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[T135]Telephone With Answering Machines

by Jose Valdez, Jos

Any business that relies on the telephone is a potential customer. However, your target market will most likely be small businesses and professionals with a busy schedule that relies on incoming telephone calls yet cannot take these calls themselves during certain periods of the day.

Some of the best prospective customers to target are small businesses and/or professionals that operate long or odd hours. Examples of such professionals and/or businesses are repair service businesses such as plumbers and electricians.

The needs of an answering service business will vary from one business to another. Most answering services only receive incoming calls on behalf of the businesses or professionals for whom they are working. There are some answering services that offer services beyond this, such as doing some administrative tasks and/or making outbound calls. A business may want or need to have a telephone answering service handle the telephone calls that it receives during a certain period of the day or 24 hours a day. You should choose in advance, the hours that your business will operate and the services that you will provide. This will help you better determine the needs of your business.

Setting up Your Business
If you will be operating a telephone answering service business by yourself, it may best to solicit the business of businesses and/or professionals that need such a service during only certain time of the day. For example, you can choose to have your hours of operation be from 8AM to 6PM. This will allow you to more easily operate your home business by yourself.

You should also choose in advance the number of clients and the services that your business will be providing for them. If all that you will be doing is receiving inbound calls, this will make it easier to handle the responsibilities of more than one business at a time. If your business will be providing the number of clients that you will take on and the services that you will offer will determine how you will set up your home based business.

Phone Lines
The way most home based business telephone answering services are set up, is for there to be a separate phone line for each for each client. Each telephone is then marked with the company name to help you identify which client phone line is ringing.

Having separate phone lines installed should run you $100 to $200 each. There will also be an additional monthly charge of roughly $35 to $40. You can buy the telephones at a local store. If you intend to expand your home based business into a small business, you will want to lease a switchboard and possibly move to a small office. This allows you to take on a higher volume of calls and therefore more clients. For the purpose of this article however, only the aspect of starting and operating a home based business telephone answering will be discussed.

Switchboards
An alternative to having multiple phone lines installed, is to lease a switchboard from your phone company. You will want to carefully consider the location of the switchboard. Once a switchboard is set up, it can be costly to move due to the penalty fees that phone companies will charge to relocate the service. If you plan to have someone else to help you receive phones calls, this may be a better option for you than having multiple phone lines.

Telephone switchboards can handle more than 100 incoming calls. You only need to activate the actual number of lines that you will be using. The number of phone lines allows you more control and flexibility over your home based business. The number of lines lets you have another operator take incoming as well. Most, if not all phone companies that lease switchboards offer classes on how to use them.

Obtaining Clients for your Telephone Answering Service Business
Any business or professional that uses the phone for business purposes might have a need for an answering service and is a potential client. These businesses and/or professionals can include salespeople, repair services such as electricians and plumbers, on call businesses such as towing services, home based businesses, small businesses such as a doctors office, businesses and organizations that want and/or need surveys taken. You can find these businesses in your local yellow pages, your local newspaper and the classifieds to name a few places.

Once you obtain your first client, obtaining more becomes a lot easier. Positive word of mouth may be the form of advertising once you become established. You can ask your current client for referrals to others who may have a need for an answering service. You can offer incentives such as paying a referral fee for prospects that become clients.

Pricing your Service
When you are determining the price you will charge for your the services of your home based business, you will need to factor in your business expenses. Determine what your total business expenses for twelve months would be. Divide this number by twelve. The revenue that your home business earns you will have to exceed this number in order to make a profit.

The rates that you will charge should be no less than $20 a month. For example, this price may include a standard number of phone calls that you business will receive. The standard number may be 20, 30, 50 incoming phone calls. You may charge your client .25, .50 or .75 for every phone call received after that. Find out what is being charged by similar businesses in your area by calling and asking rates.

Putting together a Contract
You can have an attorney work with you to put together a contract or use a standard contract form. Using a standard contract form works just fine in most cases. However, I recommend working with an attorney to put together different forms depending on the services that you will be providing for various companies.

You will want to have your contract to have a minimum time requirement such as 6 months, with an option to renew at the end of the expiration of the contract.

Have enough Supplies to Conduct Business
Have enough supplies to do business. Supplies such as pencils, pens, paper, index cards, etc. Buy these items in bulk when possible to save money. You will also need a ledger notebook to record revenue and expenses and at least one calendar to write down dates and to schedule your time.

An increasing number of savvy small business owners are recognizing that outsourcing their telephone answering services in the form of an off-site receptionist is an excellent way to control costs and enhance customer service without the headaches of hiring an employee. However, before taking this step it is important to assess an accurate value for such a service so you can budget realistically.

Unlike an old-fashioned telephone answering service, a modern-day off-site receptionist (sometimes called a virtual receptionist or remote receptionist), provides a wide range of services including live telephone answering, real-time call connections, appointment scheduling, order placement, seminar registrations and more. In fact, the core philosophy of these companies differ from an answering service in that they consider themselves YOUR employee for that phone call, and not the third-party service associated with after-hours calls to the doctor's office.

So, what is the true value of an off-site receptionist and how does it compare with hiring a receptionist to work at your location? Here are some estimated costs associated with hiring that employee including some not so obvious ones you will want to consider. According to Salary.com, the median cost of hiring a receptionist is as follows:

Benefit; Median Amount; % of Total
Base Salary; $33,787; 67.4%
Bonuses; $394; 0.8%
Social Security; $2,615; 5.2%
401k / 403b; $1,231; 2.5%
Disability; $342; 0.7%
Healthcare; $5,722; 11.4%
Pension; $1,572; 3.1%
Time Off; $4,470; 8.9%
Total; $50,132; 100%
Source: HR Reported data as of March 2009

At nearly $50,000 annually, your Receptionist budget would need to be in excess of $4,000/month, but even if you estimate on the low end it adds up to more than you think. Suppose you don't offer a generous benefits package and can find someone to answer your phones for $10/hour. Add to that mandatory employment tax of about 11% and you're pushing $2000/month. That does not even account for the estimated 450 square feet they will occupy (at a conservative $1/foot), lunch breaks, sick days, and assorted management headaches.

Depending on your call volume and the services you require, an off-site receptionist can typically perform many of the same functions for anywhere from 5%-50% of that cost, which in this case could be $100-$1,000. If that sounds like a wide range, keep in mind that pricing is usually designed to scale based upon the amount of receptionist time you require. If you are simply looking to have your calls screened, announced and connected in real-time your costs will be lower than if you are using appointment scheduling or a more time intensive process. Either way, when you factor the many associated costs and the time involved with hiring, training and retaining good employees, most will agree that an off-site receptionist is a tremendous value.

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Both Jose Valdez & Victor Mataraso are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Jose Valdez has sinced written about articles on various topics from . . Jose Valdez's top article generates over 1900 views. to your Favourites.

Victor Mataraso has sinced written about articles on various topics from Web Development. Victor Mataraso, M.B.A is the founder and president of Reliable Receptionist, an off-site telephone reception and appointment scheduling firm based in the San Francisco East Bay Area. Reliable Receptionist specializes in working with small business owner. Victor Mataraso's top article generates over 720 views. to your Favourites.