HOW TO EARN HUNDREDS OF EXTRA DOLLARS WEEKLY BY RUNNING A HOME BASED ANSWERING SERVICE
Your Best Opportunity To Turn Your Phone Skills Into Cash!
INTRODUCTION
Do you enjoy talking on the phone?
Does your voice have a friendly, cheerful tone?
Are you well-organized?
Do you need a few hundred extra dollars each week?
If you answered "yes" to each of the four questions listed above, then
you are a great candidate to pursue one of the most lucrative and easiest
home-based businesses that exists today! It's very inexpensive to set
up and, depending on your individual ambition, you'll earn thousands
of dollars each year without having to leave the comfort of your home.
Ironically, it's the advancement in technology that's creating this
exciting opportunity. Fancy, complex phone-answering systems have left
customers talking to computer generated voices, leaving messages on
"voice mail" and pressing numerous telephone numbers to work their
way through to conversing with an actual human being.
While these systems "free" people up from the phones in a business,
they frequently frustrate clients and potential customers to the financial
detriment of the firm.
Unable to easily reach a human voice, many individuals simply go elsewhere
for the services they need.
Fortunately for everyone, employers are recognizing this problem and
solving it by contracting people like yourself to answer the phones
when they can't. That personal touch you can offer can mean the difference
in obtaining or keeping a client. As a professional answering service
business, you can take messages, deliver specific messages to callers,
clarify the intent of calls and even arrange meetings with customers.
This booklet will illustrate how you can set up this type of home-based
answering service business. It's your chance to talk- and earn money
doing it!
GETTING STARTED
Business needs for an answering service can vary considerably. A company
may need a phone to be answered all day, part of the day, after hours
only, or 24 hours a day. You can enter this profession at any level
you choose. The amount of equipment you'll need to get going will also
fluctuate depending on how much time you want to devote to your home-based
answering business.
Most often, businesses need their phones covered during an "extended"
work day, say 8:00 A.M.- 8:00 P.M., with an answering machine taking
over the other, less likely, 12 hour call period. Twelve hours can
be a long day if you're going it alone, so you may wish to solicit
businesses that generally are looking for the phones to be answered
from 9 AM to 5 or 6 PM. This makes it more likely for you to do the
job yourself and work it easily into your family's schedule, too.
Once you identify your work hours, you can begin the task of soliciting
businesses to contract with you. Before embarking on this important
effort, you should establish a goal of how many companies you want
to represent. You can certainly take on more than one company if all
you're doing is answering the phone.
How many businesses you take on will dictate how you set up your service.
The easiest and most inexpensive way to begin is to have a separate
phone line and phone for each business you contract with. You would
then mark each individual phone with the company name as an identifier
for you when the phones begin to ring.
This is the best route if you're going to work with ten or fewer businesses.
If you intend to take on more than ten firms, then it would be more
cost and space effective to lease a switchboard from your local telephone
company. A switchboard can accommodate a substantial amount of business
activity for you.
Installing separate phone lines should run less than $100 each (possibly
higher in some parts of the country). You will also pay basic monthly
charges for each phone. This should average about $20-25 per month
(again, possibly higher in some parts of the country). If you are
buying actual telephones, these can be acquired inexpensively at local
stores.
Before buying all these phones and contracting with businesses, check
with the phone company to see how many extra lines you can obtain.
There may be a limit in your residential neighborhood. How many clients
you can take on will depend on the number of lines you can install
You might consider opening up an office in a nearby commercial area,
where the number of lines you need can be accommodated. However, this
is beyond the scope of your home-based answering service.
The amount and type of equipment you obtain will be dictated by your
ambition and your budget. It can be as simple as individual phone lines
or as complex as computer screens that flash messages or record instructions
for you to convey.
The more sophisticated the equipment, the more money you'll have to
spend. Of course, the more business you can handle the greater the
financial reward. This is something you'll have to decide for yourself.
If this is low-volume, extra money kind of work, spend as little as
possible and take on only one or two clients. If this is to be your
new career, then consider the larger investment to handle a high volume
of calls.
The key to your success does not rely solely on the equipment. Your
answering business is providing important customer service for a company
and, as such, it's your voice and congenial manner that provide a greater
value. If you're working with small to medium sized businesses, you
probably won't need the latest and greatest phone system to handle
the work.
The option to installing numerous phones is to lease a switchboard
from your local phone company. Find a convenient space in your home
to set up your work area, and clear a space for the switchboard. Once
set up, it's costly to move, so make your home "office" choice wisely
when a switchboard is involved.
The switchboard you'll get from your local phone company is model no.
557 or TAS-100. This type of switchboard can handle up to 100 incoming
lines, but you need only activate the actual number of lines you intend
to use. This large number of lines gives you great flexibility in the
service you can provide.
Switchboards offer a variety of extras, including room for another
operator if your services demand the work of two people, and a secrecy
switch to secure the phone lines for your clients.
The switchboard will come with a complete operating manual. Read it
carefully! It can help you understand the variety of services you can
provide. If training sessions are available through your local phone
company, attend them! Knowledge is powerful-and profitable!
TYPES OF HOME-BASED ANSWERING SERVICES
Now that you've identified the system and volume of business you are
trying to acquire, let's review the types of home-based answering service
you can provide.
