with 10-50 employees

• Company Size: 10-50 employees (sweet spot: 15-30)
• System Complexity: Currently using 3+ separate business systems
• Pain Points: Manual data entry, spreadsheet chaos, double handling, time wasted finding information

Industries (by priority):

1. Professional Services (30% of target market): Law, accounting, consulting, architecture, engineering
2. Construction & Trades (25%): Builders, electricians, plumbers, landscapers, HVAC
3. E-commerce & Retail (20%): Online stores, retail chains, wholesalers
4. Manufacturing (15%): Food production, component manufacturing, packaging
5. Other Services (10%): Healthcare practices, education providers, hospitality groups

Decision Makers:

• Business Owners (ultimate authority, budget holders)
• Operations Managers (day-to-day pain, process owners)
• Bookkeepers/Accountants (system users, influencers)
• Office Managers (admin pain, workflow users)

Acquisition Channels

Primary Channels (70% of leads):

1. Accountant & Bookkeeper Partnerships - Referral channel from trusted advisors who see the pain
2. Local Business Networking - Brisbane chambers, BNI groups, industry associations
3. Content Marketing - Case studies, ROI calculators, industry-specific guides on LinkedIn
4. Workshop & Speaking - Free automation workshops at co-working spaces, industry events

Secondary Channels (30% of leads):

1. Referral Program - 10% discount for client referrals, proven clients are best salespeople
2. Business Coach Partnerships - Coaches identify inefficient processes, we fix them
3. Industry Association Partnerships - Direct access to builders, lawyers, retailers associations
4. LinkedIn Outreach - Targeted connection requests to Brisbane business owners

Sales Funnel

1. Awareness (200 prospects per quarter):

• Workshop attendees (automation basics for SMEs)
• LinkedIn content viewers (case studies, tips)
• Accountant partnership referrals
• Business networking connections

2. Interest (60 qualified leads per quarter):

• Free 30-minute automation assessment
• ROI calculator download (time savings estimator)
• Industry-specific guide download
• Workshop follow-up consultations

3. Consideration (20 opportunities per quarter):

• Paid business process review ($500, credited to project)
• Detailed workflow mapping and proposal
• ROI calculation with specific time savings
• Reference calls with similar clients

4. Conversion (6-8 clients per quarter):

• Clear proposal with scope and deliverables
• Fixed-price commitment, not hourly uncertainty
• Payment schedule (30% deposit, 40% midpoint, 30% completion)
• Testimonial/case study agreement for discount

Conversion Rate: 3-4% awareness to client (industry standard for B2B services: 2-5%)

Client Lifetime Value

Average Starter Client:

• Initial Project: $4,000
• Monthly Management Conversion: 30% convert to $500/month = $6,000/year
• LTV Year 1: $10,000
• LTV 3 Years: $22,000 (assuming 2 years retention)

Average Complete Automation Client:

• Initial Project: $11,500
• Monthly Management Conversion: 50% convert to $1,200/month = $14,400/year
• Additional Workflow Development: $3,000/year average
• LTV Year 1: $28,900
• LTV 3 Years: $57,300 (assuming 2 years retention)

Average Enterprise Suite Client:

• Initial Project: $30,000
• Monthly Management: 80% convert to $2,000/month = $24,000/year
• Expansion Projects: $8,000/year (new workflows, additional locations)
• LTV Year 1: $62,000
• LTV 3 Years: $126,000 (assuming 2 years retention)

Weighted Average LTV (assuming 50% Starter, 35% Complete, 15% Enterprise):

• Year 1: $24,000 per client
• 3 Years: $49,000 per client

Customer Acquisition Cost (CAC)

Target CAC: $1,500 - $3,000 per client

Cost Breakdown:

• Marketing & networking: $500-$1,000 (events, content creation, partnership building)
• Sales time: $500-$1,000 (discovery calls, proposals, presentations at $150/hr)
• Tools & systems: $300-$500 (CRM, proposal software, scheduling)
• Misc: $200-$500 (travel, materials, follow-up)

CAC Payback Period:

• Starter clients: 3-4 months (after initial project payment)
• Complete clients: 1-2 months (higher initial project value)
• Enterprise clients: Immediate (first payment exceeds CAC)

LTV:CAC Ratio:

• Starter: 7:1 (3-year LTV)
• Complete: 19:1 (3-year LTV)
• Enterprise: 42:1 (3-year LTV)
• Weighted Average: 16:1 (healthy ratio, target is 3:1 minimum)

Financial Metrics

Key Performance Indicators (KPIs)

Revenue Metrics:

• Monthly Recurring Revenue (MRR): Target $5k-$15k by end of Year 1
• Average Project Value: $9,000 - $12,000
• Project Close Rate: 30-40% of qualified opportunities
• Upsell Rate: 40-50% of project clients convert to monthly management

Client Metrics:

