Establishing an Answering Service for Telephones

 Establishing an Answering Service for Telephones

Our investigation has uncovered a multitude of husband-and-wife business owners who, after just a few years in operation, have amassed $250,000 or more in revenue, all from a modest initial investment of a few thousand dollars borrowed and an abundance of determination.

The best part is that there's no reason why you can't do the same! An increasing number of people are looking for phone answering services. There has been absolutely zero reduction in this demand since the introduction of computerized response systems! Callers who anticipate speaking with a "live person" are often "turned off" by the inconvenient necessity of listening to a recording that instructs them to leave a message upon hearing the tone. A company owner could lose thousands of dollars due to this kind of frustration. In light of this, modern successful businesspeople want to have a kind and competent "secretary" take their calls.

A good answering service operator can do a lot more than just take messages; they can also relay the correct messages to the various callers, clarify questions, and even arrange meetings with particular clients. Many businessmen look up to the operators at their phone answering service and consider them an integral part of their success. When a particularly profitable deal is closed, the operators are often rewarded with bonuses or special treatment.

An initial investment of approximately $10,000 is required for premises and equipment, in addition to working capital, in order to get things rolling in the right way. With a two-person operation, you can start out by making in-person sales calls and having your operator handle phone sales. A couple of "hungry" commission salespeople could be an excellent addition to help you quickly build a solid list of accounts. It will be necessary to coordinate and plan ahead for these endeavors so that no two salespeople contact the same prospect.

With a rented switchboard from the phone company, you may start your business out of a spare bedroom or garage. You can then expand into more permanent accommodations when you're ready. Having a switchboard relocated, however, is a laborious and costly process. A "beginning" small office is a good place to start, and you should aim to stay there for at least five years.

A lot of businesses start out in modest economy offices that are just 200 to 300 square feet in size, but as they expand, they build up a second site that can accommodate three or even four switchboards. If you want to make a minimum profit after expenses, our study shows that you need 85 regular clients per switchboard.

You can find potential clients among anyone who has a business card. Those who are able to work from the comfort of their own homes, whether it's full-time or part-time, stand a decent chance of succeeding. Everyone who works as a plumber, electrician, locksmith, or auto mechanic, as well as those who are available around the clock as "on-call" salespeople, has the potential to be a customer. Other service providers, like ambulance and towing companies, as well as volunteer fire departments, survey groups, and the customer complaint departments of almost every local business, are also worth considering.

When they first start out, many newcomers focus solely on serving these infrequent customers. When these individuals "put out the word" that their regular number is unanswered after four or five rings, the caller is instructed to dial the number of the answering service. In this scenario, an unpaid housewife acts as an answering service, taking messages from callers and either relaying them to the customer or holding them until he verifies with her. A breeze to implement and yields excellent results!

In most cases, 15 to 20 clients will be left after such a "shoestring" surgery. A phone with numerous incoming lines must be installed. Buying a personal phone and saying that you have multiple teenagers in the household will alleviate the concerns and inquiries of the phone provider on the cost and service. The moment to upgrade to a commercial business with a switchboard and operators is when you have 35 to 50 customers, though.

Monthly fees for your service should be around $35, with an additional 25 cents added for each call above a certain limit (often 70 to 75). "Per call" billing occurs for other types of calls, like "wake-up" and appointment reminder calls, and typically costs around 50 cents.

When there aren't any calls coming in, the operators at most telephone answering services have a lot of other things to do. All the way from book reviews for publishing agents to typing, mailing, computer input, stuffing, and subscription soliciting for mail order operators, these services cover it all. Some have gone so far as to incorporate private post offices, mail drops, and forwarding services in the past few years. The most critical thing is to ensure that your operators are always engaged in tasks that generate revenue for your business.

The best location for your leased office space, complete with switchboard, is one that is in close proximity to the phone company's switching or exchange station. The reason for this is the expense associated with landline mileage charges. Another thing to keep in mind is that there is a radius that each exchange station can handle prefixes for clients. Because of this, it's a good idea to put your answering service's offices near the station that serves the 234 and 345 prefixes if they are the most common in your area. You should expect to spend close to $4,000 for the basic installation and setup of one switchboard.

An annual budget of $50,000 may be supported by a telephone answering service in a metro area with a population of 35,000; $100,000 can be achieved with a population of 75,000 to 80,000; and a budget of $150,000 can support a budget of $200,000 or more. Get in touch with Associated Telephone Answering Exchange, Inc. if you need additional assistance or information. If you want to know what's happening right now in the industry, this watchdog group can fill you in.

At the same time, when you're building up your own facilities, make sure that your expenses are reasonable considering your expected income for the first year. Location in an older, less-than-beautiful building shouldn't be a dealbreaker for your business, especially if it's close to the telephone company's exchange building. The telephone company is typically just as hesitant to pay high rent as you are, so finding affordable space shouldn't be too difficult. Most people will pay for your services through the mail after signing up via one of your two main sales channels: in-person or over the phone.

One modest greeting area—which can also serve as a break room for your operators—and one large office area—required for accounting, billing, and other administrative tasks—need 125 square feet apiece. Additionally, make sure that there are easily accessible restrooms.

