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How To Earn Hundreds OF Extra Dollars Weekly
By Running A Home-Based Answering Service

Your Best Opportunity To Turn Your
Phone Skills Into Cash!

INTRODUCTION

Do you enjoy talking on the phone?

Does your voice have a friendly, cheerful tone?

Are you well-organized?

Do you need a few hundred extra dollars each week?

If you answered “yes” to each of the four questions listed
above, then you are a great candidate to pursue one of the
most lucrative and easy home-based businesses that exist
today! It’s very inexpensive to set up and, depending on
your individual ambition, you’ll earn thousands of dollars
each year–without having to leave the comfort of your home.

Ironically, it’s the advancement in technology that’s creating
this exciting opportunity. Fancy, complex phone answering
systems have left customers talking to computer-generated
voices, leaving messages on “voice mail” and pressing numerous
telephone numbers to work their way through to conversing with
an actual human being.

While these systems “free” people up from the phones in a
business, it frequently frustrates their clients and potential
customers to the financial detriment of the firm.

Unable to easily to reach a human voice, many individuals
simply go elsewhere for the services they need.

Fortunately for everyone, employers are recognizing this
problem and solving it–by contracting people like yourself to
answer the phones when they can’t. That personal touch you can
offer can mean the difference in obtaining or keeping a client.
As a professional answering service business, you can take
messages, deliver specific messages to callers, clarify the
intent of calls and even arrange meetings with customers.

This booklet will illustrate how you can set up this type of
home-based answering service business. It’s your chance to
talk — and earn money doing it!

GETTING STARTED

Business needs for an answering service can vary
considerably. A company may need a phone to be answered all
day, part of the day, after hours only or 24 hours a day.
You can enter this profession at any level you choose. The
amount of equipment you’ll need to get going will also
fluctuate depending on how much time you want to devote to
your home-based answering business.

Most often, businesses only need their phones covered during
an “extended” work day, say 8:00 A.M. – 8:00 P.M., with an
answering machine taking over the other, less likely 12 hour
call period. Twelve hours can be a long day if you’re going
it alone, so you may wish to solicit businesses that generally
are looking for the phones to be answered from 9 to 5 or 6.
This makes it more likely for you to do the job yourself and
work it easily into your family’s schedule, too.

Once you identify your work hours, you can begin the task of
soliciting businesses to contract with you. Before embarking
on this important effort, you should establish a goal of how
many companies you want to represent. You can certainly take
on more than one company if all you’re doing is answering the
phone.

How many businesses you take on will dictate how you set up
your service. The easiest and most inexpensive way to begin
is to have a separate phone line and phone for each business
you contract. You would then mark each individual phone with
the company name as an identifier for you when the phones
begin to ring.

This is the best route if you’re going to work with ten or
fewer businesses. If you intend to take on more than ten firms,
then it would be more cost and space effective to lease a
switchboard from your local telephone company. A switchboard
can accommodate a substantial amount of business activity for
you.

Installing separate phone lines should run less than $100
each (possibly higher in some parts of the country). You will
also pay basic monthly charges for the phone. This should
average about $20 – 25 per month (again, possibly higher in
some parts of the country). If you are buying actual telephones,
these can be acquired inexpensively at local stores.

Before buying all these phones and contracting with businesses,
check with the phone company to see how many extra lines you
can obtain. There may be a limit in your residential
neighborhood. How many clients you can take on will depend on
your number of lines you can install, you might consider opening
up an office in a nearby commercial area, where the number of
lines you need can be accommodated. However, this is beyond
the scope of your home-based answering service.

The amount and type of equipment you obtain will be dictated by
your ambition and your budget. It can be as simple as individual
phone lines or as complex as computer screens that flash messages
or record instructions for you to convey.

The more sophisticated the equipment, the more money you’ll have
to spend. Of course, the more business you can handle the greater
the financial reward. This is something you’ll have to decide
for yourself. If this is a low-volume, extra money kind of work,
spend as little as possible and take on only one or two clients.
If this is to be your new career, then consider the larger
investment to handle a high volume of calls.

The key to your success does not rely solely on the equipment.
Your answering business is providing important customer service
for a company and as such it’s your voice and congenial manner
that is of equal or greater value. If you’re working with small
to medium sized businesses, you probably won’t need the latest
and greatest phone system to handle the work.

The option to numerous phones was to lease a switchboard from your
local phone company. Find a convenient space in your home to set
up your work area, and clear a space for the switchboard. Once
set up, it’s costly to move, so make your home “office” choice
wisely when a switchboard is involved.

The switchboard you’ll get from your local phone company is
model no. 557 or TAS-100. This type of switchboard can handle
up to 100 incoming lines, but you only need to activate the
actual number of lines you need to use. This large number of
lines gives you great flexibility in the service you can provide.

Switchboards offer a variety of extras, including room for
another operator if your services demand the work of two people,
and a secrecy switch to secure the phone lines for your clients.

The switchboard will come with a complete operating manual.
Read it carefully! It can help you understand the variety of
services you can provide. If training sessions are available
through your local phone company, attend them! Knowledge is
powerful — and profitable!

TYPES OF HOME-BASED ANSWERING SERVICES

Now that you’ve identified the system and volume of business you
are trying to acquire, let’s review the type of home-based
answering services you can provide.