This booklet has already noted the importance of your phone "personality"
as the main key to your success. The better you are at handling people
on the phone, the greater the number of services you can offer, from
straight message-taking to complete customer service. Your grammar
must be sound, your diction easy to understand. To improve in these
areas, there are many self-improvement courses available through local
community colleges and other learning outlets for a nominal charge.
Businesses have a variety of phone needs, depending on their size and
complexity. The phone can save them time and money in communicating
with their customers. They may be looking for any of the following
services which you could provide:
ú Incoming Message Services, both during and after normal business
hours;
ú Complete Answering Service where customers believe they are calling
the actual business office;
ú 800 Number Service;
ú Order Taking Service, where customers call in to order a specific
product or service they have seen advertised;
ú Call Forwarding Service, where the business forwards calls to you
only when their personnel leave the office;
ú Message Delivery Service, where you not only take messages, but you
also call people for your business client;
ú Voice Mailboxes, where you have lines that record messages, but also
call people for your business client;
ú Beeper Service, where you take the call and then page the client
via a beeper;
ú Computerized Telemarketing, where you hook up a computer to a standard
phone and program it to dial telephone numbers to help a business to
prospect for clients or to advertise;
ú Appointment Setting Service, where you call a list of individuals
furnished by a business to set up appointments for the firm's sales
people;
ú Phone Sales, where you are calling on behalf of a business to sell
a specific service; and,
ú Surveys, where you call designated people to obtain answers to an
opinion survey.
All of these services are possible via the phone. You don't have to
offer every single service, simply the ones you can comfortably perform.
The phone skills required differ widely depending on the service.
Once you select the services you wish to provide, you can begin looking
for clients.
HOW TO OBTAIN CLIENTS
The closer you are to a large metropolitan area, the greater your potential
for income in a home-based answering service. However, small towns
are also in need of your services. Many of the businesses may be owned
and run by a sole proprietor who spends the bulk of the day outside
the office and away from the phone.
This is a good place to start. Virtually anyone who works away from
his or her business might have need for an answering service. Salespeople,
repair services, people on call (like towing services), survey organizations
and firms that might use the computer-based automatic dialing system
are all potential clients to whom you can offer your phone services.
The phone book, the local newspaper, the small "Pennysaver" type of
publications and community bulletin boards are all places where you
can find the type of business most likely to be interested in your
service. This will give you a solid local list with which to begin
your prospecting.
In addition, here is a short list of those companies that might be
interested in the phone sales service which you set up on a computer
basis to automatically dial a pre-set number of calls:
Amway Mary Kay Magazines
Auto Dealerships Portrait Studios Vitamin Companies
Avon Real Estate agencies Insurance agencies
Coin Dealers Remodelers
CPA firms Roofers
Decorators Stockbrokers
House painters Tupperware
The businesses that can utilize your ability to advertise for them
using the phone are substantial, and include:
Retail stores Credit agencies
Restaurants Wedding services
Modeling schools Furniture stores
Employment agencies Collection agencies
Financial service firms Hotels
Dance schools Carpet cleaners
Car washes Video stores
Travel agencies Pet services
You'll probably start out with a few message service contracts, requiring
only a few lines, but you could easily work your way up to dozens of
lines and services.
Remember to ask your early clients for referrals to others whom they
may feel could use your service. Your existing clients are the best
source for leads!
YOUR "HOME" OFFICE
Setting up the business in your own home is a matter of knowing how
much business you intend to do. If your goal is to generate some extra
cash in addition to other work you do, you'll only want a few clients
and a few phones. Select a room in your house for you to answer these
phones.
The room should be comfortable, adequate in size and able to support
several phones. You may want to use an area in which you can arrange
a long table to be set up with the phones arranged on top, the wires
underneath.
If you take on a switchboard, you may still be able to work out of
your home. The switchboard will require space and a floor strong enough
to support its weight. Your phone company representative can indicate
the structural strength necessary to accommodate a switchboard in your
home.
If you anticipate having a vast number of clients, or your residential
area won't accommodate the phone lines you need, you may wish to seek
out a commercial space to rent. Generally, 350-400 feet should be sufficient
space to get started.
Current national office vacancy rates are running around 15-17%, so
there should be good deals on rent out there for you. The appearance
of the building isn't all that important since you're a phone business-your
clients will call, not visit!
In addition to the room for the phones or switchboard, you'll want
to have some work space. Many telephone answering services also contract
for other jobs to keep busy while the phones are quiet. Services like
envelope stuffing, typing, order filling, addressing envelopes or
bookkeeping can all be done while operating the phone lines. Maximize
your time wisely!
Brightly colored walls, proper lighting, carpeting and cheery prints
for the walls can make the working atmosphere one in which you (and
any employees you might hire) will prosper. Employees will be a must
if you are trying to operate your phone service for lengthy hours.
A 24-hour service will require at least three to four employees.
Other employees will be helpful in giving you a break from the phones.
In addition, you can use "down time" to your advantage by making calls
to obtain more clients. It's hard to call on people if you're at the
phone for twelve hours each day.
TEN EASY STEPS TO ORGANIZING YOUR BUSINESS
- Obtain the proper equipment for your business. Make sure the phones
or headsets are easy to use. If you use a table and chair, make sure
the seat is comfortable and easy to sit in. Obtain a message "rack"
with slots to place your clients' messages so that when they call in
you'll have them handy to read. Install a time clock so that you can
punch in the time when the message was taken. Both the message rack
and time clock should be within arms length so you do not have to leave
your chair-and the phones! Discount office supply stores can provide
these items inexpensively.
