Local Lead Generation Business Model Explained: 3 Reasons It’s The Best Way To Make Money Online

December 4, 2023

The local lead generation business model is an online strategy that connects potential buyers to local services. First, build and rank generic websites in phone-driven industries. Then, get those sites to the top of Google search engines and drive organic traffic to your digital asset.

Once you're at the top of the SERPs, your sites are like digital billboards. Then they're in front of an audience of people who want to buy what you're selling. (That's how to profit from the business model). 

Lead gen is a learned skillset. Plus, natural barriers like location and population help control the competition. Of course, you also need to communicate with local business owners. (This deters a lot of people). As a result, market saturation is minimal.

This article will explain how the local lead generation business model works. And list three reasons it's the best way to make money online. Plus, why starting a lead generation company is the best way to create a passive income in 2024.

The Local Lead Generation Business Model Explained

The local lead generation business model is a chance to harness free online traffic and get high-quality leads for local businesses. The premise is simple. Build and rank websites at the top of Google. Once your sites produce leads, sell them to local contractors. (Small business owners pay a monthly fee to get those leads).

You act like a middleman between the business owner and the potential customer. You don't need to own inventory or sell products and don't need a lot of money to get started. But once your sites reach the top of the SERPs, they generally stay ranked for the long term. So now you have a digital property that owns prime real estate and generates new leads for your clients. 

You're like a digital landlord; the business owner is your tenant and occupies your site. But you can earn $500-$2000/month per site. And because you own the sites and the leads, you have full control. (Clients tend to stay long-term because they want your qualified lead stream). Then you can build and scale more and more lead gen sites to create a passive income that will keep growing as you make and rank more assets.

3 Reasons Local Lead Generation Is The Best Way To Make Money Online: Why The Business Model Works

1. Natural Barriers Minimize The Level Of Competition

Natural barriers like geographical location and the size of the population minimize the level of competition. However, this marketing strategy requires specific criteria to ensure you're targeting the right niche in the correct city. In addition, because you need to communicate with small business owners (at least minimally), people aren't saturating local markets like other online business models. (Dropshipping and affiliate marketing, for example).

Also, not every city is the right fit for the business model. You don't want to target a population that is too big or too small (75K-250K). And you don't want to pick a super competitive niche (not a lot of reviews or listed in Google Maps). But these key parameters help reduce the competition level. 

Lead generation is worth it if you're looking for a way to make money online. Of course, you need to commit to doing the hard work at the beginning. But then, you can build and rank as many sites as you want for minimal cost.

How Much Does It Cost To Start A Local Lead Generation Business?

It costs around $500 to start a local lead generation business if you start by building one site. Expenses include costs like:

  • Domain: WordPress or Namecheap $10-$15/year

  • Hosting: HostGator or Siteground $3-$12/month

  • Call Tracking Number: CallRail $25/month

  • Payment Processor: Stripe (3% fees) or PayPal (1.9%-3.5%)

You don't need much traffic for your website to start making money. Not to mention that the cost of your software, tools, and business expenses is a drop in the bucket when you consider that profit margins for the business model are between 85%-90%.

Plus, as soon as your site produces leads, you can set up a payment arrangement and start making money. Then, rinse and repeat; there's no limit to how many sites you have or where you rent. 

2. It’s A Skill Set & There’s A Learning Curve

Lead generation isn't a hard job. But the business model takes a specific skill set. (Plus, there's a bit of a learning curve). Lead generation is not the same as SEO. Instead, you use basic local SEO to leverage Google and get your online assets to the top of the search engine. 

But our coaching program teaches students to use a content approach. Employ content marketing strategies in addition to digital marketing techniques. Other lead gen tactics include things like:

Use These Lead Generation Strategies To Succeed

  • High-quality content on your website (1000-1200 words on the home page and 500-1000 words on the service pages)
  • Clear call to action (clickable links and tracking number)
  • Build out your socials (Facebook page, GBP, etc.)

