HOW TO START A TELEPHONE ANSWERING SERVICE

Organize yourself properly. decide how much money it’s going to
take for you to feel comfortably wealthy, and the reach it with
your own Telephone Answering Service.

Our research has turned up hundreds of husband and wife
entrepreneurs who, beginning with just a couple of thousand
dollars 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 the
same! The demand for telephone answering services is growing!!!
The advent of electronic answering devices in not even beginning
to slow this demand! A great many people are completely “turned
off” by the frustration of expecting to talk with a “live
person,” and having to listen to a recording that advises the
caller to leave a message at the sound of the tone. Exasperation
of this kind can sometimes cost a business person thousands of
dollars in lost profit. Realizing this, today’s successful
business person wants the personal touch of a friendly,
professional “secretary” answering their phones for them.

The professional answering service operator can pass along the
proper messages to the different callers, take messages, get
clarifications and even set up meetings with special customers.
In many instances, businessmen come to thick of the operators at
their telephone answering service as vital to their success, and
often reward them them with special favors or bonuses when a
particularly lucrative deal is closed because of courteous and
efficient service by the people at the 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, you can have your
operator selling by phone while you 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 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 a very
good prospects, especially those holding down regular jobs while
moonlighting with a part-time businesses of their own. Every
salesmen 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 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 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 appointments, 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 form typing, envelope
addressing, computer input services, envelope stuffing,
subscription soliciting and order fulfillment for mail order
operators to reviewing books for publishing agents. In recent
years, some have even included 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…

Generally, a metro population of 35,000 people will support a
telephone answering service hoping for $50,000 per year; 75,000
to 80,000 people will be needed for $100,000 and $150,000 people
for $200,000 per year or more. For more help and further
information, it would be wise to contact the Associated Telephone
Answering Exchange, Inc. This organization the industry’s
watchdog group can up-date you on current practices and trends.

Meanwhile, in setting up your own facilities keep your costs in
line with a realistic view of your anticipated first year income.
It should’t be too difficult to 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 reluctant to
pay high rent as you are..Locating in an older, less than
“beautiful” building should not detract from your business
because few of your customers will ever actually see your
offices. Most will sign up for your services either thru your
in-person sales calls on them, or your telephone soliciting
efforts, and send their payments in by mail.

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 repairmen.

Some of the extras you can get with your board includes a
“secrecy” switch. This feature prevents an operator from
listening in if a customer has already picked up his phone and
answered the call, but it does not prevent the customer from
picking up his phone after the operator has answered. The
customer could by request the operator to hang up and conduct
whatever conversation he wants with the caller.

Another feature is the “position-splitting” key. This involves
plugging in a second headset and simply turning the key to enable
two operators to work the same board during an especially busy
period.

When your customers want to call to check with you for any
messages, you can have them call their own number if they’re
calling from a different number, or pre-designated trunk line.
Most answering service owners equipment works both ways until
they decide upon the system that works best for them. Whichever
method is finally chosen should be decided upon with the
efficiency of the operators in mind.

In addition to your switchboard, you should install a time clock
and message racks. These are ideally located above or on top of
your switchboard. The operator the takes the call, jots down the
message, punches the time clock and quickly slips it into the
customer’s message box. When the customer calls in for his
messages the operator retrieves the messages from his message
box, reads them to him, again punches the time clock with each
message slip, and drops them into a “dead message” box.

You should keep these message slips for totalling at billing
time, so it’s a good idea to have each operator file them in your
customer folders as they finish their shifts on the board.
retention of these message slips for at least 30 days is not
required, but it is a good policy to practice. You may find a
customer will want to check on a message received or double-check
his billing against your records.

Basically your message rack can be either pigeon hole
compartments in a wooden box designed and built to fit your
space, or a lazy Susan clips similar to what restaurants use for
fast food orders. At any rate, you shouldn’t have any problem in
finding what you need on the open market.

It 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.

You’ll need some form of maintaining basic customer information
such as address, name and number to contact during an emergency
and any special answering instructions. For this, simply go with
3 x 5 or 4 x 5 index cards and place them in each customer’s
message slot for easy operator reference. Many services have
these cards laminated in plastic to prevent them from getting
dirty or deteriorating with constant use.

Efficiency is the name of the road leading to profits in any
small business, so when you begin one switchboard, make sure you
have that position-splitting key, and that you balance the board.
In other words, don’t put all of your similar customers–such as
plumers, electricians and doctors on one side of the board.
Instead, divide them across your board–half on them on one side
and half on the other side. This will enable you to put two
operators on that board in times of emergency. Your customer
lines must be distributed according to usage across the board for
maximum efficiency of your operation.