- Make it easy to record basic message information. You can buy message
slips from your discount office supply store or you can use scraps
of paper that you cut up for use. Whatever the vehicle, make sure there
is room to write down the customer's name, phone number and any message.
You should also leave space for the date/time and to whom the message
will be addressed. Have plenty of pens handy! Don't run out of ink.
- Have an organized system for your messages. Once written, the message
should be filed in the message rack to read later to your client. Once
you've passed the message along, mark "SENT" on the slip and then file
it in a folder marked with your client's name. Save the messages for
at least a month (or longer, if the client requests).
- Use index cards to record basic customer information about each
of your business clients. This information should be kept handy and
given to customers if necessary. Knowing all about your clients' businesses
will make you more effective on the phone.
- Price your services competitively, keeping in mind your own monthly
expenses. Add your expenses up on an annual basis like the basic monthly
phone charges, equipment, office supplies and divide the total by 12
to determine a monthly overhead cost. Obviously, the revenue you generate
must exceed this amount each month to make a profit. The average rates
you can charge for your services can range from $30 to $50 per month,
the specific price related to the basic monthly phone charges you must
pay in your area. Determine a base number of calls that you can accept
under your standard rate (50, 75, 100). For any calls you receive over
that in a given month, bill your client on a per call basis (.25, .50,
.75). You can contact competitors and find out what they charge to
determine what your price range should be if you aren't sure of the
rates you want to set.
- Contract for your services formally. Put together a standard contract
for both you and your client to sign. The "Business" section of your
local library will probably have some standard contract forms which
you can amend for your use. You could choose to engage an attorney
for this task, too. The contract should have a minimum length to it,
like 6 or 12 months, with options to renew it at expiration. You need
to plan on a certain amount of business and income and you can't do
that without a minimum service contract length.
- Select a business name that is descriptive but not limiting. If
you are not incorporating, you can use your name in the company title
if it's simple and easily pronounceable, such as "Marge Dean's Telephone
Services" or, better yet, "Marge Dean's Telemarketing Services", which
encompasses more tasks in a potential client's mind. If your name is
difficult to say, consider using the town name, as in "Dallas Telemarketing
Services". Since that may already be taken, you can also go generic
as in "Diversified Telemarketing Services" or "Associated Answering
Services". Keep it simple and adaptable.
- Select the type of business you want to be. Incorporation carries
the most prestige but it isn't always the most practical choice for
a very small business. You can always start as a sole proprietor and
work your way up as the business expands. A sole proprietor is the
simplest form of business structure, although you are personally liable
for all business debts. A partnership will be necessary if you have
someone else sharing the profits and expenses of the business with
you. An accountant and/or an attorney can illustrate the advantages
and disadvantages of each entity and help you determine what course
to take.
- Obtain enough supplies to launch your business. Be well-equipped
with the basics: pencils, pens, note paper, index cards, paper clips,
rubber bands, staplers these supplies should be purchased in quantity.
You achieve a savings by higher volume purchasing and also avoid possible
work stoppage because you are constantly out of supplies. Don't forget
a ledger notebook to record revenue and expenses. Also include a calendar
to note important dates. Order business stationery and envelopes along
with business cards. Remember, you are trying to create a positive,
professional image. If you wish, hire a graphic artist to design a
logo for your business. This should appear on the card, letterhead
and envelope. Order blank paper of the same color as your letterhead
to write letters or memos longer than one page. Shop around for a print
company. There are often "specials" that printers run to attract business,
usually on items like business cards and stationery. Your initial order
will be more costly because of set-up charges to put your information
on plates to print. Once done, however, it is inexpensive to order
reprints when your supplies dwindle.
- If your business outgrows your house, shop around for a good location.
Don't consider moving out of your "home" office unless you've redone
your expense calculation, divided it by 12 and see that your new monthly
expenses can be eclipsed by your revenues. If you decide to find an
office, consider sharing a space with other professionals, where business
needs like a photocopier, fax, receptionist, etc. can be shared among
the occupants. You'll still have your own private office, but it will
save dollars to combine other resources. Shop for office furniture
to get the best price possible. Check the newspaper for notices about
bankruptcy auctions and Sheriff's sales where you can often obtain
nearly new, higher quality equipment for little money. You will need
a desk, table, filing cabinet, chairs, typewriter or computer, calculator,
book/utility shelves and a wastebasket to get started.
THE ART OF NETWORKING
To be successful in your business you must develop a network of contacts.
These are people you know who can provide you with a favorable introduction
to potential clients. The more people in your network, the better the
prospects for success. With an increasing number of contacts comes
numerous opportunities to offer your services to people who may well
be interested in contracting for them.
You network constantly until it becomes a routine part of your business.
No matter who you are talking to at the moment, that person could be
helpful to your business in some way. Most people are complimented
by your faith in them as a contact person since it emphasizes the influence
they can provide.
Networking is a reciprocal process. If you are seeking someone's help
to obtain a lead, you must also be prepared to assist your contact
in the same way.
Use your business card to introduce yourself where possible, perhaps
at a social setting or at local meetings like Rotary or Kiwanis. Chamber
of Commerce meetings also hold some potential to meet other business
owners in the area. These are the people you want to meet since the
idea of an answering service may be important to them.
Don't be afraid to talk about what you do. When meeting someone new,
the conversation inevitably turns to the type of business you're in,
so describe it with the enthusiasm you have for it. You don't need
a resume. Your card and your voice are more valuable in networking.
