Determining When to Sell Your Answering Service
July 18, 2018
Most People Wait Too Long to Sell Their Answering Service and Others Sell Too Soon
There’s a right time and a wrong time to sell your answering service. Too many people put their answering service on the market in response to an emotional situation. Instead they should look at things from a logical perspective and make an informed decision on when it’s the right time to sell.
Here are some times when it makes sense to sell your answering service.
Wrong Sized: If the size of your answering service’s infrastructure is misaligned with your call traffic, you’re operating under a wrong-sized scenario. This makes it hard to be efficient and even harder to turn a profit. Though there are viable strategies to turn a wrong-sized answering service into a right-sized operation, another option is to sell.
Shrinking Client Base: Most people want to grow their answering service, and they become concerned if that isn’t happening. But even worse than stagnant growth is having a shrinking client base. That means clients cancel faster than you can add new ones. Though there may be many reasons for this, all of which are fixable, the reality is that if your client base continues to shrink, it will initially shrink to nothing. You need to sell your answering service before you have nothing left to sell.
Increased Costs: Another scenario is escalating expenses. The biggest expense item for answering services is labor. Overscheduling and overpaying are to common reasons for costs to balloon out of control. However, other things can push expenses higher too. Too much overhead, a wrong location, and a lack of spending controls can all push your costs up and drive your profitability down. Though you can work to rein in costs and return to a profitable level, another option is to sell your operation and let someone else deal with the cost issues.
Decreased Profits or Unprofitable: Trying to operate with a wrong-sized infrastructure, having a shrinking client base, or encountering increased expenses all conspire to decrease profits. In a worst-case scenario, these issues can turn a once-profitable answering service into an unprofitable business endeavor. Again, this is a problem you can correct, but the fastest way to address this is to sell your answering service and walk away.
Labor Issues: Some answering services are in areas that have high wage expectations, others struggle with a rebellious staff that opposes every management decision, and still others can’t find qualified workers. Regardless of the labor issue, this problem is key to your answering service’s future and to its success. Not only is labor your highest expense, the service your staff provides—be it good or bad—distinguishes you from your competition. The quality of their work will either make you or break you. One quick way to correct labor problems is to sell your accounts to somebody else.
Conclusion: All these issues are correctable, but fixing them takes time and energy. If you don’t have the time or lack the energy, then the best solution is to sell—before your business’s valuation dips too low.
Just make sure it’s the right time to sell your answering service. Don’t jump too soon when you have an easily-correctable situation. And don’t wait too long until you have nothing left to sell.
Peter DeHaan is a freelance writer from Southwest Michigan. Call Center Sales Pro, a premier sales and marketing service provider for the call center and telephone answering service industry, helps clients grow their revenue and optimize their business. Contact Janet at firstname.lastname@example.org or 800-901-7706.
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