Two Ways to Grow Your TAS
By Peter DeHaan, PhD
There are just two ways to grow your telephone answering service. One is through sales and marketing; the other is via acquisitions. Any other strategy is merely a subset of one of these two methods (usually a variation on marketing).
I enjoyed doing acquisitions. And I was quite good at it – or at least the strong team I had made it look that way. I still relish our dozen-plus transactions: the search, the dialogue, the offer, closing the deal, planning the transition, overcoming problems, and realizing the results. I miss it.
Conversely is my feeling about sales and marketing. I’m not wired that way. Although awkward at it, I have a decent closing ratio in sales. However, selling sucks the life out of me, so I avoid it whenever possible. If my livelihood depended on sales, I’d surely starve. Parallel to sales is marketing. To increase my marketing knowledge, I’ve attended seminars, gone to workshops, and taken graduate and post-graduate classes. I’ve amassed much marketing theory but had trouble successfully transferring it to real-world situations. My marketing efforts required much time and produced little results. Of course, this is no wonder since I dislike marketing almost as much as sales.
Not surprisingly, under my leadership the TAS grew mostly by acquisition and not much by sales and marketing.
From this, I’ve learned two things: if you have a strength, go with it; if you have a weakness, work to improve it.
With all this in mind, check out our monthly webinars to help your TAS grow through marketing.
Wealth Building with Your Answering Service, Part Three: A Workable Exit Strategy
By Arthur Cronos
Perhaps you’ve thought of retiring someday. The dream goes like this: Someday your TAS will be larger and more profitable, and you’ll transfer it to your children or sell it to a trusted employee or another answering service owner. With your truckload of money, you’ll buy a house on the golf course (beach, mountain), sip Bacardi (iced tea, orange juice) while soft music plays and a sweet breeze drifts across your manicured lawn with roses (tulips, daffodils). Something like that, right? Prepare for shock.
The Startling Reality: Although 85 percent of small business owners believe family or employees will take over, statistics reveal it only happens 20 percent of the time. A Massachusetts Mutual study found that 65 percent expect to transfer their business to a family member; 24 percent expect to sell to an employee. From author John Brown’s address to the International Brokers Association, in actuality 15 percent transfer their business to a family member; 5 percent sell to one of their employees. Another 10 percent expect to sell their business to an outsider, and 10 percent expect to sell to a competitor. Add them up and discover that 100 percent of business owners expect to transfer or sell their company. However, only 40 percent of them succeed. We may want our businesses to continue, but most of the time, they will not. Either the hard assets will be sold off, or the business closes with the owner walking away empty-handed.
Annual surveys of 5,000 quick print franchisees consistently report that of the companies who exited during the years of the survey, only 24 percent sold and 76 percent simply closed their doors. That is, three businesses closed for each one that sold.
- Only 2 percent of owners who tried to sell their business on their own were successful.
- Only 5 percent of businesses attempting to sell via real estate brokers succeeded.
- Around 14 percent to 25 percent of sales through business brokers succeeded.
- Of larger businesses sold using investment bankers, 90 percent succeeded.
Can These Results Be Improved? Yes. The simplified answer is to grow your business, design it to run with systems so you don’t have work there, and then manage the sale using methods similar to investment brokers. Investment brokers don’t simply grab a listing and advertise the business. That approach yields low success and lower selling prices.
Instead, the high-success approach happens in two steps. First, do a proper analysis of the business – not back-of-napkin scribbling or a simple multiple of gross. An accurate, detailed analysis is required to predict the probable selling price for each of the four types of buyers.
Then, if the numbers are favorable, the actual sale can frequently be accomplished without ever announcing that the business was for sale. Although this method is uncommon outside of Wall Street, it has been used successfully thousands of times with small businesses.
If higher-than-average selling prices and higher probabilities of success sound attractive to you, here is a three-step success formula: Grow your business, set it up to run with systems, and find an experienced intermediary who can provide a detailed analysis.
Then happily retire to that lawn with the roses.
Arthur Cronos ran Network Answering Service in San Francisco, then worked at Startel, and wrote several books.