This booklet has already noted the importance of your phone
“personality” as the main key to your success. The better you
are at handling people on the phone, the greater the number of
services you can offer, from straight message-taking to complete
customer service. Your grammar must be sound, your diction easy
to understand. To improve in these areas, there are many self-
improvement courses available through local community colleges
and other learning outlets for a nominal charge.

Businesses have a variety of phone needs, depending on their size
and complexity. The phone can save them time and money in
communicating with their customers. They may be looking for any
of the following services which you could provide:

· Incoming Message Services, both during and after normal
business hours;
· Complete Answering Service where customers believe they are
calling the actual business office;
· 800 Number Service;
· Order Taking Service where customers call in to order a
specific product or service they’ve seen advertised;
· Call Forwarding Service where the business
forwards calls to you only when their personnel leave the
office;
· Message Delivery Service where you not only take messages,
but you also call people for your business client;
· Voice Mailboxes where you have lines that record messages,
but also call people for your business client;
· Beeper Service where you take the call and then page the
client via a beeper ;
· Computerized Telemarketing where you hook up a computer to
a standard phone and program it to dial telephone numbers to
help a business prospect for clients or advertise;
· Appointment Setting Service where you call a list of
individuals furnished by a business to set up appointments for
the firm’s sales people;
· Phone Sales where you are calling on behalf of a business to
sell a specific service; and
· Surveys where you call designated people to obtain answers to
an opinion survey.

All of these services are possible via the phone. You don’t have
to offer every single service, simply the ones you can comfortably
perform. The phone skills required differ widely depending on
the service.

Once you select the services you wish to provide, you can begin
looking for clients.

HOW TO OBTAIN CLIENTS

The closer you are to a large metropolitan area, the
greater your potential for income in a home-based answering
service. However, small towns are also in need of your services
as many of the businesses may be sole proprietorships who spend
the bulk of their day outside their office and away from the
phone.

This is a good place to start. Virtually anyone that works away
from their business might have need for an answering service.
Salespeople, repair services, people on call like towing services,
survey organizations and firms who might use the computer-based
automatic dialing system are all potential clients you can contact
to offer your phone services.

The phone book, the local newspaper, the small “Pennysaver” type
publications and community bulletin boards are all places where
you can find the type of business most likely to be interest in
your service. This will give you a solid local list to begin
your prospecting.

In addition, here is a short list of those companies that might
be interested in the phone sales service which you set up on
a computer basis to automatically dial a pre-set number of calls:

Amway Mary Kay
Magazines Auto Dealerships
Portrait Studios Vitamin Companies
Avon Real Estate agencies
Insurance Agencies Coin Dealers
Remodelers CPA firms
Roofers Decorators
Stockbrokers House painters
Tupperware

The businesses that can utilize your ability to advertise for
them using the phone are substantial, and include:

Retail stores Credit agencies
Restaurants Wedding services
Modeling schools Furniture stores
Employment agencies Collection agencies
Financial Services Hotels
Dance schools Carpet cleaners
Car washes Video stores
Travel agencies Pet services

You’ll probably start out with a few message service
contracts, requiring only a few lines, but you could easily
work your way up to dozens of lines and services.

Remember to ask you early clients for referrals to others
whom they may feel could use your service. Your existing
clients are the best source for leads!

YOUR “HOME” OFFICE

Setting up the business in your own home is a matter of knowing
how much business you intend to do. If your goal is to generate
some extra cash in addition to other work you do, you’ll only
want a few clients and phones. Select a room in your house for
your to answer these phones.

The room should be comfortable, adequate in size and able to
support several phones. You may want to use an area in which you
can arrange a long table to be set up with the phones arranged
on top, the wires underneath.

If you take on a switchboard, you may still be able to work out
of your home. The switchboard will require space and a floor
strong enough to support its weight. Your phone company
representative can indicate the relative strength necessary
to accommodate a switchboard in your home.

If you anticipate having a vast number of clients, or your
residential area won’t accommodate the phone lines you need,
you may wish to seek out a commercial space to rent.
Generally, 350 -400 feet should be sufficient space to get
started.

Current national office vacancy rates are running around
15-17%, so there should be good deals on rent out there for
you. The appearance of the building isn’t all that important
as you’re a phone business — your clients will call, not visit!

In addition to the room for the phones or switchboard, you’ll
want to have some work space. Many telephone answering services
also contract for other jobs to keep busy while the phones are
quiet. Services like envelope stuffing, typing, order filling,
addressing envelopes or bookkeeping can all be done while
operating the phone lines. Maximize your time wisely!

Brightly colored walls, proper lighting, carpeting and cheery
prints for the walls can make the working atmosphere one in
which you (and any employees you might hire) will prosper.
Employees will be a must if you are trying to operate your
phone service for lengthy hours. A 24 hour service will
require at least three to four employees.

Other employees will be helpful in giving you a break from
the phones. In addition, you can use “down time” to your
advantage by making calls to obtain more clients. It’s hard
to call on people if you’re at the phone for twelve hours
each day.