Your immediate and extended family is the best initial source of networking
you can have. Get in touch with your local relatives, explain what
you are doing and see if they can provide leads for you.
Past business associates, college friends, church members and other
individuals in organizations to which you already belong can be great
sources for prospective clients.
Join organizations! Kiwanis and Rotary meet every week, with new members
(and prospects) coming in all the time. If you play golf or tennis,
talk to your partners. Consider the people you see regularly- post
office, hair salon, cleaners, gas station- all of the normal daily
activities encompass some form of business which could use your service.
Once you've made a network of contacts, stay in touch with them. A
birthday card, a newspaper article of interest, a note about a promotion-all
of these are ways to communicate with your network people when you're
not asking for names. You are creating the opportunity, however, for
future business.
MARKETING YOU MUST DO
While networking can be an effective marketing tool for you, it is
not the only way to put your name and services in front of a potential
client. Further, many individuals do not like the practice of networking
and would prefer to solicit prospects in another way.
Marketing is a collection of activities that helps you to obtain business.
These actions may involve advertising, direct mail, press releases,
public appearances, promotional flyers or brochures. Your services
will not be contracted unless people know about them. This is where
marketing is useful. Marketing should create image for you, one that
is professional and encourages individuals to look further into what
you have to offer.
Marketing is also about understanding what your base of potential clients
is and where they are located. Narrowing down your scope of marketing
to concentrate on the people most likely to contract for your answering
service requires thoughtful analysis. For example, you could begin
by focusing on just sole proprietors at first. These are people most
likely to be working away from their business and in potential need
of phone help.
There are numerous media outlets to advertise your services. It costs
money to advertise in newspapers or to send brochures out to targeted
potential customers, so gauge your budget accordingly when selecting
your marketing outlets. Radio and television advertising also carry
a price, but can be very effective in reaching a broad number of people.
Your marketing pieces whether a brochure, advertisement or commercial,
must list plenty of reasons for your services being important and specifically
why you provide these services. You should decide on and then list
the services you offer, as some or all of this copy will become a focal
point of any piece you create.
A brochure can provide a professional image for you while serving functionally
to explain the services you provide. It should be simple in appearance
and easy to read and absorb. Be informative without being wordy. Anticipate
and answer the questions someone might have about your type of business,
such as how many hours per day your service will take calls.
The brochure layout is usually a six panel, front and back 8 1/2 X
11 inch sheet of paper. The panels include:
ú a cover indicating your business name, address, telephone number
and logo;
ú first inside panel describing your business and who a good prospect
for your services would be;
ú middle inside panel should list your services and a brief description
of each;
ú third inside panel should provide a list of testimonials from others
who have used your service, or, if new, from network contacts willing
to describe your phone voice, organizational skills and reliability
and put their name and business next to their quote;
ú middle outside panel should contain a brief biography of yourself
and your credentials along with any partners or other employees you
may wish to highlight; and
ú final outside panel which will be designed as a self-mailer with
your return address on it. You will mail the brochure using this panel
as your envelope.
You should write the copy for your brochure, but get some help laying
it out from either the graphic artist who designed your logo or the
printer who will be printing the marketing piece. Using two colors
and minimal design should keep the price of producing these mailing
brochures very reasonable. The brochure can also be used as a handout
piece. It adds credence to your business venture and lifts you above
those others who don't bother investing the money in this important
marketing tool.
Advertising can also put your name and service out to a variety of
people. A classified advertisement offering your services may initiate
some phone calls, but a larger display advertisement is more likely
to draw your potential prospect's attention. Your advertisement should
be written to attract the eye of the reader. The headline is the most
critical part of the piece, and this will either invite the reader
to keep reading or to go on to the next page.
Your key service is to help a business avoid losing money by having
that personal contact when someone calls their office. This concept
is what your headline should incorporate, such as "How To Make Your
Business More Profitable" or a similar theme.
People buy most often for emotional reasons. You are selling a service.
Thus the advertisement you create must have an emotional pull that
can convince a person to call you for more information. An advertisement
simply listing your services won't generate the response you want and
need. However, if the emotional enticement is to help a business financially,
to provide that human touch in a mechanized world, you will have a
better chance of attracting potential clients.
The remainder of the advertisement can list some details about you
and the services you provide, but the headline remains focused
on emotion. Certainly you can continue with the emotional copy throughout
the piece, mixing in some of the important details. The better story
you tell, the better your response. But the headline will cause people
to read the story. A poor headline will send most readers elsewhere
and a good story will remain unread.
Be positive! List the benefits of working with you, not the disadvantages
of passing up your services. The headline should concentrate perhaps
on SAVE THOUSANDS OF DOLLARS TODAY rather than AVOID LOSING THOUSANDS
IN YOUR BUSINESS. There are professional ad agencies and copywriters
who can assist you in getting it right. It may be worth the price to
put an ad together that generates substantial response rather than
saving the money, writing the ad yourself and seeing little or no reaction
to it.
The most effective ads tell us enough information, but leave the reader
curious to know more, thus inviting the person to call in. Once you
have the person calling in, you have an excellent chance to turn that
prospect into a client. After all, it's your phone voice and manner
that you're trying to sell, isn't it? Here, the individual will get
a first hand chance to see how their own clients will be handled should
you strike up a deal.
Run your advertisement in your local newspaper or other smaller community
publications. Try radio advertising. It's a cost-effective way to
reach people you may never get to contact otherwise.
