Returning to the Telephone Answering Service Industry

By Peter L DeHaan, PhD

Peter L DeHaan, publisher of TAS TraderI recently talked with a lady who had sold her answering service and was now getting back into the business. My first thought was to congratulate her, but I know from experience that celebration might not be in order. Indeed I have talked with too many who were forced back into the industry when some aspect of their sale fell through, such as not receiving their monthly payments. Once out, some people don’t want to go back.

Yet others miss the industry and return as soon as their non-compete clauses are up. Fortunately, in this case, the woman wanted to get back into the answering service business. Once I confirmed this, I congratulated her and wished her the best. I’m excited for her.

Though I didn’t ask for details, I see three options for her to consider:

Start From Scratch: Starting an answering service with no clients is challenging. Yes, I know many people have done exactly that over the years, but that doesn’t make it any easier. The key to this is getting as many clients as quickly as possible. Otherwise you have staff sitting around with little to do and expecting a paycheck, but you don’t have enough revenue coming in to pay them.

Buy an Existing TAS: An alternative is to buy an existing operation. Buying a going concern solves startup and initial cash flow concerns, but it is a sellers’ market so finding a service to buy for a good price is a challenge.

Return to Your Former Business: A third option is to rejoin the service you just sold. It could be you buy an equity stake or that you return as an employee. Both options have their drawbacks. Your new role will be different from your former one, the operation will have changed, and staff will have turned over. As the saying goes, you can’t go back home.

So I’ve given three options to return to the answering service industry, and all three have serious downsides. Maybe the key is to make sure you really want out before you sell – because it’s hard to go back.

Peter DeHaan is publisher and editor of TAS Trader and Connections Magazine.