TEN EASY STEPS TO ORGANIZE YOUR BUSINESS

1. Obtain the proper equipment for your business. Make sure
the phones or headsets are easy to use. If you use a table and
chair, make sure they are comfortable and easy to sit in.
Obtain a message “rack” with slots to place your clients’
messages so that when they call in you’ll have them handy to
read. Install a time clock so that you can punch in the time
when the message was taken. Both the message rack and time
clock should be within arms length so you do not have to leave
your chair–and the phones! Discount office supply stores can
provide these items inexpensively.

2. Make it easy to record basic message information. You can
buy message slips from your discount office supply store or you
can use scraps of paper that you cut up for use. Whatever the
vehicle, make sure there is room to write down the customer’s
name, phone number and any message. You should also leave space
for the date/time and to whom the message will be addressed.
Have plenty of pens handy! Don’t run out of ink.

3. Have an organized system for your messages. Once written,
the message should be filed in the message rack to read later
to your client. Once you’ve passed the message along, mark
“SENT” on the slip and then file it in a folder marked with
your client’s name. Save the messages for at least a month
(or longer, if the client requests).

4. Use index cards to record basic customer information about
each of your business clients. This information should be kept
handy and given to customers if necessary. Knowing all about
your clients’ business will make you more effective on the phone.

5. Price your services competitively, keeping in mind your own
monthly expenses. Add your expenses up on an annual basis like
the basic monthly phone charges, equipment, office supplies and
divide the total by 12 to determine a monthly overhead cost.
Obviously, the revenue you generate must exceed this number
each month to make a profit. The average rates you can charge
for your services can range from $30 to $50 per month, the
specific price related to the basic monthly phone charges you
must pay in your area. Determine a base number of calls that
you can accept under your standard rate (50, 75, 100). For any
calls you receive over that in a given month, bill you client
on a per call basis (.25, .50, .75). You can contact competitors
and find out what they charge to determine what your price range
should be if your aren’t sure of the rates you want to set.

6. Contract for your services formally. Put together a standard
contract for both you and your client to sign. The “Business”
section of your local library will probably have some standard
contract forms that you can amend for your use. You could choose
to engage an attorney for this task, too. The contract should
have a minimum length to it, like 6 or 12 months, with options
to renew it at expiration. You need to plan on a certain amount
of business and income and you can’t do that without a minimum
service contract length.

7. Select a business name that is descriptive but not limiting.
If you are not incorporating, you can use your name in the company
title if it’s simple and easily pronounce-able, such as “Marge
Dean’s Telephone Services” or, better yet, “Marge Dean’s
Telemarketing Services” which encompasses more tasks in a
potential client’s mind. If your name is difficult to say,
consider using the town name as in “Dallas Tele-marketing
Services”. Since that may already be taken, you can also go
generic as in “Diversified Telemarketing Services” or
“Associated Answering Services”. Keep it simple and open.

8. Select the type of business you want to be. Incorporation
carries the most prestige but it isn’t always the most practical
for a very small business. You can always start as a sole
proprietor and work your way up as the business expands. A
sole proprietor is the simplest form of business structure
although you are personally liable for all business debts.
A partnership will be necessary if you have someone else
sharing the profits and expenses of the business with you.
An accountant and/or an attorney can illustrate the advantages
and disadvantages of each entity and help you determine what
course to take.

9. Obtain enough supplies to launch your business. Be well-
equipped with the basics: pencils, pens, note paper, index cards,
paper clips, rubber bands, staplers and this type of office needs
should be purchased in quantity. You achieve a savings by higher
volume purchasing and also avoid possible work stoppage because
you are out of supplies constantly. Don’t forget a ledger
notebook to record revenue and ex-penses. Also include a calendar
to note important dates. Order business stationary and envelopes
along with business cards. Remember, you are trying to create a
positive, professional image. If you wish, hire a graphic artist
to design a logo for your business. This should appear on the
card, letterhead and envelope. Order blank paper of the same
color as your letterhead to write letters or memos longer than
one page. Shop around for printers. There are often “specials”
that printers run to attract business, usually on items like
business cards and stationary. Your initial order will be more
costly because of set-up charges to put your information on plates
to print. Once done, however, it is inexpensive to order reprints
when your supplies dwindle.

10. If your business outgrows your house, shop around for a
good location. Don’t consider moving out of your “home” office
unless you’ve redone your expense calculation, divided it by 12
and seen that your new monthly expenses can be eclipsed by your
revenues. If you decide to find an office, consider sharing a
space with other professionals in a building, where business needs
like a photocopier, fax, receptionist, etc. can be shared among
the occupants. You’d still have your own private office, but it
will save dollars to combine other resources. Shop for office
furniture to get the best price possible. Check the newspaper
for notices about bankruptcy auctions and Sheriff’s sales where
you can often obtain nearly new, higher quality equipment for
little money. You will need a desk, table, filing cabinet,
chairs, typewriters or computer, calculator, book/utility shelves
and a wastebasket to get started.

THE ART OF NETWORKING

To be successful in your business, you must develop a network of
contacts. These are people whom you know who can provide a
favorable introduction to potential clients. The more people in
your network, the better the prospects for success. With an
increasing number of contacts comes numerous opportunities to
offer your services to people who may well be interested in
contracting for them.

You network constantly until it becomes a routine, part of your
business. No matter who you are talking to at the moment, that
person could be helpful to your business in some way. Most
people are complimented by your faith in them as a contact
person since it emphasizes the influence they can provide.