Each time a customer “signs” for your services you should have
him sign a simple contract that specifies the name and address of
the firm to be billed for the service, and typed name as well as
signature of the person authorizing the service. There should
also be space on this contract for alternate phone numbers, names
and addresses as well as phone numbers of persons to contact in
case of emergency, and any special answering instructions the
client may want you to use. Don’t forget to include a clause
requiring 30-day notification of service cancellation by either
party to the contract. It’s also a good idea to state that a full
month’s payment must be made for any partial month’s usage, in
order to cover any disconnect charges. You’ll probably want to
stipulate that the last month’s base charges are to be paid at
the time of service approval, in order to enhance your working
capital situation.

Check with the phone company–find out if they or you are to bill
the customer for hook-up charges, and the line into your
switchboard. By all means, get everything written out and fully
explained in the contract. You’ll be money ahead by paying a good
contract that not to put all that you want into a legal contract
that not only protects you, but also is binding upon your
customers.

One other item of paperwork you should have is an Errors &
Omissions Insurance Policy. This protects you and your operators
against any liability form mistakes or missed messages–very good
to have, and available at very low cost thru the Associated
Telephone Answering Exchange, inc. by special arrangements with
Lloyd’s of London. Your other insurance needs are those basic to
any business. Always shop around for the best rates.

In the beginning, you and your spouse or partner can operate a
telephone answering service. However, we strongly suggest that
you add to your “operator staff” just as quickly as your customer
list 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 service
operation. This will require at least three full time operators
for your board, plus at least one relief operator–and don’t
forget about commission sales people.

Ideally, you should try to hire people with telephone switchboard
experience, but in order to get these people, you may have to
offer short-shift, moonlighting tom regular telephone company
operators. 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 people
for the evening shifts. Break them in by having them “sit in”
with an experienced operator during the daytime hours, and have
someone close at hand during their first week on the evening
shift before turning them loose to handle the board by
themselves.

The most important qualifications to look for in an operator are
voice and attitude. The voice must be pleasant and sound alert,
interested and ready to help the caller. Warn your operators
never allow their “personal feelings” to show thru when they’re
answering the phone. They represent your business and your
customers. As such, they must project a professional manner at
all times.

Teach your operators to answer the phones with a “happy smile” in
their voices. Train them to take their time with the callers, and
get the message right by reading the message back to the caller,
and also be sure they ask the caller for the correct spelling of
his or her name. Unless specifically instructed otherwise by a
customer, insist that your operators never allow an incoming call
to ring more than twice before answering it. Hardly anything
frustrates anyone calling a business number more than a telephone
that seemingly rings forever before someone answers it.

You can start you inexperienced people at $4 an hour, and your
experienced operators at $6 an hour. Try to explain to them that
the success of your business depends on them, and as your
business prospers, so will give them their monetary rewards. Get
them involved and interested in helping you succeed.

It’s going to take aggressive selling on your part to reach
success with a venture of this kind. You must spend at least 50
percent of your time making sales calls–if you can’t or don’t
wish to do any personal selling, then you’ll have to hire at
least two full time people to take your place. In addition to
your own sales efforts or people who will fill your shoes in this
area, you should hire at least one other full time sales person.
You should plan to have someone making telephone solicitations
for at least 3 hours out of each working day.

Selling your services–building an ever larger customer list–is
the name of the game for real success. You’ve got the start-up
information, and form here on, the rest depends on your own
ambition…

Associated Telephone Answering Exchanges, Inc.
Bankers Square
100 Pitt Street
Alexandria, VA 22314
(703) 683-3770

TYPICAL EQUIPMENT COSTS:

TWO OPERATOR CHAIRS………………………$90
DESK & CHAIR…………………………….100
TWO SIDE CHAIRS…………………………..50
BOOKCASE…………………………………50
FILING/SUPPLY CABINET……………………..50
CALCULATOR……………………………….50
USED TYPEWRITER………………………….150
BASE FOR SWITCHBOARD………………………60
MESSAGE RACK……………………………..75
TIME CLOCK………………………………250
OFFICE FURNISHINGS/DECORATIONS…………….150
5-THOUSNAD MESSAGE PADS……………………25
24-DOZEN PENS…………………………….12
SWITCHBOARD LEASE (ONE BOARD)……………4,000
CABLE INSTALLATION (ONE BOARD)…………..1,500
RENT ON OFFICE…………………………..600
UTILITY DEPOSITS………………………….50
BUSINESS LICENSES…………………………50
BUSINESS INSURANCE……………………….350
LEGAL FEE……………………………….100
SUPPLIES………………………………. 200

TOTAL $7,957

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