In order to confirm that your office floor can adequately sustain the weight of the switchboard, the phone company will conduct an inspection before installing your first switchboard. Real estate brokers and building managers can save you a lot of hassle if you tell this to them before they begin showing you the available properties. Before contacting the phone company, it is advisable to request certified copies of the original construction blueprints or inspection reports. Have these documents on hand when you make your call.

Prepare for your long days on the switchboards by painting the walls cherry, installing non-glare lighting, carpeting the floors, and adorning the walls with prints, photographs, or other decorations. Think about the individuals who will be working there and how they feel about the job. Try to find reasonably priced, gently used office furniture; then, only purchase or rent the bare minimum. For the time being, all you need is a pocket calculator and a used manual typewriter to get your firm up and running.

Pay attention to the instructions, study the handbook, and attend the training courses provided by the telephone provider when you order your first switchboard. Operating the equipment will be easier and your earning potential will be better understood if you know as much as possible about it.

The model 557 or TAS-100 is the name of the classic telephone company switchboard. This board allows you to make and receive calls simultaneously; it accommodates 100 incoming secretarial lines and 15 office trunk lines. In addition, you have a business answering line that can be used for many purposes, such a special number for survey replies or telephone orders (like those for limited-time sales campaigns broadcast on TV), or for customers who would like to use your number as their business number.

A hundred incoming lines are at your disposal, but you shouldn't activate more than five or ten more than your real customer list. When you expand your customer base, the phone company can easily activate or "tie-in" with your requirements. Maintenance is a part of your phone company equipment rental lease, so if something breaks or doesn't perform as expected, just give them a call and they'll send a repairman.

An optional "secrecy" switch is one of the board's supplementary features. This function stops operators from eavesdropping on customers who have answered the phone, but it doesn't stop customers from doing the same thing once the operator has answered. If the consumer wants to have a private talk with the caller, he can simply ask the operator to end the connection.

The "position-splitting" key is another element. When things get really hectic, you may have two operators operate the same board by just plugging in another headset and turning a key.

If a client wants to call to see if there are any messages, you can have them use their own number or a pre-designated trunk line. Until they find the optimal approach, the majority of answering service owners' equipment is dual-purpose. Regardless of the final decision, the operators' efficiency should be considered.

A time clock and message racks should be installed in addition to your switchboard. In a perfect world, you'd find them atop your switchboard. Next, the operator records the call's details, presses the time stamp, and discreetly deposits the message into the client's mailbox. Upon receiving a customer's message retrieval request, the operator will read the messages aloud, punch the time clock again with each message slip, and then place them in a "dead message" box.

It is recommended that each operator places these message slips in their respective client folders at completion of their shifts on the board. These will be needed for totaling purposes during billing time. It is not mandatory to save these message slips for at least 30 days, although it is recommended to do so. A client may wish to verify the receipt of a communication or compare his invoice to your records.

You have two basic options for your message rack: a wooden box with pigeonholes cut to size or a lazy Susan clip, like the ones used for fast food orders. Whatever the case may be, the open market should have no trouble providing you with what you require.

Although it is not strictly required, it is wise to ensure that your operators have easy access to a sufficient number of message slips, whether they are particularly created or printed. All you really need are some basic 4x5 inch pads. If you visit your neighborhood quick print shop, you'll probably be surprised to see that they'll gladly manufacture a thousand or so pads, each with 50 to 100 pages, out of scrap paper for practically nothing. Plan on purchasing pens in bulk and keeping them on hand for your operators; they are a necessary. One operator might easily go through 100 or more pens in a busy month, which can be frustrating until the business is profitable. Put it on your company expense report and buy additional pens; there's no need to argue the hows and whys.

Customers' names, addresses, phone numbers, and emergency contact information, as well as any specific instructions for answering the phone, should be recorded in some way. Use 3x5 or 4x5 index cards for this, and put one in the customer's message space for the operator to refer to later. To protect them from wear and tear and dirt, many services laminate these cards in plastic.

Making sure you have the position-splitting key and that the board is balanced as you begin one switchboard is essential for efficiency, which is the name of the road leading to earnings in any small business. Put another way, you shouldn't lump all of your comparable clients together, like plumbers, electricians, and doctors. Instead, put half of them on one side of the board and half on the other. In case of an emergency, you can then place two operators on that board. For your company to run as efficiently as possible, your client lines should be divided according to usage across the board.

At the moment a client "signs" to use your services, you should have them sign a short contract that includes the following information: the name and address of the company that will be charged for the service, and the person's or company's typed name and signature. This contract should also include the client's preferred method of contact in the event of an emergency, their alternate phone number(s), name(s), and address(es). Be sure to incorporate a provision that stipulates that either party must provide thirty days' notice in order to cancel the service. It's wise to mention that in the event of a partial month's use, the entire payment for that month must be given to cover the costs of disconnection. To improve your working capital condition, it's a good idea to specify that the last month's basic charges are to be paid when the service is approved.

Who is responsible for billing the customer for the line into your switchboard and the hook-up charges? Contact the phone company to find out. Make sure the contract specifies and explains everything. You can save money in the long run by investing in a solid contract that safeguards your interests rather than letting them float aimlessly. 

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