How To Start A Telephone Answering Service

rganize yourself properly. decide how much money it's going totake for you to feel comfortably wealthy, and the reach it withyour own Telephone Answering Service.
Our research has turned up hundreds of husband and wifeentrepreneurs who, beginning with just a couple of thousanddollars in borrowed funds, and a lot of ambition are grossing$250,000 or more after a couple of years in business.
The exciting part is that the door is wide open for you to do thesame! The demand for telephone answering services is growing!!!The advent of electronic answering devices in not even beginningto slow this demand! A great many people are completely "turnedoff" by the frustration of expecting to talk with a "liveperson," and having to listen to a recording that advises thecaller to leave a message at the sound of the tone. Exasperationof this kind can sometimes cost a business person thousands ofdollars in lost profit. Realizing this, today's successfulbusiness person wants the personal touch of a friendly,professional "secretary" answering their phones for them.
The professional answering service operator can pass along theproper messages to the different callers, take messages, getclarifications and even set up meetings with special customers.In many instances, businessmen come to thick of the operators attheir telephone answering service as vital to their success, andoften reward them them with special favors or bonuses when aparticularly lucrative deal is closed because of courteous andefficient service by the people at the answering service.
To get started properly, you'll need an initial investment ofabout $10,000 for equipment and facilities, plus working capital.In the beginning, with a 2 person operation, you can have youroperator selling by phone while you make in-person sales calls.You might also want to add a couple of "hungry" commission salespeople to help line up a good list of accounts as fast aspossible. These efforts will take planning and coordinationbecause you won't want two different sales people calling on thesame prospect.
You can begin operating out of a spare bedroom or yourgarage--you'll need a leased switchboard from the telephonecompany--with plans to move your operation into more formalquarters at a later date. However, it's quite expensive andtime-consuming to have a switchboard moved once it's beeninstalled. Our suggestion would be to locate a "beginning" smalloffice, and plan on being there at least 5 years from the start.
Many operations begin in a small 200 to 300 square feet economyoffice location, and as their growth warrants, open a secondlocation with space for eventual expansion to include 3 or moreswitchboards. Our research has found that you'll need an averageof 85 regular customers per switchboard in order to realize aminimum profit after expenses.
Just about anyone with a business card will be a good prospectfor your services. People working out of their homes are a verygood prospects, especially those holding down regular jobs whilemoonlighting with a part-time businesses of their own. Everysalesmen is a prospect, people who work on a 24 hour "on-call"basis, repair service business owners such as plumers,electricians, locksmiths, and auto mechanics...There are otherkinds of services that will be interested too, such as ambulancecompanies, towing services, volunteer fire departments, surveyorganizations, and customer complaint departments of virtuallyevery business in your area..By all means don't forget thedoctors, dentists and other professionals!
A lot of beginners start by providing service only for theseintermittent users. These people "put out the word" that if theycan't be reached at their regular number after 4 or 5 rings, thecaller should dial the number of the answering service. Theanswering service, which in this case is just a housewifeanswering her home phone, takes the caller's message and eitherrelays it to the customer or holds it until he checks in withher. Very simple, very easy and very profitable!
Usually after such a "shoestring" operation has 15 to 20customers. it's necessary to install a phone with multipleincoming lines. The cost and questions of the phone company canbe allayed by purchasing your own telephone and explaining thatyour have several teenagers in the family. However, once you have35 to 50 customers it's time to expand into a commercialoperation complete with switchboard and hired operators.
The average rates to charge for your service should be about $35per month for a specified number of calls--usually 70 to 75--witha surcharge of 25 cents for each call beyond that number. Othercalls such as "wake-up" and reminder calls for appointments, areusually billed on a "per call" basis at about 50 cents per call.
Most telephone answering services provide a variety of otherservices to keep their operators busy during the times when thereare no incoming calls. These services range form typing, envelopeaddressing, computer input services, envelope stuffing,subscription soliciting and order fulfillment for mail orderoperators to reviewing books for publishing agents. In recentyears, some have even included private post office, mail drop andforwarding services. The important thing is to keep youroperators busy doing some kind of work that makes money for you.
When you decide to lease an office get going, complete withswitchboard--it's important that you try to get as close to thetelephone company's switching or exchange station as possible.This is due to the mileage charges it'll cost you for landlines.Remember too that each exchange station handles prefixes limitedto customers within a certain radius of that station. What all ofthis means is that if most of the businesses in your area have a234 and 345 prefix, you'll want to locate your answering servicesoffices as close to the station serving these prefixes aspossible. Basic installation and set-up of one switchboard willcost you close to $4,000...
Generally, a metro population of 35,000 people will support atelephone answering service hoping for $50,000 per year; 75,000to 80,000 people will be needed for $100,000 and $150,000 peoplefor $200,000 per year or more. For more help and furtherinformation, it would be wise to contact the Associated TelephoneAnswering Exchange, Inc. This organization the industry'swatchdog group can up-date you on current practices and trends.
