Why You Need a Strong Top Line
December 18, 2018
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.
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).
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.
Use an Answering Service to Block Out Time
People at all levels of business, in all sizes of businesses, struggle to find time to focus on key projects. Nowhere is this more critical than for e...
Selling a Distressed Answering Service
Prior posts have addressed the right time to sell your answering service, the wrong time to sell, and about leaving a legacy when it’s time to move ...
Why Insisting on a Stateside Call Center is an Ill-conceived Goal
When people reach a call center, they make assumptions about the agent and the agent’s location based on what they hear. While these assumptions may...
Use an Answering Service to Better Serve Callers
When someone calls your office, what happens? Don’t answer this question with what you hope happens or what you ideally want to occur but with the t...
7 Steps to Deal with an Underperforming Answering Service Sales Rep
If an answering service has sales reps they either produce consistent sales month after month or they underperform. Too often sales reps underperform....
A Professional Billing Service Provides Added Value to Answering Services
With the right software, anyone can generate telephone answering service invoices—and get them mostly correct. Yet it takes a company with unique in...
Use an Answering Service to Back-up Your Staff
In today’s fast paced business environment we all have more to do and less time to do it. Too often something needs to give. We skip some aspects of...
Use an Answering Service to Handle Your Office Hours Calls
Most everyone knows that answering services are great at answering the phone in the evenings and weekends, but they can also answer your phone during ...