Small Business Idea No. 4: Answering Service Business ~ The Home Buff

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With the current economy and job market, many qualified individuals are presently devoid of a job, trying to decide upon their next action. At-home enterprises are on the rise, offering advantages of being a business proprietor and working from a home office. One such option is a home-based answering service business. Countless studies have been performed specific to this option revealing that of all in-home businesses, a telephone answering service is among the most profitable and easiest to start. Business to business services have become extensively well known, and provide a nice income. Here are a few suggestions and guidelines for setting up and operating your own home answering service.

What is an Answering Service?

When operating a home based answering service, business owners obtain contracts from other professionals and agree to obtain all of their incoming calls. Often times, professional people are too busy to answer their own telephone calls and sort through junk calls. This is where an answering service comes into action. As people call a specific business, all calls are automatically forwarded to the answering service. The answering service will act as the receptionist, answering basic questions and taking phone messages.

Start-up Cost

The start-up cost for a home based answering service will vary depending on how many clients you choose to service. If seeking to make the operation small and cheap, consider having all calls forwarded to your home telephone number. However, if the goal is to build a profitable business, invest in additional telephone lines, switchboard, computer, billing software, and fax machine.

The greater part of the start-up cost will be spent in advertising. With an answering service business build up within the home, people can earn as much as $150,000 in annual revenue. This type of business can be conducted by one individual and with incredible success. On the other end of the spectrum, smaller businesses requiring remote customer service appreciate the many benefits associated with someone who offers live phone answering services.

Which Clients to Target?

While there are many incredible probabilities for the individual who wants to start an in-home answering service business, the groupof business owners that profitthe most would be anyone on-call 24 hours a day. This is why, people starting a business such as this should promotethe services toward doctor's offices, tow services, heating and cooling repair people, apartment complexes, plumbers, and electricians.

All types of business professionals are probable clients. This would include physicians or lawyers who operate small practices. Moreover, independent companiesand sales persons will greatly benefitfrom using an answering service. Other professionals who run businesses out of their homes may relyon their spouse or home answering machine to take messages when they are away. By using a professional answering service, their clients are able to speak to a live, knowledgeable person.

People as a whole are tired of making phone calls after hours only to be met with a voice recording advising that multiple buttons have to be pressed and directions followed before a message can be documented. Once the message has been left, the caller has no guarantee when a return call will come. With answering services, callers are greeted with a friendly and professional live person that can answer questions, provide information, make suggestions, or take messages to be passed on immediately. Just before meeting with possible clients, design several monthly packages.

There are several ways to charge clients. Some answering services charge clients on a per call basis, whereas others producea set price for a specific number of calls. Calls that go overthe monthly limit are assessed additional charges. Typical rates include $80 - $100 per every 100 calls.

Gaining Answering Service Experience

Before managing an answering service business, it helps to have preceding telephone answering service experience. When meeting with potential clients, inform them of any previous associatedwork experience. This might include working as a receptionist, inbound call operator, telemarketer, or other answering help.

Tips for Marketing Answering Service Business

Record a business ad in local telephone directory. Place a classified ad in the local newspaper. Take benefitof direct mailings. Post ads in online business forums. Pass out business cards and information packages to local businesses

What are the Demanding situations?

The problemfor most small business owners is that they fork out the majority of their time handling sales, accounting, and dealing with on-site issues. For these people, the added cost to have someone in the office full-time, whether during the day or after hours is beyond the budget. An answering service business established as an in-home office is more cost effective while still being the lifeblood of the company by ensuring customers are taken care of in a professional manner.

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How to Publicize an Answering Service Business?

An preliminaryannouncement of your service in the paper is a necessity, and then a small contract ad (one you pay for by the month) under "Business Services" should do the trick. For this amount of business, the paper will probably run a little freebie feature about your new business. If they don't have a reporter ready, furnish them with some newsy copy that just happens to make your company look as if it is the answer to everyone's dreams, possibly even with a picture (make sure it advertise your business -- not your ego).

If you really want to do it right, have some single page advertisements (flyers) printed and send one to every small business in your area, especially one-person service businesses. Then, whenever business lags, or when you are ready for more, beef up your advertising for a while. Join the Chamber of Commerce, where many potentialcustomersare, and be visible in community affairs. Appear as a volunteer booth attendant with your company T-shirt or hat. Another low-costadvertising gimmick is to donate a prize of, say a month's free answering service for the community charity auction or drawing.

The telephone company will helpyou arrangeto be listed in the yellow pages, and help if you wish to place an ad there (they are effective and EXPENSIVE) -- don't let them sell you more than you need and can give. For example, if you are going to show upfirst in the listing (Answering Service) anyway, a large ad would not be as critical to receive notice. If there are alternativelocal phone listings, check on them, too. They are probably cheaperand less effective than the yellow pages but usually every bit as good an investment.

In your spare time work out a sales pitch and call prospective businesses to inform them your services. Note that unlessyou are especially adeptat this, it is very bestto placean outline in front of you at these times -- to make sure you cover all the important points and that you have the answers to their questions handy. Your pleasant voice and professionalism will demonstrate how your service can serve their needs and help improve their business image. Have a brochure or rate sheet and an preliminaryagreement ready to mail to them if they seem interested (strike while "the iron is hot"). Potential problems in this business center around getting or giving the wrong information, or forgetting to notify someone at the tight time.

How do I setup my Answering Service Facility?

In setting up your own facilities, keep your cost in line with a realistic view of your first year's expectedincome. It shouldn't be too hardto find low-cost rental space in an older building not far from the telephone company's exchange building - the telephone company is usually just as stubbornto pay high rent as you are... Locating in an older, less than "beautiful" building should not detract from your business because few of your customerswill ever actually see your offices.

Most will sign up for your services either through your in-person sales calls on them, or your telephone requestingefforts, and send their payment in by mail. You'll need 125 square feet of space for each switchboard you plan to subsequentlyinstall. Also preparefor a small reception area which can also double as a rest area for your operators and general office area for bookkeeping, billing and other administrative functions.

Be sure there are convenient rest room facilities as well. Before installation of your first switchboard, the phone company will requirean inspection of your office, mainly to verifyif the floor is strongenough to support the weight of the switchboard. Save yourself a lot of disappointmentby explaining this to the real estate agents or building managers before they start showing you what's available. The best thing is to ask for certified copies of the original building blueprints or previous inspection reports, and have these in hand when you contact the phone company.