Networking is a reciprocal process. If you are seeking
someone’s help to obtain a lead, you must also be prepared
to assist your contact in the same exact way.

Use your business card to introduce yourself where possible,
perhaps at a social setting or at local meetings like Rotary
or Kiwanis. Chamber of Commerce meetings also hold some
potential to meet other business owners in the area. These
are the people you want to meet since the idea of an answering
service may be important to them.

Don’t be afraid to talk about what you do. When meeting
someone new, the conversation inevitably turns to the type of
business you’re in, so describe it with the enthusiasm you have
for it. You don’t need a resume. Your card and your voice are
more valuable in networking.

Your immediate and extended family is the best initial source
of networking you can do. Get in touch with your local relatives,
explain what you are doing and see if they can provide leads
for you.

Past business associates, college friends, church members and
other individuals in organizations to which you already belong
can be great sources for prospective clients.

Join organizations! Kiwanis and Rotary meet every week, with
new members (and prospect!) coming in all the time. If you play
golf or tennis, talk to your partners. Consider the people you
see regularly: post office, hair salon, cleaners, gas station,
all of the normal daily activities encompass some form of business
who could use your service.

Once you’ve made a network of contacts, stay in touch with them.
A birthday card, a newspaper article of interest, a note about a
promotion, all of these are ways to communicate with you network
people when you’re not asking for names. Your are creating the
opportunity, however,for future business.

MARKETING YOU MUST DO

While networking can be an effective marketing tool for you, it
is not the only way to put your name and services in front of a
potential client. Further, many individuals do not like the
practice of networking and would prefer to solicit prospects on
another basis.

Marketing is a collection of activities that helps you to obtain
business. These actions may involve advertising, direct mail,
press releases, public appearances, promotional flyers or brochures.
Your services will not be contracted unless people know about them.
This is where marketing is useful. Marketing should create and
image for you, one that is professional and encourages individuals
to look further into what you have to offer.

Marketing is also about understanding who your base of potential
clients is and where they are located. Narrowing down your scope
of marketing to concentrate on the people most likely to contract
for your answering service requires thoughtful analysis. For
example, you could begin by focusing on just sole proprietors
at first. These are people most likely to be working away from
their business and in potential need of phone help.

There are numerous media outlets to advertise your services. It
costs money to advertise in newspapers or send brochures out to
targeted potential customers, so gauge your budget accordingly
when selecting your marketing outlets. Radio and television
advertising also carry a price, but can also be effective in
reaching a broad number of people.

Your marketing pieces, whether a brochure, advertisement or
commercial must list plenty of reasons for your services being
important and specifically why you should pro-vide these services.
You should decide on and then list the services you offer as some
or all of this copy will become a focal point of any piece you
create.

A brochure can provide a professional image for you while serving
functionally to explain the services you provide. It should be
simple in appearance and easy to read and absorb. Be informative
without being wordy. Anticipate and answer the questions someone
might have about your type of business, such as how many hours per
day your service will take calls.

The brochure layout is usually a six panel, front and back 8 ½ ,
11 inch sheet of paper. The panels include:

-a cover indicating your business name, address, telephone
number and logo;
-first inside panel describing your business and who a good
prospect for your services would be;
-middle inside panel should list your services and a brief
description of each;
-third inside panel should provide a list of testimonials from
others who have used your service, or, if new, from network
contacts willing to describe your phone voice, organizational
skills and reliability and put their name and business next to
their quote;
-middle outside panel should contain a brief biography of
yourself and your credentials along with any partners or other
employees you may wish to highlight; and
-final outside panel which will be designed as a self-mailer
with your return address on it. You will mail the brochure using
this panel as your envelope.

You should write the copy for your brochure, but get some help
laying it out from either the graphic artist who designed your
logo or the printer who will be printing the marketing piece.
Using two colors and minimal design should keep the price of
producing these mailing brochures very reasonable. The brochure
can also be used as a hand-out piece. It adds credence to your
business venture and lifts you above those others that don’t bother
investing the money in this important marketing tool.

Advertising can also put your name and service out to a variety
of people. A classified advertisement offering your services may
initiate some phone calls, but a larger display advertisement is
more likely to draw your potential prospect’s attention. Your
advertisement should be written to attract the eye of the reader.
The headline is the most critical part of the piece, but this will
either invite the reader to keep reading or go on to the next page.

Your key service is to help a business avoid losing money by
having that personal contact when someone calls their office.
This concept is what your headline should incorporate, such as
“How To Make Your Business More Profitable” or a similar theme.

People buy most often for emotional reasons. You are selling a
service. Thus the advertisement you create must have an emotional
pull that can convince a person to call you for more information.
An advertisement simply listing your services won’t generate the
response you want and need. But it the emotional enticement is
to help a business financially, to provide that human touch in a
mechanized world, you will have a better chance of attracting
potential clients.

The remainder of the advertisement can list some details about
you and the services you provide, but the headlines remains
focused on emotion. Certainly you can continue with the emotional
copy throughout the piece, mixing in some of the important details.
The better story you tell, the better your response. But the
headline will cause people to read the story. A poor headline will
send most readers elsewhere and a good story will remain unread.