Lead generation is different from advertising. You're not trying to build brand awareness. Instead, the goal is to drive highly targeted leads to your site. You want people who are ready to take action now. To be successful with the business model, you need a few qualities that include things like:

What Qualities Should A Lead Generator Have?

  • Copyrighting & Basic Web Design
  • Research & Data Analysis
  • Sales & Effective Communication Skills

Once you have the skills to rank websites specifically for local SEO, you won't need to worry about 95% of the competition. But you will own prime real estate. 

3. 41,683 ZIP Codes Means A Ton Of Opportunities In Untapped Markets With Little Industry Saturation

There are 41,683 ZIP codes in the USA, and each one represents a market full of untapped potential. The key is to dial down and get niche-specific. For example, build a website for pressure gauge services instead of a plumbing site. But you need to know what niche and city combination is profitable.

The goal is to target high ticket niches ($2000-$10,000+) with a high volume that isn't seasonal. Then use tools like Google Analytics, Keywords Everywhere or ahrefs and find keywords people are actively searching for now. Next, pick the best long-term keyword terms that aren't too competitive. (Use a Google search). But if the same company is showing up on the maps and is in the top organic spots, you should consider this a red flag. (This niche might be too competitive).

The best clients for lead generation are the ones that don't have a solid online presence. Or they're paying for Google ads and are hungry for more business. Target local contractors who want to scale and see the value of what you do, and recognize the potential ROIs. You can find lead generation customers on social media platforms like Facebook. Or you can do a simple Google search. (Check out pages two and beyond).

The industries that pay the most for leads are generally high to mid-ticket based niches. But if you have one with super high volume. Even if the industry is a low-ticket niche, you can still create a lucrative payment arrangement.

How Does The Local Lead Generation Business Model Work?

A local lead generation service is an online business that's easy to set up and includes five basic steps:

  1. Pick a niche
  2. Build your digital assets
  3. On & off-site optimization
  4. Sales & prospecting
  5. Scale your company

Of course, you need to create a local lead generation strategy that should include the following:

Niche Selection & Building Your Sites:

Niche selection is key to being successful. It's about picking the right service in the right city. Then build micro websites targeted for one service in one town and aim for a population between 75K-250K. You can also leverage targeted lead gen. Break down the niche and focus on a particular sub-niche for a specific service. Focus on a niche that doesn't have a ton of competition. (A low number of paid ads and one that doesn't have the same company at the top of the map pack and organic search results. But one that still has enough competition). Then you'll have choices when it's time to rent your site.

On & Off-Site Optimization:

On and off-site optimization includes using basic SEO strategies to show up at the top of Google for specific search terms with high search volume and low competition. (A few strategies include content creation, citations, backlinks, GBP-formerly referred to as Google My Business-etc.). Get to the top of the SERPs and drive free traffic to your site.

Pro Tip: Target specific keywords with high search intent that you can rank for fast.

Sales & Scaling:

Sales and scaling are how to make money with the model. Once you're at the top (or close to) of Google, you own prime real estate and will get organic traffic. Then your site produces leads that you can sell for profit. There are three main types of leads:

  • Cold: People you don't know or have no connection to
  • Warm: Individuals you're connected to through mutual acquaintances
  • Hot: People you know well 

You're not paying for paid ads. So give your cold or warm leads a couple of free potential customers to pique interest (and make sure they're a good fit for your business). But of course, you own the sites, tracking number, and leads, so you pick who you work with.

To start your lead gen agency, consider securing an LLC or a Sole Proprietorship. If the goal is to build an empire, an LLC is the better option. (Then you're set up for success out of the gate when in a position to hire a team).

What Are The Pros & Cons Of Local Lead Generation?


Easy to validate and in high demand

Recession-proof with minimal start-up costs and low overhead

You leverage Google to produce organic traffic and don't spend money on paid advertising


It takes time and money for your sites to rank

Business owners don't always see the value in your service

You need to learn the skills and work hard to achieve real results

What Is The Biggest Challenge For Lead Generation?

