Starting a Telephone Answering Service

To get started properly, you'll need an initial investment of about $10,000 for equipment and facilities, plus working capital. In the beginning, with a 2 person operation, professional servicing firms can have their operator selling by phone while they make in-person sales calls. You might also want to add a couple of "hungry" commission sales people to help line up a good list of accounts as fast as possible. These efforts will take planning and coordination because you won't want two different sales people calling on the same prospect.

You can begin operating out of a spare bedroom or your garage--you'll need a leased switchboard from the telephone company--with plans to move your operation into more formal quarters at a later date. However, it's quite expensive and time-consuming to have a switchboard moved once it's been installed. Our suggestion would be to locate a "beginning" small office and plan on being there at least 5 years from the start.

Many operations in Professional servicing firms begin in a small 200 to 300 square feet economy office location, and as their growth warrants, open a second location with space for eventual expansion to include 3 or more switchboards. Our research has found that you'll need an average of 85 regular customers per switchboard in order to realize a minimum profit after expenses.

Just about anyone with a business card will be a good prospect for your services. People working out of their homes are very good prospects, especially those holding down regular jobs while moonlighting with a part-time business of their own. Every salesman is a prospect, people who work on a 24-hour "on-call" basis, repair services business owners such as plumbers, electricians, locksmiths, and auto mechanics...There are other kinds of services that will be interested too, such as ambulance companies, towing services, volunteer fire departments, survey organizations, and customer complaint departments of virtually every business in your area. By all means, don't forget the doctors, dentists and other professionals!

A lot of beginners start by providing professional service only for these intermittent users. These people "put out the word" that if they can't be reached at their regular number after 4 or 5 rings, the caller should dial the number of the answering service. The answering service, which in this case is just a housewife answering her home phone, takes the caller's message and either relays it to the customer or holds it until he checks in with her. Very simple, very easy and very profitable!

Usually, after such a "shoestring" operation has 15 to 20 customers. it's necessary to install a phone with multiple incoming lines. The cost and questions of the phone company can be allayed by purchasing your own telephone and explaining that your have several teenagers in the family. However, once you have 35 to 50 customers it's time to expand into a commercial operation complete with switchboard and hired operators.

The average rates to charge for your service should be about $35 per month for a specified number of calls--usually 70 to 75--with a surcharge of 25 cents for each call beyond that number. Other calls such as "wake-up" and reminder calls for appointment are usually billed on a "per call" basis at about 50 cents per call.

Most telephone answering services provide a variety of other services to keep their operators busy during the times when there are no incoming calls. These services range from typing, envelope addressing, computer input services, envelope stuffing, subscription soliciting and order fulfilment for mail order operators to reviewing books for publishing agents. In recent years, some have even included a private post office, mail drop and forwarding services. The important thing is to keep your operators busy doing some kind of work that makes money for you.

When you decide to lease an office get going, complete with switchboard--it's important that you try to get as close to the telephone 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 limited to customers within a certain radius of that station. What all of this means is that if most of the businesses in your area have a 234 and 345 prefix, you'll want to locate your answering services offices as close to the station serving these prefixes as possible. Basic installation and set-up of one switchboard will cost you close to $4,000.

You'll need 125 square feet of space for each 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 restroom facilities as well.

Before installation of your first switchboard, the phone company will require an inspection of your office, mainly to determine if the floor is strong enough to support the weight of the switchboard. Save yourself a lot of frustration by explaining this to the real estate agents or the 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.

Once you're ready to go, consider the attitudes and feelings of the people who'll be working long hours on the switchboards for you--invest in some cherry paint for the walls, non-glare lighting, carpeting for the floors and a few wall prints, pictures or other decorations. Look around for good used office furniture and buy or lease only what is absolutely essential. A pocket calculator and a used manual typewriter will work fine until you get the business running on a dependably profitable.

When you order your first switchboard, listen to the telephone company's instruction, read the operating manual and attend their training sessions. The more you know about the equipment, the easier it's going to be to operate it, and the more you'll understand your profit potentials.

The traditional telephone company switchboard is known as the model 557 or TAS-100. This board handles 100 incoming secretarial lines and 15 office trunk lines, with this board, you have the capabilities of receiving incoming calls and making outgoing calls at the same time. You also have a business answering line which can be used as your number for customers wanting to use your number as their business number and/or for special events such as a special number for survey replies or telephone orders such as advertised on television for one-time-only sales promotions.

Even though you have the capabilities of 100 incoming lines, you shouldn't activate more than 5 or 10 more than your actual customer list. As you add to your customer list, it's then a simple matter for the phone company to activate or "tie-in" according to your needs. Your rental lease payments to the phone company for equipment includes maintenance, so whenever you have a problem or something isn't working properly to suit your needs, call and ask the phone company to send a repairman.

t isn't necessary that you have specially designed or printed message slips, but you should have a plentiful supply available and within easy access to your operators. Simple 4 x 5 inch pads should be all you'll need, and if you'll check with your local quick print shops, you'll find most of them willing to make a thousand or so pads of 50 to 100 pages each, from scrap paper, for almost next to nothing. Another essential to plan on--buy in wholesale lots and keep handy for your operators--is pens. It may be exasperating until the business is on a sound profitability basis, but in a busy month, one operator can easily go thru 100 or more pens. Don't fight the how's and why's just charge it up as a business expense and order more pens.