• Client Acquisition Cost (CAC): $1,500 - $3,000
• Lifetime Value (LTV): $24,000 (Year 1), $49,000 (3 Years)
• LTV:CAC Ratio: 16:1 (3-year), 8:1 (1-year)
• Client Retention Rate: 75-85% annually for monthly management
• Net Promoter Score (NPS): Target 70+ (world-class is 50+)

Operational Metrics:

• Project Delivery Time: 1-2 weeks (Starter), 4-6 weeks (Complete), 8-12 weeks (Enterprise)
• Workflow Build Time: 4-8 hours per workflow (decreases with template library)
• Time to First Value: < 1 week (client sees first automated workflow working)
• Support Response Time: < 4 hours (business hours), < 24 hours (after hours)

Profitability Metrics:

• Gross Margin: 70-80%
• Net Margin: 48-61%
• Billable Utilization: 70-80% (target for solo operator)
• Revenue per Employee: $200K-$400K (Year 1 solo, adjust for team growth)

Pricing Tiers Comparison

Expansion Opportunities (Year 2+)

Geographic Expansion

Gold Coast (Year 2):

• Similar market to Brisbane (30,000+ SMEs)
• Leverage Brisbane case studies and reputation
• Partner with Gold Coast accountants and business coaches
• Target revenue: $100K-$150K in Year 2

Sunshine Coast (Year 2):

• Smaller but underserved market
• Many Brisbane business connections
• Lower competition
• Target revenue: $50K-$75K in Year 2

Regional Queensland (Year 3):

• Partner-led model (train local consultants)
• Remote delivery with occasional site visits
• Focus on larger regional centers (Toowoomba, Cairns, Townsville)

Service Expansion

Industry-Specific Packages (Year 2):

• Legal Practice Automation Package: $12K standard package for law firms (trust accounting, matter management, client portal)
• Construction Business Package: $15K standard package for builders (job costing, progress billing, subcontractor management)
• E-commerce Growth Package: $10K standard package for online stores (inventory sync, order automation, customer lifecycle)

White-Label Partner Program (Year 2-3):

• Train accountants and bookkeepers to deliver Starter packages
• Zixly handles technical implementation, partner handles client relationship
• Revenue share: 60% Zixly, 40% Partner
• Scales without adding full-time staff

Workflow Template Marketplace (Year 3):

• Self-service purchase of pre-built workflow templates
• $500-$2,000 per template with installation instructions
• Low-touch revenue stream from existing intellectual property

Risk Management

Financial Risks

Slow Client Acquisition:

• Risk: Takes longer than 3 months to close first clients
• Mitigation: Start with Starter packages ($3K-$5K) for faster closes
• Mitigation: Heavy focus on accountant partnerships (warm referrals)
• Backup Plan: Consulting services to generate immediate revenue

Client Non-Payment:

• Risk: Client doesn’t pay final invoice after project complete
• Mitigation: 30% deposit required before work starts
• Mitigation: 40% payment at midpoint milestone
• Mitigation: Legal terms allowing workflow shutdown for non-payment

Pricing Too Low:

• Risk: Market will pay more than $3K-$40K pricing
• Mitigation: Test with initial clients, increase pricing based on demand
• Mitigation: Track competitor pricing and adjust quarterly
• Mitigation: Value-based pricing discussions focus on ROI, not cost

Operational Risks

Technical Complexity:

• Risk: Integrations more complex than expected, blow timeline
• Mitigation: Build time buffers into estimates (20-30% contingency)
• Mitigation: Develop workflow template library to speed delivery
• Mitigation: Clear scope definition with change order process

Client Expectation Mismatch:

• Risk: Client expects more than scope includes
• Mitigation: Detailed proposal with specific deliverables listed
• Mitigation: Demo similar workflows before project starts
• Mitigation: Weekly check-ins during implementation

Vendor API Changes:

• Risk: Xero, HubSpot, Shopify change APIs, breaking workflows
• Mitigation: Monitor vendor API announcements and changelogs
• Mitigation: Build abstraction layer so changes isolated
• Mitigation: Monthly management contracts cover maintenance

Conclusion

Zixly’s SME business automation model is financially viable with strong unit economics:

• High Gross Margins: 70-80% due to service-based delivery
• Strong LTV:CAC: 16:1 (3-year) indicates sustainable growth
• Fast Payback: 1-4 months CAC recovery enables rapid scaling
• Recurring Revenue: 35-60% mix provides predictable income
• Large Market: 5,000+ Brisbane SMEs with 3+ systems to integrate

Year 1 target of $200K-$400K is achievable with 20-30 clients at $8K-$15K average project value plus 8-15 monthly management clients. The model balances project revenue (faster growth) with recurring revenue (stability and compounding).

Key success factors are accountant partnerships (referral channel), standardized workflow templates (faster delivery), and strong case studies demonstrating clear ROI (easier sales).

Document Version: 3.0
Last Updated: 2025-10-25
Owner: Zixly Business Development
Review Cycle: Quarterly

Previous Versions:

• v1.0: Initial financial model (n8n-focused SME stack)
• v2.0: Updated for DevOps automation service model
• v3.0: Complete recalculation for SME business automation market (current)