The Difference of One Month’s Billing

By Steve Michaels

Sales of telephone answering services – just like any other market – are run by supply and demand.  While there are valuation averages that should be followed, there are also times when you need to look beyond the typical averages and consider how an account acquisition could help your TAS and enhance its bottom line.

Even if you’ve just spent over $150,000 on a switch to answer your calls, sent your managers to special training classes, and launched a new Web site, none of it means anything unless you have clients.  Clients are your lifeblood, and sometimes you have to go beyond any norms to acquire them.

Let’s take, for example, a TAS selling 120 accounts that are billing $20,000 per month.  Assume the seller is asking for eleven times monthly billing, and you are sticking to your guns and offering ten times.  First, you will not get the deal, and second, we are talking about a price differential of only $167 dollars per account ($20,000 / 120 accounts = $166.67 per account).  This is the difference of one – one month’s billing, that is.  It is an amount that you would gladly pay a salesperson to land that account. 

The question comes down to what you are willing to do to enhance your bottom line and maximize your infrastructure.  You can always spend more money on your Web site, hire another salesperson, or create a new marketing campaign, but none of these are going to guarantee more business.  Buying accounts will – if done right!

It’s ironic that the economy is flailing and yet the multiples for telephone answering services have never been better.  Even though finding the financing to buy a business is harder, telephone answering services are selling for top prices – for the time being.

Steve Michaels and TAS Marketing can be contacted at 800-369-6126 or tas@tasmarketing.com.                     [download issue]