Meanwhile, in setting up your own facilities keep your costs inline with a realistic view of your anticipated first year income.It should't be too difficult to find low-cost rental space in anolder building not far from the telephone company's exchangebuilding- the telephone company is usually just as reluctant topay high rent as you are..Locating in an older, less than"beautiful" building should not detract from your businessbecause few of your customers will ever actually see youroffices. Most will sign up for your services either thru yourin-person sales calls on them, or your telephone solicitingefforts, and send their payments in by mail.
You'll need 125 square feet of space for each a small receptionarea which can also double as a rest area for your operators andgeneral office area for bookkeeping, billing and otheradministrative functions. Be sure there are convenient restroomfacilities as well.
Before installation of your first switchboard, the phone companywill require an inspection of your office, mainly to determine ifthe floor is strong enough to support the weight of theswitchboard. Save yourself a lot of frustration by explainingthis to the real estate agents or the building managers beforethey start showing you what's available. The best thing is to askfor certified copies of the original building blueprints orprevious inspection reports, and have these in hand when youcontact the phone company.
Once you're ready to go, consider the attitudes and feelings ofthe people who'll be working long hours on the switchboards foryou--invest in some cherry paint for the walls, non-glarelighting, carpeting for the floors and a few wall prints,pictures or other decorations. Look around for good used officefurniture and buy or lease only what is absolutely essential. Apocket calculator and a used manual typewriter will work fineuntil you get the business running on a dependably profitable.
When you order your first switchboard, listen to the telephonecompany's instruction, read the operating manual and attend theirtraining sessions. The more you know about the equipment, theeasier it's going to be to operate it, and the more you'llunderstand your profit potentials.
The traditional telephone company switchboard is known as the model 557 or TAS-100. This board handles 100 incoming secretariallines and 15 office trunk lines, with this board, you have thecapabilities of receiving incoming calls and making outgoingcalls at the same time. You also have a business answering linewhich can be used as your number for customers wanting to useyour number as their business number and/or for special eventssuch as a special number for survey replies or telephone orderssuch as advertised on television for one-time-only salespromotions.
Even though you have the capabilities of 100 incoming lines, youshouldn't activate more than 5 or 10 more than your actualcustomer list. As you add to your customer list, it's then asimple matter for the phone company to activate or "tie-in"according to your needs. Your rental lease payments to the phonecompany for equipment includes maintenance, so whenever you havea problem or something isn't working properly to suit your needs,call and ask the phone company to send a repairmen.
Some of the extras you can get with your board includes a"secrecy" switch. This feature prevents an operator fromlistening in if a customer has already picked up his phone andanswered the call, but it does not prevent the customer frompicking up his phone after the operator has answered. Thecustomer could by request the operator to hang up and conductwhatever conversation he wants with the caller.
Another feature is the "position-splitting" key. This involvesplugging in a second headset and simply turning the key to enabletwo operators to work the same board during an especially busyperiod.
When your customers want to call to check with you for anymessages, you can have them call their own number if they'recalling from a different number, or pre-designated trunk line.Most answering service owners equipment works both ways untilthey decide upon the system that works best for them. Whichevermethod is finally chosen should be decided upon with theefficiency of the operators in mind.
In addition to your switchboard, you should install a time clockand message racks. These are ideally located above or on top ofyour switchboard. The operator the takes the call, jots down themessage, punches the time clock and quickly slips it into thecustomer's message box. When the customer calls in for hismessages the operator retrieves the messages from his messagebox, reads them to him, again punches the time clock with eachmessage slip, and drops them into a "dead message" box.
You should keep these message slips for totalling at billingtime, so it's a good idea to have each operator file them in yourcustomer folders as they finish their shifts on the board.retention of these message slips for at least 30 days is notrequired, but it is a good policy to practice. You may find acustomer will want to check on a message received or double-checkhis billing against your records.
Basically your message rack can be either pigeon holecompartments in a wooden box designed and built to fit yourspace, or a lazy Susan clips similar to what restaurants use forfast food orders. At any rate, you shouldn't have any problem infinding what you need on the open market.
It isn't necessary that you have specially designed or printedmessage slips, but you should have a plentiful supply availableand within easy access to your operators. Simple 4 x 5 inch padsshould be all you'll need, and if you'll check with your localquick print shops, you'll find most of them willing to make athousand or so pads of 50 to 100 pages each, from scrap paper,for almost next to nothing. Another essential to plan on--buy inwholesale lots and keep handy for your operators--is pens. It maybe exasperating until the business is on a sound profitabilitybasis, but in a busy month, one operator can easily go thru 100or more pens. Don't fight the how's and why's just charge it upas a business expense and order more pens.
You'll need some form of maintaining basic customer informationsuch as address, name and number to contact during an emergencyand any special answering instructions. For this, simply go with3 x 5 or 4 x 5 index cards and place them in each customer'smessage slot for easy operator reference. Many services havethese cards laminated in plastic to prevent them from gettingdirty or deteriorating with constant use.
