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Q: Is
this a good business for an absentee owner?
Q: There
is no call center in my community, is this a good sign?
Q: Should
my business plan be to offer better service for a lower price?
Q: How
many accounts do I need to break-even?
Q: How
long should it take me to get to break-even?
Q: How
about friends and relatives who will work for free?
Q: Is
there a market for call centers with limited hours of operation?
Question: Is
this a good business for an absentee owner?
Answer: No. For
any outsourcing call center or teleservices agency to be successful, there needs to be a dedicated
leader who is there on a regular basis, ensuring that the
staff is providing exceptional service, the labor is kept
in check, and the billing is accurate, timely, and collected.
It is rare to find anyone without a vested interest in the business
who will consistently handle these tasks for the long-term.
Lacking this leadership, even a well run call center can
crumble in a matter of weeks.
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Question: There
is no call center in my community, is this a good sign?
Answer: There is probably a good reason why there is
no call center in your area. Quite
simply, the labor market may not big enough to support it. This
includes not only a labor pool of sufficient size, but also one with which
has the skills and work ethic that you need and with reasonable
compensation expectations.
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Question: Should
my business plan be to offer better service for a lower price?
Answer: It is never a good idea to compete on price alone.
There will always be someone else who will offer the same service
for less. Remember that the
client who choose your call center based on price, will leave you
just as quickly for price. The
best strategy is to focus on providing high quality service.
This can be done either at a competitive price or a premium price.
(For many people, the more they pay for something, the better they
believe it to be.)
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Question: How
many accounts do I need to break-even?
Answer: This, of course, varies with the size of the
accounts. One large
account may be enough for you to break even. Of course if that one
account leaves, your call center is left with no revenue. Although
you will not want to limit yourselves to certain sized accounts, the ideal
size on an account will be one that provides about 10% of your needed
revenue. In that way, ten accounts will bring you to a break even
point - plus if one leaves, you will still be left with a account good base.
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Question: How
long should it take me to get to break-even?
Answer: This depends on the effectiveness of your
marketing, the tenacity of your sales, and the condition of your
competition. Start-ups always
drastically underestimate how long it will take to break-even, be able to
pay themselves, and then earn a profit.
If you are not in a position to run your call center for
several months or even a year at a loss, then you probably shouldn’t be
considering starting one.
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Question: I
have some friends and relatives who will work for free to help me out,
doesn’t this solve my labor liability?
Answer: This is the quickest way to lose a friend or
permanently alienate a relative; it is also not a good business decision.
If others are working for free, then they should be given a portion
of the ownership (this is often called “sweat equity”).
Any such arrangement needs to be detailed, documented, and
formalized, because misunderstandings and differences in opinion are bound
to occur. The last thing a
fledging business needs is to be sued.
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Question: Is
there a market for call centers with limited hours of operation?
Answer: Scaling back your hours of operation, greatly
lessens your labor liability, but also significantly reduces your
perspective market. In
today's market few clients will accept anything less then 24x7 coverage
(that is, continuous operation); you will find some clients that will
accept scaled back coverage, say 16 to 18 hours a day, but clients needing
only daytime coverage are rare.
There
are two possible strategies that some call centers use to provide 24 hour
coverage without staffing 24 hours. The
first is to revert to 100% automation for third shift (when the fewest
calls are typically received). With
today’s modern systems, containing voice mail and automatic dispatching,
this is a viable option – assuming that your clients accept it.
The other strategy is to outsource your slow times to another call
center. There are many
outsourcing call centers who can handle your calls for you.
Generally, it is good to outsource to someone who uses the same
type of equipment you do.
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