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 email@example.com or 800-901-7706.
Peter Lyle 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 Use Direct Mail as a Marketing Tool For Your Answering Service?
If you’ve networked with other telephone answering service owners or attended many TAS meetings,, the subject of direct mail as a marketing tool is ...
Email Opt-Out Traps to Avoid
A great way to market your call center or answering service is with email marketing: you collect email addresses and send regular messages that contai...
Six Steps to Outsource Your Healthcare Call Center
Regardless of the reasons for outsourcing your healthcare call center work, pursuing a reasoned path is the surest way to a successful outcome. Here a...
7 Tips to Maximize the Sale Price of Your Answering Service
At the end of the year, some telephone answering service owners think about selling their business. They want to complete the sale by year-end. Often ...
How to Maximize the Valuation of Your Answering Service
Smart business owners are always looking for ways to increase the value of their business. You should, too. Whether or not you plan to sell your telep...
Outsource Your Healthcare Call Center Work to Reduce Costs
While a common reason to outsource healthcare call center services is to increase quality, an even more likely motivation is to save money. And saving...
Outsource Your Healthcare Call Center Work to Counter Labor Issues
Many areas in healthcare suffer from a shortage of qualified personnel. One common area is nurses, and many healthcare call centers hire nurses to wor...
What to Do When You Struggle with Sales and Marketing
Every telephone answering service and outsourcing call center owner wants to grow his or her business. There are only two ways to do so: growth throug...