The other marketing option for you is direct mail. You can generate
some incredible responses here, but if you are going to undertake the
expense of a direct mail operation, you should certainly secure some
assistance from professional copywriters to get the most "bang for
your buck". Postage costs alone are high with direct mail so you need
an effective piece.
Direct mail is tricky, because you must get your message across with
a minimum of words. The direct mail piece is meant to entice a prospect
into calling for more information. Stay focused on this. If you try
to do too much, few (if any) people will read your piece and respond.
The importance of immediate action must be emphasized. The piece is
meant to motivate the prospect to act now, today; not tomorrow, next
week, or next month. Effective wording can accomplish this motivating
technique.
Direct mail can help you reach thousands of people you couldn't call
yourself. It expands your capacity to reach potential clients and makes
the most of your limited manpower and, possibly, resources.
Look for a direct mail house that works with copywriters. There is
a big difference between advertising and direct mail, so find an individual
with direct mail credentials. You can write the copy yourself if it
will effectively produce the type of piece described.
If you intend to undertake the copywriting yourself, remember these
basic principles:
ú Headline! Headline! Headline! Your title opening or paragraph in
your direct mail piece has to make people want to open it up and read
further. Don't be coy! List a key benefit immediately! Get your prospect
to turn the page!
ú While listing your benefits, keep them at reality level. If something
sounds too good to be true, it usually is. People are wary today of
others who over-promise, so as you highlight the benefits of your business
service emphasize how you are able to offer all these benefits. Utilize
the word "you" to let readers know they will be on the receiving end
of the benefits.
ú Be as precise as you can. Give prospects tangible services and explain
simply how they work. People are bottom-line today and want to make
up their mind to pursue a service or not in quick fashion. Specifics
give people enough data to make up their mind and will almost always
help you to get a response. It will also not waste time for you and
those who are not interested in your services.
ú Obtain some testimonials to use other people's words, other than
your own, to describe your benefits and services. Use complete names
to indicate authenticity behind the comments.
ú Make your copy conversational, easy to read, simple. Words should
be short. Sentences should be brief. Paragraphs should be concise.
The copy should encourage the reader to act. If a reader understands
the copy, the action you want (a response) is more likely to happen.
ú Incentives often motivate people to act immediately rather than procrastinate
.
If for a limited time (14 days, 30 days) your service can be obtained
for less than the usual monthly rate, you've encouraged people to call
in and take action. If they understand the service you offer and how
it can benefit them, and if you add a feature such as an incentive
to call NOW, you'll probably increase your response by a large margin.
Some people need that extra push.
ú Guarantee your work. Offer a no-risk, 30 day money back deal to try
your service. If the customer isn't satisfied, offer the refund. This
will reassure the potential client and, since you have great confidence
in your own ability, you really aren't giving anything away since
you know people will benefit from your services.
Your direct mail piece must sell you along with your services. In a
phone business, you are the most valuable asset. People buy from people.
The more satisfied someone is with you, the more likely the chance
of securing a contract.
Marketing is a potpourri of potential activity. Create a marketing
strategy and follow it through. You can't help but generate a number
of individuals interested in what you have to offer. Remember, too,
that marketing is an ongoing process. You are always on the lookout
for new clients. The value of continued marketing efforts is proven
by a constant stream of prospects- and financial security for you!
ADDITIONAL TIPS FOR SUCCESS
Here are a few suggestions to attract prospects, save money and generally
launch a successful business venture.
During the direct mail phase of your marketing campaign, an incentive
was offered to bring in new clients. The lifeblood of any business
is new people coming into it. What better way to encourage them than
through the use of a free promotion!
When you give something away, you can expect to find someone there
to take it. This will also be true in your marketing solicitation.
If you offer a reduced rate for a period of time, or contract for five
months and give the sixth month away free, you will entice people to
take action.
The irony of this situation is that the more you give away, the more
business you will attract. If you sent a direct mail response out and
obtained three clients who contract with you for six months at $50/month,
you've attracted $900 worth of business. But if a giveaway of the sixth
month free doubles your response, you'll contract six people paying
for five months at $50/months, but increased your revenue. You gave
away six free months, but increased your clientele and your revenue
doing it. In addition, you now have clients who are potential renewers
when the contracts expire.
You could also give away a free gift to new enrollees instead of the
month's free service. A number of promotional companies exist that
can help you select an appropriate gift and buy it at bulk rate. Your
giveaways can sometimes amount to only $4 or $5 per person, and you
end up with six and twelve month contracts as a result.
With incentives, offer something tangible and relevant to your business.
Don't attach any strings. Make it a straightforward offer with no fine
print. People appreciate, and are more likely to respond to, this type
of offer.
Another tip for success is to minimize your printing costs. Direct
mail costs money. Brochures cost money. Business cards and stationery
cost money. Take some steps to keep your printing bills within reason.
Shop for competitive quotes. There are usually a number of printers
in a given area, so you should be able to find three or four to bid
on your job. If you are having business cards, stationery and brochures
done, do them all at once and advise the printer to quote each job
both separately and combined. Often, a combined job can reduce your
costs.
Be specific about the job. Get all the costs up front. If you want
the printer to set the type, fold the piece, whatever, be sure you
have all this priced out first.
Stick to standard sizes and colors. Avoid heavy paper stock. You don't
have to use postcard stock, either. Give the printer ample time to
complete the job. Rush work costs money and the costs will be passed
on to you.