Be positive! List the benefits of working with you, not the
disadvantages or passing on your services. The headline should
concentrate perhaps on SAVE THOUSANDS OF DOLLARS TODAY rather than
AVOID LOSING THOUSANDS IN YOUR BUSINESS. There are professional
ad agencies and copywriters who can assist you in getting it
right. It may be worth the price to put an ad together that
generates substantial response rather than saving the money,
writing the ad yourself and seeing little or no reaction to it.

The most effective ads tell us enough information, but leave the
reader curious to know more and thus, inviting the person to call
in. But once you have the person calling in, you have an excellent
chance to turn that prospect into a client. After all, it’s your
phone voice and manner that you’re trying to sell, isn’t it? Here,
the individual will get a first hand chance to see how their own
clients will be handled should you strike up a deal.

Run your advertisement in your local newspaper or other smaller
community publi-cations. Try radio advertising. It’s a cost-
effective way to reach people you may never get to contact otherwise.

The other marketing option for you is direct mail. You can generate
some incredible responses her, but if your are going to undertake
the expense of a direct mail operation, you should certainly secure
some assistance from professional copywriters to get the most
“bang for your buck”. Postage costs alone are high with direct
mail so you need an effective piece.

Direct mail is tricky, because you must get your message across
with a minimum of words. The direct mail piece is meant to entice
a prospect into calling for more infor-mation. Stay focused on
this. If you try to do too much, few if any people will read
your piece and respond.

The importance of immediate action must be emphasized. The piece
is meant to motivate the prospect to act now, today, not tomorrow or
next week or next month. Effective wording can accomplish this
motivating technique.

Direct mail can help you reach thousands of people you couldn’t
call yourself. It expands your capacity to reach potential clients
and makes the most of your limited manpower and, possibly,
resources.

Look for a direct mail house that works with copywriters. There
is a big difference between advertising and direct mail, so find
and individual with direct mail credentials. You could write the
copy yourself if it will capably produce the type of piece
described.

If you intend to undertake the copywriting yourself, remember these
basic principles:

-Headline! Headline! Headline! Your opening paragraph or title
in your direct mail piece has to make people want to open it up and
read further. Don’t be coy! List a key benefit immediately! Get
your prospect to turn the page!
-While listing your benefits, keep them at reality level. If
something sounds too good to be true, it usually is. People are
wary today of others who over-promise, so as you highlight the
benefits of your business service, emphasize how you are able
to offer this many benefits from your company. Utilize the word
“you” to let readers know they will be on the receiving end of
the benefits.
-Be as precise as you can. Give prospects tangible services and
explain simply how they work. People are bottom-line today and
want to make up their mind to pursue a service or not in quick
fashion. Specifics give people enough data to make up their mind
and will almost always help you get a response. It will also not
waste time for you and those who are not interested in your services.
-Obtain some testimonials to use other people’s words, other than
your own, to describe your benefits and services. Use complete
names to indicate authenticity behind the comments.
-Make your copy conversational, easy to read, simple. Words
should be short. Sen-tences should be brief. Paragraphs should
be concise. The copy should encourage the reader to act. If a
reader understands the copy, the action you want (a response) is
more likely to happen.
-Incentives often motivate people to act immediately rather than
procrastinate. If, for a limited time (14 days, 30 days), your
service can be obtained for less than the usual monthly rate,
you’ve encouraged people to call in and take action. If they
understand the service you offer and how it can benefit them,
plus you add a feature such as an incentive to call NOW, you’ll
probably increase your response by a large margin. Some people
need that extra shove.
-Guarantee your work. Offer a no-risk, money back 30 day deal
to try your service. If the customer isn’t satisfied, offer the
refund. This will reassure the potential client and, since you
have great confidence in your own ability, you really aren’t
giving anything away since you know people will benefit from
your services.

Your direct mail piece must sell you along with your services.
IN a phone business, you are the most valuable asset. People
buy from people. The more satisfied someone is with you, the
more likely the chance of securing a contract.

Marketing is a potpourri of potential activity. Create a
marketing strategy and follow it through. You can’t help but
generate a number of individuals interested in what you have to
offer. Remember, too, that marketing is an ongoing process.
You are always on the lookout for new clients. The value of
continued marketing efforts is a constant stream of prospects–
and financial security for you!

ADDITIONAL TIPS FOR SUCCESS

Here are a few suggestions to attract prospects, save money
and generally launch a successful business venture.

During the direct mail phase of your marketing campaign, an
incentive was encour-aged to bring in new clients. The lifeblood
of any business is new people coming into it. What better way
than to encourage them through the use of a free promotion.

When you give something away, you can expect to find someone
there to take it. This will also be true in your marketing
solicitation. If you offer a reduced rate for a period of
time, or contract for five months and give the sixth month
away free, you will entice people to take action.

The irony of this situation is that the more you give away, the
more business you will attract. If you sent a direct mail
response out and obtained three clients who contract with you
for six months at $50/month, you’ve attracted $900 worth of
business. But if a giveaway of the sixth month free doubles
your response, you’ll contract six people paying for five months
at $50/months, but increased your revenue. You gave away six
free months, but increased your clientele and your revenue doing
it. In addition, you now have clients who are potential renewers
when the contracts expire.