Efficiency is the name of the road leading to profits in anysmall business, so when you begin one switchboard, make sure youhave that position-splitting key, and that you balance the board.In other words, don't put all of your similar customers--such asplumers, electricians and doctors on one side of the board.Instead, divide them across your board--half on them on one sideand half on the other side. This will enable you to put twooperators on that board in times of emergency. Your customerlines must be distributed according to usage across the board formaximum efficiency of your operation.
Each time a customer "signs" for your services you should havehim sign a simple contract that specifies the name and address ofthe firm to be billed for the service, and typed name as well assignature of the person authorizing the service. There shouldalso be space on this contract for alternate phone numbers, namesand addresses as well as phone numbers of persons to contact incase of emergency, and any special answering instructions theclient may want you to use. Don't forget to include a clauserequiring 30-day notification of service cancellation by eitherparty to the contract. It's also a good idea to state that a fullmonth's payment must be made for any partial month's usage, inorder to cover any disconnect charges. You'll probably want tostipulate that the last month's base charges are to be paid atthe time of service approval, in order to enhance your workingcapital situation.
Check with the phone company--find out if they or you are to billthe customer for hook-up charges, and the line into yourswitchboard. By all means, get everything written out and fullyexplained in the contract. You'll be money ahead by paying a goodcontract that not to put all that you want into a legal contractthat not only protects you, but also is binding upon yourcustomers.
One other item of paperwork you should have is an Errors &Omissions Insurance Policy. This protects you and your operatorsagainst any liability form mistakes or missed messages--very goodto have, and available at very low cost thru the AssociatedTelephone Answering Exchange, inc. by special arrangements withLloyd's of London. Your other insurance needs are those basic toany business. Always shop around for the best rates.
In the beginning, you and your spouse or partner can operate atelephone answering service. However, we strongly suggest thatyou add to your "operator staff" just as quickly as your customerlist warrants. The longer you try to operate with just 2 people,the longer it's going to take you to achieve real profitability.
Remember, you want a 24 hour, seven-days-a-week, full serviceoperation. This will require at least three full time operatorsfor your board, plus at least one relief operator--and don'tforget about commission sales people.
Ideally, you should try to hire people with telephone switchboardexperience, but in order to get these people, you may have tooffer short-shift, moonlighting tom regular telephone companyoperators. It will take some time to train inexperienced people,so bear this in mind when you begin looking for people to hire.It's always a good policy to hire your new, inexperienced peoplefor the evening shifts. Break them in by having them "sit in"with an experienced operator during the daytime hours, and havesomeone close at hand during their first week on the eveningshift before turning them loose to handle the board bythemselves.
The most important qualifications to look for in an operator arevoice and attitude. The voice must be pleasant and sound alert,interested and ready to help the caller. Warn your operatorsnever allow their "personal feelings" to show thru when they'reanswering the phone. They represent your business and yourcustomers. As such, they must project a professional manner atall times.
Teach your operators to answer the phones with a "happy smile" intheir voices. Train them to take their time with the callers, andget the message right by reading the message back to the caller,and also be sure they ask the caller for the correct spelling ofhis or her name. Unless specifically instructed otherwise by acustomer, insist that your operators never allow an incoming callto ring more than twice before answering it. Hardly anythingfrustrates anyone calling a business number more than a telephonethat seemingly rings forever before someone answers it.
You can start you inexperienced people at $4 an hour, and yourexperienced operators at $6 an hour. Try to explain to them thatthe success of your business depends on them, and as yourbusiness prospers, so will give them their monetary rewards. Getthem involved and interested in helping you succeed.
It's going to take aggressive selling on your part to reachsuccess with a venture of this kind. You must spend at least 50percent of your time making sales calls--if you can't or don'twish to do any personal selling, then you'll have to hire atleast two full time people to take your place. In addition toyour own sales efforts or people who will fill your shoes in thisarea, you should hire at least one other full time sales person.You should plan to have someone making telephone solicitationsfor at least 3 hours out of each working day.
Selling your services--building an ever larger customer list--isthe name of the game for real success. You've got the start-upinformation, and form here on, the rest depends on your ownambition...
Associated Telephone Answering Exchanges, Inc. Bankers Square 100 Pitt Street Alexandria, VA 22314 (703) 683-3770
TYPICAL EQUIPMENT COSTS:
TWO OPERATOR CHAIRS...........................$90DESK & CHAIR..................................100TWO SIDE CHAIRS................................50BOOKCASE.......................................50FILING/SUPPLY CABINET..........................50CALCULATOR.....................................50USED TYPEWRITER...............................150BASE FOR SWITCHBOARD...........................60MESSAGE RACK...................................75TIME CLOCK....................................250OFFICE FURNISHINGS/DECORATIONS................1505-THOUSNAD MESSAGE PADS........................2524-DOZEN PENS..................................12SWITCHBOARD LEASE (ONE BOARD)...............4,000CABLE INSTALLATION (ONE BOARD)..............1,500RENT ON OFFICE................................600UTILITY DEPOSITS...............................50BUSINESS LICENSES..............................50BUSINESS INSURANCE............................350LEGAL FEE.....................................100SUPPLIES..................................... 200
TOTAL $7,957