Telephone Answering Service News
June Webinar: 11 Secrets for Using Direct Mail
The next webinar from Profit Jet Webinars, June 17at 1:00 p.m. (PDT), is “11 Secrets for Using Direct Mail to Grow Your Business and Increase Profits.” It will answer two key questions:
- What makes direct mail so effective?
- How can your business take advantage of this?
Webinars are the third Tuesday of each month. They cover traditional and online marketing methods with a profit-boosting twist. Visit http://profitjetwebinars.com for the schedule and to request webinar notification. There is no cost to attend.
Call 4 Health Adds Maryland Location
Call 4 Health has opened another call center location in Linthicum Heights, Maryland. “We celebrated our seventeenth anniversary by starting a new chapter and opening up another office in Linthicum Heights, Maryland,” said Bryan Weinstein, Call 4 Health VP of business development and contracts. “[It was] on the same day seventeen years later!”
Telescan Spectrum Charts
Telescan released enhancements to Spectrum Charts, a Spectrum system feature that enhances the ability to analyze system and agent performance. Agent labor cost is the single largest expense in the call center, and these new charts (which are accessed via a Web browser) let Spectrum users schedule more precisely and quickly adjust staffing to meet call volume. Spectrum Charts also allows for more accurate agent evaluation and validates agent performance metrics. Beta-tester Todd Kamp said, “Now that I have this feature, I know exactly what the agents are doing or not doing.” Spectrum Charts is just one of the features in Spectrum software release R1-14.
Szeto’s Employee Safety Monitoring via Mobile Apps
Complementary to its traditional check-in and checkout procedures, Szeto Technologies has developed special mobile apps with the capability to automatically identify the whereabouts of an employee in danger and to determine a “man-down” situation with an instant “emergency” alert. The automatic employee safety-monitoring feature, part of the Call Linx system from Szeto Technologies, enables answering services to monitor the safety of employees working in unsupervised or dangerous environments. Employees are required to periodically check in during their work shift to confirm their safety. Missing a check-in is interpreted as “employee-in-trouble” and will trigger an escalation procedure to alert the rescue team.
Startel Updates Multichannel Contact Center Platform
Startel Corporation released the latest CMC version, featuring several security enhancements. “The Startel CMC 12.1 demonstrates our dedication to helping organizations better understand the use of sensitive data and how to mitigate their risk,” said Bill Lane, president and CEO of Startel. “Sensitive information is a major concern for any business that handles patient health information and credit card data. Electronically stored and transmitted data is essentially fluid, and as a result most organizations don’t know with certainty where their sensitive data is at all times.” Contact Startel technical support to upgrade to this latest version.
VoiceNation Launches New Website
VoiceNation, a provider of live answering, professional voicemail, and virtual PBX services to businesses, launched a new generation of their website, VoiceNation.com. The new site unifies VoiceNation’s online presence through brand consistency and has an eye-catching, modern, clean look. Visitors will enjoy a number of improvements, including easier navigation with multi-level menus and a sleeker visual design, which gets users to the content faster. It’s easier to contact a salesperson via VoiceNation’s click, chat, or call options. “Site visitors can learn about our services, place their order online, and have their virtual phone service up and running in minutes,” noted Jay Reeder, the company’s president.
Quotes for the Month
“There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.” – Elie Wiesel
“People always call it luck when you’ve acted more sensibly than they have.” – Anne Tyler
“The guy who fell onto an upholstery machine was fully recovered.” – Unknown
Seeking Acquisitions: Reputable TAS, in business since 1967 and still owned by the founding family, seeks a small TAS acquisition in the eastern US. Ideally, you’re billing under $20k per month; smaller is better. We’ll treat you right, and your employees and customers, too. Let’s talk. Contact Doug at 888-693-7935 or email@example.com.
Mastar.com TAS systems: Get Free 3:1 Emergency Remote TAS on a Memory Stick; email/text/TAP; app optional run on iPads. Contact Rod at 541-606-9272 or firstname.lastname@example.org.