You could also give away a free gift to new enrollees instead of
the month’s free service. A number of promotions companies exist
who can help you select an ap-propriate gift and buy it at bulk
rate. Your giveaways can sometimes amount to only $4 or $5 per
person, and you end up with six and twelve month contracts as
a result.

With incentives, offer something tangible and relevant to your
business. Don’t attach any strings. Make it a straight
forward offer with no fine print. People appreciate and are
more likely to respond to this type of offer.

Another tip for success is to minimize your printing costs.
Direct mail costs money. Brochures cost money. Business cards
and stationary cost money. Take some steps to keep your
printing bills within reason.

Shop for competitive quotes. There are usually a number of
printers in a given area, so you should be able to find three
or four to bid on your job. If you are having business cards,
stationary and brochures done, do them all at once and advise
the printer to quote each job both separately and combined.
Often, a combined job can reduce your costs.

Be specific about the job. Get all the costs up front. If you
want the printer to set the type, fold the piece, whatever, be
sure you have all this priced out first.

Stick to standard sizes and colors. Avoid heavy paper stock.
You don’t have to use postcard stock, either. Give the printer
ample time to complete the job. Rush work costs money and the
costs will be passed on to you.

Printing costs can eat up a budget quickly. The more homework
you do up front, the less you’ll spend and the more likely the
piece will be done to your satisfaction.

As you solicit additional business, your base set of clients
can hopefully provide some solid testimony as to the value of
your services. Securing these endorsements can be the
foundation for a new marketing campaign to add new clients
and “grow” your business.

You’ll likely have to ask for this feedback yourself. Most
people don’t take the time to write a letter, but most often
simply comment to you personally about their pleasure in
your services. So, ask them to put their thoughts down on
paper. If someone has written, ask their permission to
reprint it and use their name. Or you can initiate written
comments by sending out a customer satisfaction form which
encourages comments from your clients.

Whichever way you choose, these endorsements can help you
obtain new business.

Finally, don’t overlook the outlets through which you can
publicize your business–at no charge! It amounts to free
advertising and you should be watchful for the opportunities
this presents to tell people about your services without
increasing your marketing budget.

News releases about your business can generate some
publicity for you. Many smaller newspapers publish a
Business section where new businesses in the area are
noted and a few specifics spelled out. The newspaper
won’t know to print this unless you sent them a news
release.

Send your release with a cover letter to the city or business
editor of your local newspaper, the managing editors of
business trade publications and the news directors for local
radio and television stations.

The cover letter should briefly state the positive aspects of
your business and why your services would interest their audience.
The news release is more formal and should be typed on one sheet
of paper, double-spaced, and headed “NEWS RELEASE” with the day’s
date. You should also list a “FOR MORE INFORMATION” header
followed by your name, address and phone number. The copy
itself should be short and to the point, but with the same
idea as an advertisement. The first paragraph should be your
“headline grabber”, the idea of which is to get the reader
(editor or director) to become interested enough to keep reading.
Emphasize the convenience of your service to small business owners
who don’t have an office and generally are out working all day.
Don’t be long winded. Sell them on your basic idea. If they’re
interested in publicizing it, they’ll call you for more information.

Emphasize how your business relates to current news trends, such
as the age of computers taking away some of the human touch and
you’re trying to restore that so that a business’ customers will
be able to talk to a person rather than a machine. Make it
newsworthy. You’ll have a better chance of getting the free
publicity you seek.

START-UP COSTS AND HOW TO FUND THEM

Most of the start-up costs of the phone answering service
business have already been detailed in the previous text. If
you do not have the money to start your business but feel certain
it will be a success, try and raise money yourself to get the
business off the ground.

The easiest way to obtain money fast is to talk to your friends
and relatives about it. Getting them to invest in your idea will
be an easier sale, perhaps, than talking to com-plete strangers
about it. The downside is that if the business fails for any
reason, that relationship may never be the same.

If family and friends are not potential investors, you must
look outside this familiar circle to other candidates. There
are two types of investors to seek: those who only wish to put
money into the business hoping for a return and those who wish
to contribute both money and talent in exchange for an equitable
share of the profits.

This latter individual would be considered an active partner
while the former investor would be more of a silent partner. The
active partner would share the duties of the business with you,
put up some money and thus own a percentage of the business equal
to their time, talent and investment. The silent partner may put
up the entire amount needed but gives you a share of the profits
since you are doing all the work of running the business.

Partners can own whatever share of the business all parties deem
fair; there are no set guidelines here. There are individuals
known as venture capitalists who are con-stantly on the watch for
potential lucrative new businesses to invest money in with an
expectation of a large return. You can advertise in the paper
as seeking venture capital for a phone answering service business
and even list the amount of money you are seeking. Then, when
contacted, the real negotiations will start.

You will be expected to provide a potential investor with
information about your background and qualifications to run a
phone answering service business. You should have a detailed
marketing plan already worked out along with revenue and expense
projections to show your potential investor(s) what they can
expect for a return on investment. The more prepared you are,
the better likelihood of attracting the money you need to get
started.

You could also try to put up the cash yourself and be a 100%
owner. Review your personal asset and liability situation to
see if enough money can be raised to initially fund your
start-up costs. Insurance cash value, savings, sale of goods
you could do without, credit card advances, even a second
mortgage are all ways to personally raise money for your
business venture. You must decide if this is the right way
to go. Do you believe your business can be a success
financially? If so, there is money out there for you to find
so you can turn your dream into a reality.