Printing costs can eat up a budget quickly. The more homework you do
up front, the less you'll spend and the more likely the piece will
be done to your satisfaction.
As you solicit additional business, your base set of clients can hopefully
provide some solid testimony as to the value of your services. Securing
these endorsements can be the foundation for a new marketing campaign
to add new clients and "grow" your business.
You'll likely have to ask for this feedback yourself. Most people don't
take the time to write a letter, but most often simply comment to you
personally about their pleasure with your services. So, ask them to
put their thoughts down on paper. If someone has written, ask their
permission to reprint it and use their name. Or you can initiate written
comments by sending out a customer satisfaction form which encourages
comments from your clients.
Whichever way you choose, these endorsements can help you obtain new
business.
Finally, don't overlook the outlets through which you can publicize
your business- at no charge! It amounts to free advertising and you
should be watchful for the opportunity this presents to tell people
about your services without increasing your marketing budget.
News releases about your business can generate some publicity for you.
Many smaller newspapers publish a Business Section where new businesses
in the area are noted and a few specifics spelled out. The newspaper
won't have the information to print unless you send them a news release.
Send your release with a cover letter to the city or business editor
of your local newspaper, the managing editors of business trade publications
and the news directors for local radio and television stations.
The cover letter should briefly state the positive aspects of your
business and why your services would interest their audience.
The news release is more formal and should be typed on one sheet of
paper, double-spaced, and headed "NEWS RELEASE" with the day's date.
You should also list a "FOR MORE INFORMATION" header followed by your
name, address and phone number. The copy itself should be short and
to the point, but with the same idea as an advertisement. The first
paragraph should be your "headline grabber", the idea of which is to
get the reader (editor or director) to become interested enough to
keep reading. Emphasize the convenience of your service to small business
owners who don't have an office and generally are out working all day.
Don't be long winded. Sell them on your basic idea. If they're interested
in publicizing it, they'll call you for more information.
Emphasize how your business relates to current news trends, such as
the age of computers which takes away some of the human touch, and
you're trying to restore that so the customers of a business will be
able to talk to a person rather than a machine. Make it newsworthy.
You'll have a better chance of getting the free publicity you seek.
START-UP COSTS AND HOW TO FUND THEM
Most of the start-up costs of the phone answering service business
have already been detailed in the previous text. If you do not have
the money to start your business but feel certain it will be a success,
try and raise money yourself to get the business off the ground.
The easiest way to obtain money fast is to talk to your friends and
relatives about it. Getting them to invest in your idea will be an
easier sale, perhaps, than talking to complete strangers about it.
The downside is that if the business fails for any reason, that relationship
may never be the same.
If family and friends are not potential investors, you must look outside
this familiar circle to other candidates. There are two types of investors
to seek: those who wish only to put money into the business hoping
for a return, and those who wish to contribute both money and talent
in exchange for an equitable share of the profits.
This latter individual would be considered an active partner while
the former investor would be more of a silent partner. The active partner
would share the duties of the business with you, put up some money
and thus own a percentage of the business equal to their time, talent
and investment. The silent partner may put up the entire amount needed
but gives you a share of the profits since you are doing all the work
of running the business.
Partners can own whatever share of the business all parties deem fair;
there are no set guidelines here. There are individuals known as venture
capitalists who are constantly on the watch for potential lucrative
new businesses to invest money in, with an expectation of a large return.
You can advertise in the paper as seeking venture capital for a phone
answering service business and even list the amount of money you are
seeking. Then, when contacted, the real negotiations will start.
You will be expected to provide a potential investor with information
about your background and qualifications to run a phone answering service
business. You should have a detailed marketing plan already worked
out along with revenue and expense projections to show your potential
investor(s) what they can expect for a return on their investment.
The more prepared you are, the better likelihood of attracting the
money you need to get started.
You could also try to put up the cash yourself and be a 100% owner.
Review your personal asset and liability situation to see if enough
money can be raised to initially fund your start-up costs. Insurance
cash value, savings, sale of goods you could do without, credit card
advances, even a second mortgage are all ways to personally raise money
for your business venture. You must decide if this is the right way
to go. Do you believe your business can be a success financially? If
so, there is money out there for you to find so you can turn your dream
into a reality.
The other option for you may be a small business loan. Do you have
a good credit rating? How well do you know your local banker?
Again, you must have an exceedingly high belief that your business
will take off since loans have to be repaid. If you are unable to raise
the money you need any other way, a small business loan may be your
best bet to acquire the capital you need to get started.
GETTING HELP FROM THE SBA
The Small Business Administration has made it easier to apply for smaller
loans today. If you're seeking cash in the amount of $50,000 or less,
the paperwork required has been diminished significantly.
What's more, your local community banker may be able to approve the
loan personally without having to send it to the SBA. The SBA is guaranteeing
the loan so local banks are more apt to lend money to new ventures
as well as established ones.
You will have to put up at least 25% of the cash you need. The SBA
will not underwrite 100% of the venture. But, given the relatively
low start-up costs for a phone answering service, you may not need
more than $50,000 and can likely raise up to $12,500 personally in
order to obtain the other $37,500 from the SBA. This would give you
100% ownership in your business with only the loan to be paid back.
The SBA has several other types of financial assistance programs, too.
For potential small business owners that don't have adequate credit
to obtain a loan through the usual bank channels, the SBA can provide
the funds through several different loan programs.
