Perhaps you have been thinking about owning your own business and notice an existing answering service for sale. As a new buyer you should be prepared to pay cash for a business. If a service is in distress and the owner just wants out, you may be able to pick it up for a percentage of the receivables per month with nothing down.
And then again if a service has sophisticated equipment, a good staff with large billings and ample profits, you may have to pay all cash. When purchasing an existing answering service company there are a few important questions that you should ask. One of them is whether the present management will stay?
You are going to require assistance with learning the day-to-day operations of the business, scheduling of operators, use and maintenance of the equipment, etc. If the service that you are purchasing does not have a manager, you might request that the seller stay on for a period of time to train you or the manager you hire. It is a good idea not to make any drastic changes when you initially take over the business.
The personnel will already be anxious about possible changes and you want to avoid losing them right off the bat. Of course you will want to keep your eyes open for areas of improvement, but take time in implementing any new policies. A great idea that will provide insight to you and help the employees feel more empowered would be to have a meeting where they are invited to share their thoughts and ideas; alternately you could implement a “suggestion box” to avoid confrontations.
There are a few actions you can take to make your business more profitable right from the start. You might decide to incorporate a 28-day billing cycle if you have enough clients will adequate call volume. This will add another month’s revenues for the year. You will also want to look for ways to cut down on your labor, since that is likely to be your greatest expense.
A well-run answering service may generate a profit of 30%. Labor Typically accounts for 40%, phone bills and taxes are around 10%, and administrative costs run around 20%. A voice mail system along with faxing and email for message delivery might reduce your labor costs by 10% to 15%. The three most convenient ways of message dispatch are voice mail, faxing, delivering them to their alphanumeric display pager or delivering the messages via email.
Another way to increase your revenues is by gaining new customers through advertising. Your best and least expensive advertising is word of mouth, another would be by having a Website on the Internet and an ad in the local phone book is a necessity. You should also consider some print or radio and television ads if you can afford them. Another inexpensive idea is to use a promotion to generate referrals. Simply add a line to the customers’ invoices offering them a free month or service for referring a customer who subscribes to your service.
While buying an existing answering service business eliminates some of the headaches associated with starting from scratch, it also comes with its own set of headaches. It is best to do your research and be sure the business is profitable and something you truly want to invest your time and money into.