The other option for you may be a small business loan. Do you
have a good credit rating? How well do you know you local
banker?

Again, you must have an exceedingly high belief that your
business will take off since loans have to be repaid. If you
are unable to raise the money you need any other way, a small
business loan may be your best bet to acquire the capital you
need to get started.

GETTING HELP FROM THE SBA

The Small Business Administration has made it easier to apply
for smaller loans today. If you’re seeking cash in the amount
of $50,000 or less, the paperwork required has been diminished
significantly. What’s more, your local community banker
may be able to approve the loan person-ally without having to
send it to the SBA. The SBA is guaranteeing the loan so local
banks are more apt to lend money to new ventures as well as
established ones.

You will have to put up at least 25% of the cash you need. The
SBA will not under-write 100% of the venture. But, given the
relatively low start-up costs for a phone answering service, you
may not need more than $50,000 and can likely raise up to
$12,500 personally to obtain the other $37,500 from the SBA.
This would give you 100% ownership in your business with only
the loan to be paid back.

The SBA has several other types of financial assistance
programs, too. For potential small business owners that don’t
have adequate credit to obtain a loan through the usual bank
channels, the SBA can provide the funds through several different
loan programs.

Your small, community bank(s) are the firms that generally work
closely with the Small Business Administration to provide these
dollars to people in their area. Women and minorities are
especially considered under a number of different SBA loan programs.

Some of the special circumstances loans that are available are
economic opportunity loans, handicapped assistance loans and
displaced business loans. These are all programs to help
disadvantaged individuals obtain the money they need to get a
good idea off the ground. Applications for loans will require
much the same data as you would have prepared for a venture
capitalist or any other potential investor in your business.
Your back—ground and qualifications, your marketing plan,
revenue and expense projections and the need for the services you
provide will all have to be discussed thoroughly with the loan
officer before you can expect any loan approval.

A good credit rating is helpful in obtaining the loan. If you
have a history of paying back what you owe, chances are you would
pay this loan back, too.

There are a number of Small Business Administration locations
near you. The following is a list of regional offices and
development centers that can assist and direct your application
for a SBA loan:

NATIONAL OFFICE:
Small Business Administration
1-800-827-5722

REGIONAL OFFICES:
60 Batterymarch St. 26 Federal Plaza
Boston, MA 02110 New York, NY 10007
(617) 565-5590 (212) 972-5270

231 St. Asaphs Rd. 1375 Peachtree St., NE
Bala Cynwyd, PA 19004 Atlanta, GA 30309
(215) 962-3700 (404) 347-2441

219 S. Dearborn St. 1720 Regal Row
Chicago, IF 60604 Dallas, TX 75235
(312) 353-5000 (214) 767-7629

911 Walnut Street 1405 Curtis St.
Kansas City, MO 6416 Denver, CO 60202
(816) 426-3316 (303) 294-7186

450 Golden Gate Ave. 710 Second Ave.
San Fran., CA 94102 Seattle, WA 98104
(415) 744-6820 (206) 220-6500

SMALL BUSINESS DEVELOPMENT CENTERS
Alabama
Alabama International Trade Center
University of Alabama at Brimingham
400 North Martha Parham
Tuscaloosa, AL 35487
(205) 348-7621

California
Export Small Business Development Center
110 E. Ninth Street, Suite A761
Los Angeles, CA 90079
(213) 892-1111 or (800) 371-1110

Export Small Business Development
Center Satellite
300 Esplanade Drive, Suite 1020
Oxnard, CA 93030

Florida
Florida Atlantic University
P.O. Box 3091
Boca Raton, FL 33431
(407) 338-2273

Small Business Development Center
University of Central Florida
P.O. Box 2500 Building CEBA II
Orlando, FL 32816
(407) 823-5554

University of West Florida
College of Business, Building 8
Pensacola, FL 33251
(904) 474-2908

Georgia
International Trade Development Center
University of Georgia / Chicopee Complex
1180 E. Broad Street
Athens, GA 30602
Small Business Development Center
Kennesaw College
P.O. Box 444
Marietta, GA 30061
(404) 423-6450

Small Business Development Center
Clayton State College
P.O. Box 285
Morrow, GA 30260
(404) 961-3440

Illinois
Illinois World Trade Center Chicago
321 N. Clark Street, Suite 550
Chicago, IL 60610
(312) 467-0550

International Trade Center
Bradley University, Lovelace Hall
Peoria, IL 61625

Louisiana
Louisiana International Trade Center
University of New Orleans
368 Business Administration
New Orleans, LA 70148
(504) 286-6978
Maine
Small Business Development Center
University of Southern Maine
96 Falmouth Street
Portland, MA 04103
(207) 780-4420

Massachusetts
Small Business Development Center
University of Massachusetts
Amherst, MA 01003
(413) 545-5580

Michigan
Center for International Business Development
Michigan State University
6 Kellogg Center
East Lansing, MI 48824
(517) 353-4336

Mississippi
Small Business Development Center
International Trade Center
Millsaps College
Jackson, MS 39210
(601) 354-5201, ext. 407

New York
Small Business Development Center
State University College at Buffalo
1300 Elmwood Avenue
Buffalo, NY 14222
(716) 878-4030