Your small, community banks are the firms that generally work closely
with the Small Business Administration to provide these dollars to
people in their area. Women and minorities are especially considered
under a number of different SBA loan programs.
Some of the special circumstances loans which are available are economic
opportunity loans, handicapped assistance loans and displaced business
loans. These are all programs to help disadvantaged individuals obtain
the money they need to get a good idea off the ground.
Applications for loans will require much the same data as you would
have prepared for a venture capitalist or any other potential investor
in your business. Your background and qualifications, your marketing
plan, revenue and expense projections and the need for the services
you provide will all have to be discussed thoroughly with the loan
officer before you can expect any loan approval.
A good credit rating is helpful in obtaining the loan. If you have
a history of paying back what you owe, chances are you would pay this
loan back, too.
There are a number of Small Business Administration locations near
you. The following is a list of regional offices and development centers
that can assist and direct your application for a SBA loan:
NATIONAL OFFICE:
Small Business Administration
1-800-827-5722
REGIONAL OFFICES:
60 Batterymarch Street 26 Federal Plaza
Boston, MA 02110 New York, NY 10007
(617) 565-5590 (212) 972-5270
231 St. Asaphs Rd. 1375 Peachtree St. , NE
Bala Cynwyd, PA 19004 Atlanta, GA 30309
(215) 962-3700 (404) 347-2441
219 S. Dearborn Street 1720 Regal Road
Chicago, IL 60604 Dallas, TX 75235
(312) 353-5000 (214) 767-7629
911 Walnut Street 1405 Curtis Street
Kansas City, MO 64106 Denver, CO 60202
(816) 426-3316 (303) 294-7186
450 Golden Gate Avenue 710 Second Avenue
San Francisco, CA 94102 Seattle, WA 98104
(415) 744-6820 (206) 220-6500
SMALL BUSINESS DEVELOPMENT CENTERS
Alabama
Alabama International Trade Center
University of Alabama at Brimingham
400 North Martha Parham
Tuscaloosa, AL 35487
(205) 348-7621
California
Export Small Business Development Center Export Small Business Development
110 E. Ninth Street, Suite A761 Center Satellite
Los Angeles, CA 90079 300 Esplanade Drive, Suite 1020
(213) 892-1111 or (800) 371-1110 Oxnard, CA 93030
Florida
Florida Atlantic University Small Business Development Center
P.O. Box 3091 University of Central Florida
Boca Raton, FL 33431 P.O. Box 2500 Building CEBA II
(407) 338-2273 Orlando, FL 32816
(407) 823-5554
University of West Florida
College of Business, Building 8
Pensacola, FL 33251
(904) 474-2908
Georgia
International Trade Development Center Small Business Development
Center
University of Georgia Kennesaw College
Chicopee Complex P.O. Box 444
1180 E. Broad Street Marietta, GA 30061
Athens, GA 30602 (404) 423-6450
(404) 542-5760
Small Business Development Center
Clayton State College
P.O. Box 285
Morrow, GA 30260
(404) 961-3440
Illinois
Illinois World Trade Center Chicago International Trade Center
321 N. Clark Street, Suite 550 Bradley University, Lovelace Hall
Chicago, IL 60610 Peoria, IL 61625
(312) 467-0550
Louisiana
Louisiana International Trade Center
University of New Orleans
368 Business Administration
New Orleans, LA 70148
(504) 286-6978
Maine
Small Business Development Center
University of Southern Maine
96 Falmouth Street
Portland, MA 04103
(207) 780-4420
Massachusetts
Small Business Development Center
University of Massachusetts
Amherst, MA 01003
(413) 545-5580
Michigan
Center for International Business Development
Michigan State University
6 Kellogg Center
East Lansing, MI 48824
(517) 353-4336
Mississippi
Small Business Development Center
International Trade Center
Millsaps College
Jackson, MS 39210
(601) 354-5201, ext. 407
New York
Small Business Development Center Small Business Development Center
State University College at Buffalo Rockland Community College
1300 Elmwood Avenue 145 College Road
Buffalo, NY 14222 Suffern, NY 10901
(716) 878-4030 (914) 356-0381
Ohio
Small Business Development Center Small Business Development Center
218 N, Huron Street Lake County Economic Develop.
Toledo, OH 43604 Lakeland Community College
(419) 243-8191 Mentor, OH 44080
(216) 951-1290
Oklahoma
Small Business Development Center
Rose State College
6420 Southeast 15th
Midwest City, OK 73110
Oregon
Small Business Development Center
Portland Community College
One World Trade Center
121 SW Salmon Street Suite 210
Portland, OR 97204
Pennsylvania
Small Business Development Center Small Business Development Center
Lehigh University Gannon University
International Trade Center Carlisle Building 3rd Floor
301 Broadway Erie, PA 16541
Bethlehem, PA 18015 (814) 871-7714
(215) 758-3930
Small Business Development Center Wharton School of Business
Pennsylvania State University at Harrisburg University of Pennsylvania
Crags Building Vance Hall, 4th Floor
Route 230 Philadelphia, PA 19104
Middletown, PA 17057 (215) 898-4861
(717) 948-6069
Small Business Development Center
Duquesne University, Rockwell Hall, Room 10 Concourse
600 Forbes Avenue
Pittsburgh, PA 15282
(412) 434-6233
Rhode Island
Small Business Development Center
Bryant College
450 Douglas Pike
Smithfield, RI 02917
(401) 232-6407
Tennessee
Small Business Development Center
International Trade Center
Memphis State University
Memphis, TN 38152
(901) 678-2500
Texas
North Texas Small Business Development Center
International Trade Resource Center
2050 Stemmons Freeway, Suite 150
Dallas, TX 75258
(214) 653-1777
Small Business Development Center
University of Houston
601 Jefferson Street Suite 2330
Houston, TX 77002
(713) 752-8404
South Texas Border Small Business Development Center
University of Texas at San Antonio
San Antonio, TX 78285
(512) 224-0791
Washington
International Trade Institute
North Seattle Community College
9600 College Way North
Seattle, WA 98103
(206) 527-3732
FINANCIAL AND LEGAL CONSIDERATIONS
You're almost ready to start your new phone answering service business.