The biggest challenge for lead generation is landing your first deal. You need to find a small business owner who sees the value in the service. You need to make more offers and talk to enough local contractors. Then, do the work and remember to follow up. The goal of lead generation is to make a profit by selling your leads. Lead generation isn't difficult, but it takes some hustle.

Be willing to step out of your comfort zone and ask people for money. Again, the business model isn't hard. But most people lose money because they don't have a sales process or a tried and true system to land paying clients. So you need to know how to get your next client and figure out how to get the deal. 

People who fail with the business model lack motivation and don't build enough sites. Other people create websites in the wrong niches because they didn't do their due diligence, and some individuals just quit. Nevertheless, the concept works and is the best online business model in 2024

Is Lead Generation A Good Business Model?

Lead generation is a good business model; it's how I make a passive income of $52K/month. First, consider that a company needs leads to stay in business. Then, add that over 10 million business owners in the USA don't even have a website. Yet, the future is online, and there are 8.5 billion searches on Google every day. 

Get your digital assets to the top of the SERPs, and you get a ton of eyeballs on your sites. (People who want to use the service you're promoting find you first). After that, each online property you rank and rent can make you $500-$2000/month. So it can take as little as a couple of weeks to six months to make money from lead generation.

If you presell your websites, you can make money before you even rank them. Of course, how much money you make with lead generation depends on how many rank and rent websites you build. But if you create an empire, you can secure a cash flow that doesn't have a ceiling on income. That's how you create a legacy and generate passive income to get rich from lead generation in 2024

How Can I Generate Leads Fast?

Generate leads fast by using paid ads like Google Ads or Facebook Ads. The local lead generation business focuses on ranking in a local market. So you can rank faster than at a national level. You can also niche down and concentrate on a super-targeted sector of the market. Plus, most business owners don't know how to rank their sites. (So you can get to the top of Google in as little as six weeks).

Niches with a higher competition or a bigger population will take longer (up to 6 months). But do the market research, and you can generate a lead in as little as 2-3 weeks. Of course, you don't need to be at the top for your site to start producing. Instead, connect with a small business owner once you have a steady stream of traffic. Then set up a payment arrangement and start making money.

What Is The Future Of Lead Generation?

The future of lead generation is limitless. Globally, there are 5 billion online, and the internet is still growing. Consider that 63.1% of the world's population is looking for products and services online. Each lead gen site you build and rank has the potential to be an income source. The more digital assets you produce, the more money you make; this is why the local lead generation business model is legit.

Local lead generation is profitable; in fact, it's highly lucrative. Your sites don't take much work to maintain once ranked. And you can do lead gen from anywhere in the world. Once you understand the local lead generation business model process and can develop your systems, it's a way to secure passive income without investing a ton of capital. 

Why Local Lead Generation Is My Number One Recommendation In 2024

Local lead generation is my number one recommendation in 2024. It’s the only online business model that has allowed me to scale and achieve a consistent passive income stream. I've tried several online business models, including affiliate marketing and dropshipping. But I was never to reach the level of income that I've secured with this business model. 

You can create and rank more than one site at a time and build as many as you want to scale super fast. You don't need a ton of cash to start, and once your site ranks, it's pretty much hands-off. Take this site below, for example. I built this site in 2015. It took me about 10 hours and cost around $500. But this site has been making me $2000/month for seven years, and I don't need to touch it.

Local lead generation

Instead, a local company sends me a monthly check, and I make money on autopilot. Even better, this is only one lead gen website of over 80 I own. That's the power of high quality leads. And why the local lead generation business model is the best way to create passive income in 2024


The local lead generation business model is about becoming a lead magnet. Master the skills to leverage online tools to drive a sales lead that converts to a potential customer. Next, learn how to find profitable niches in the right city and what niches to avoid. 

Network with local business owners and excel at your craft. But you will make a passive income if you build and rank enough digital assets. Plus, there's no limit to your income potential. The future is on the internet. And in 2024, the local lead gen business model is the best way to make money online. 

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Ippei Kanehara

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

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