Why You Need a Strong Top Line
March 22, 2016
As we discussed in a prior post, your top line is your gross sales and is effectively an indicator of your ability to market and sell your services. Here are three reasons why you need a strong top line for your telephone answering service.
Economy of Scale: Typically, telephone answering services with a weak top line focus their attention on streamlining operations to at least ensure they are profitable, to keep their bottom line positive. Unfortunately, as their top line decreases – due to either neglect or failure – it becomes harder and harder to keep the bottom line positive. That’s one reason why businesses need a strong top line. Without robust sales, they lack the economy of scale needed to operate a profitable business.
Market Valuation: Another reason why a strong top line is important is for your business’s market valuation. Even if your telephone answering service is privately held, you need a healthy valuation. Eventually, you will want to sell your answering service. Even if this is something as simple as transferring it to a relative, it is still a sale and most business owners want to sell for as much as they can. Often, selling their business is effectively their retirement plan. Doesn’t everyone want to retire in style? The same applies if you sell to a key employee or an ESOP (employees’ stock ownership plan).
EBITDA: Even more important is selling to a third party. While some businesses are purchased based on a multiple of the bottom line (net profit), many telephone answering services are purchased on a multiple of the top line (gross sales), but the more savvy purchasers offer a multiple of EBITDA. EBITDA is the key acquisition metric. A prerequisite to a strong EBITDA is a strong top line. You can’t have the former without the latter.
Grow your top line today for a better tomorrow.
Janet Livingston is the president of Call Center Sales Pro, a premier sales and marketing service provider for the call center and telephone answering service industry. Contact Janet at firstname.lastname@example.org or 800-901-7706.
Peter DeHaan is a freelance writer from Southwest Michigan.
Without strong sales, your #AnsweringService lacks the economy of scale needed to be #profitable.
#AnsweringServices: A prerequisite to a strong #EBITDA is a strong top line (gross sales).
Sooner or later, you will want to sell your #AnsweringService; start preparing today.
Selling your #AnsweringService is effectively your retirement plan; sell high to retire well.
Should You Offer a Free Trial When Selling Answering Service?
Some answering services offer a free trial to new clients. Others do not. Both camps are adamant about their reasons for making this decision. While t...
Sales Support Pays Off Huge for Quality-Minded Answering Service
Supplementing internal sales and marketing with third party sales support is a winning strategy Cunningham Communications, founded in 1989, worked har...
Why You Might Benefit from Having a Multilocation Corporate Call Center
By strict definition a call center is a centralized place where calls are answered. However, technology now allows this fixed characterization to expa...
HIPAA Applies to Your Outsourcing Call Center, Too
As mentioned in “Five Things to Check Before Outsourcing Your Healthcare Calls,” it’s critical to hire a call center that complies with HIPA...
Fast-Track Lead Processing to Maximize Sales Outcomes
It takes time to process sales leads, which decreases close rates In looking at lead response times, we already know that the faster the lead response...
Call Center Sales Pro Taps Pete Gilhooly as Director of Hospital Call Centers
Pete Gilhooly, Telecom veteran with fifteen years’ experience in healthcare vertical joins Call Center Sales Pro FOR IMMEDIATE RELEASE: December 20,...
The Three Critical Metrics for Lead Response
Keep Total Lead Qualification Time Low to Maximize Results We’ve discussed how low lead response times affect the likelihood of being able to eventu...
A Slow Lead Response Produces Low Lead Qualification Rates
Maximize lead qualification rates by responding to inquiries fast A common complaint among salespeople is not having enough quality leads. They might ...