There are some financial and legal considerations that will impact
your business.
First, be sure to check with your local zoning office to be sure you
can run a home- based business if you intend to start in your own home.
Your answering service business is not a high customer-traffic business,
so it shouldn't be a problem, but check anyway as you may need a specific
permit to operate your business. It should only involve an application,
but could require a hearing, too.
You may have to have your home inspected to determine if it meets business-type
regulations for health, building and fire codes. If it doesn't, you
will have to make the necessary modifications to operate the business
out of your home. These alterations should not be major.
Check with an accountant concerning the tax-deductibility of a home-based
business. The Internal Revenue Service is more careful in checking
these deductions today. In general, the amount of space in your home
devoted to the business is eligible for a deduction. That area must
be used exclusively for business, however.
Once you determine the space involved, divide that into the total space
in the house to obtain the percentage of your home used exclusively
for business. That percentage will be applied to some of your usual
house expenses like your electric bill.
Keep a journal of expenditures for your business along with the corresponding
receipt. Record and file them by month for easy reference. Many of
these expenses are deductible to your business up to certain specified
limits. New tax laws can affect their deductibility, so it's best to
keep up to date through an accountant.
As a self-employed business owner, you would be filing a Schedule C
(Profit or Loss for Business or Profession) along with your regular
1040 form. Your accountant can brief you on other forms you need to
complete during the year, too. There is usually an estimated tax payment
to be made each quarter along with FICA and Unemployment taxes.
Insurance will also be a necessary part of your business life. Some
of the insurance is actually required.
Health insurance is a familiar vehicle to cover hospital and medical
bills. A number of states have enacted recent health care reform legislation
to aid small businesses in obtaining quality, affordable health insurance.
Contact your state insurance department for more information about
the programs in your area.
Workers' compensation is often required by law. This coverage provides
medical, hospital and disability income benefits for on-the-job injuries
or illnesses. This program is administered by each state individually
and you should check with your state insurance department to see
if you are required to carry this coverage. If you are the only worker,
some states merely recommend rather than require the coverage be carried.
Liability coverage may also be a good investment for your business.
This protects the business against liability for adverse actions which
affect your client(s). If you incorrectly record a message and that
error results in the loss of business to your client, there is always
the possibility of a lawsuit today. Liability insurance can be purchased
to cover the threat of a suit.
If you have a company car, insurance will be necessary and the car
must be designated for business use. This may or may not be necessary
in a phone answering service business, but if you call on clients or
potential clients, then you are using the car for business and may
be eligible for a business tax deduction for a portion of insurance
payments on the vehicle. Your accountant can verify the deductibility
of any item associated with a company-owned car.
If you are working out of your home, check your homeowners policy to
be sure your property listing includes any business equipment you have
such as phones or a switchboard. If you are operating the business
out of an office you purchased, you will need to have hazard insurance
to cover that facility separately.
Life insurance can be used to cover your life in the event of death.
This money can be used to continue the business if surviving family
members wish to do that. Disability insurance should also be considered.
This policy provides income to you and your family in the event you
suffer an injury or illness (at any time, not just "on-the-job") and
cannot work. Many insurance companies do not offer this type of coverage
to business owners who work out of their own home, but check with your
insurance agent to see what he or she can find.
If you have a partner, you might also consider some type of buy-sell
coverage so that if one of you dies or becomes severely disabled, the
healthy owner can buy the interest in the business back from the one
affected. Both life and disability insurance is available to fund this
need.
Finally, you should also keep an eye towards the day when you will
retire from working. Business owners are able to put money into various
pension-type vehicles on a tax-favorable basis.
There are three common types of retirement plans for self-employed
business plans: the Individual Retirement Account (IRA), the Simplified
Employee Pension (SEP) and the Keough plan (often called HR-10).
The IRA is a familiar vehicle that lets you put up to $2,000 a year
before taxes into a retirement plan. For many business owners, this
amount is insufficient, thus other vehicles where larger amounts can
be put away for retirement are more attractive.
A Simplified Employee Pension plan is similar to an IRA except you
can contribute much more to it, up to 15% of your income but not more
than $30,000 a year. That's significantly more than the $2,000 maximum
pre-tax contribution under the IRA. The Keough plan is similar to the
SEP except that the contribution percentage can be as high as 25%,
up to $30,000. This type of plan is usually selected by sole proprietors.
These retirement vehicles should be discussed with your accountant
for advice on the best avenue to pursue. Not only do these programs
serve as a source for retirement funds, they also assist the business
owner with reducing current tax liability. All business owners should
review their options carefully.
You should now have all the information you need to determine if a
phone answering service is the right business start-up idea for you.
Good luck!