Small Business Development Center
Rockland Community College
145 College Road
Suffern, NY 10901
(914) 356-0381

Ohio
Small Business Development Center
218 N, Huron Street
Toledo, OH 43604
(419) 243-8191

Small Business Development Center
Lake County Economic Develop.
Lakeland Community College
Mentor, OH 44080
(216) 951-1290

Oklahoma
Small Business Development Center
Rose State College
6420 Southeast 15th
Midwest City, OK 73110

Oregon
Small Business Development Center
Portland Community College
One World Trade Center
121 SW Salmon Street Suite 210
Portland, OR 97204

Pennsylvania
Small Business Development Center
Lehigh University
International Trade Center
301 Broadway
Bethlehem, PA 18015
(215) 758-3930

Small Business Development Center
Gannon University
Carlisle Building 3rd Floor
Erie, PA 16541
(814) 871-7714

Small Business Development Center
Pennsylvania State University at Harrisburg
Crags Building
Route 230
Middletown, PA 17057
(717) 948-6069

Wharton School of Business
University of Pennsylvania
Vance Hall, 4th Floor
Pennsylvania, PA 19104
(215) 898-4861

Small Business Development Center
Duquesne University
Rockwell Hall, Room 10 Concourse
600 Forbes Avenue
Pittsburgh, PA 15282
(412) 434-6233

Rhode Island
Small Business Development Center
Bryant College
450 Douglas Pike
Smithfield, RI 02917
(401) 232-6407

Tennessee
Small Business Development Center
International Trade Center
Memphis State University
Memphis, TN 38152
(901) 678-2500

Texas
North Texas Small Business Development Center
International Trade Resource Center
2050 Stemmons Freeway, Suite 150
Dallas, TX 75258
(214) 653-1777

Small Business Development Center
University of Houston
601 Jefferson Street Suite 2330
Houston, TX 77002
(713) 752-8404

South Texas Border Small Business
Development Center
University of Texas at San Antonio
San Antonio, TX 78285
(512) 224-0791

Washington
International Trade Institute
North Seattle Community College
9600 College Way North
Seattle, WA 98103
(206) 527-3732

FINANCIAL AND LEGAL CONSIDERATIONS

You’re almost ready to start your new phone answering
service business. There are some financial and legal
considerations that will impact your business.

First, be sure to check with your local zoning office to
be sure you can run a home- based business if you intend
to start in your own home. Your answering service business
is not a high customer-traffic business, so it shouldn’t
be a problem, but check anyway as you may need a specific
permit to operate your business. It should only involve
an application, but could require a hearing, too.

You may have to have your home inspected to determine if
it meets business-type regulations for health, building and
fire codes. If it doesn’t, you will have to make the
necessary modifications to operate the business out of your
home. These alterations should not be major.

Check with an accountant concerning the tax-deductibility of
a home-based business. The Internal Revenue Service is more
careful in checking these deductions today. In general, the
amount of space in your home devoted to the business is eligible
for a deduction. That area must be used exclusively for
business, however.

Once you determine the space involved, divide that into the
total space in the house to obtain the percentage of your home
used exclusively for business. That percentage will be applied
to some of your usual house bills like your electric bill.

Keep a journal of expenditures for your business along with
the corresponding re-ceipt. Record and file them by month for
easy reference. Many of these expenses are deductible to your
business, up to certain specified limits. New tax laws can
affect their deductibility, so it’s best to keep up to date
through an accountant.

As a self-employed business owner, you would be filing a
Schedule C (Profit or Loss for Business or Profession) along
with your regular 1040 form. Your accountant can brief you on
other forms you need to complete during the year, too. There
is usually an estimated tax payment to be made each quarter
along with FICA and Unemployment taxes.

Insurance will also be a necessary part of your business life.
Some of the insurance is actually required.

Health insurance is a familiar vehicle to cover hospital and
medical bills. A number of states have enacted recent health
care reform legislation to aid small businesses in obtaining
quality, affordable health insurance. Contact your state
insurance department for more information about the programs
in your area.

Workers’ compensation is often required by law. This coverage
provides medical, hospital and disability income benefits for
on-the-job injuries or illnesses. This program is administered
by each state individually and you should check with your state
insurance department to see if you are required to carry this
coverage. If you are the only worker, some states merely
recommend rather than require the coverage be carried.

Liability coverage may also be a good investment for your
business. This protects the business against liability for
adverse actions which affect your client(s). If you
incorrectly record a message and that error results in the
loss of business to your client, there is always the
possibility of a lawsuit today. Liability insurance can be
purchased to cover the threat of a suit.

If you have a company car, insurance will be necessary and the
car must be de-signated for business use. This may or may not
be necessary in a phone answering service business, but if you
call on clients or potential clients, then you are using the
car for business and may be eligible for a business tax deduction
for a portion of in-surance payments on the vehicle. Your
accountant can verify the deductibility of any item associated
with a company-owned car.

If you are working out of your home, check your homeowners
policy to be sure your property listing includes any business
equipment you have such as phones or a switch-board. It you
are operating the business out of an office you purchased, you
will need to have hazard insurance to cover that facility
separately.

Life insurance can be used to cover your life in the event of
death. This money can be used to continue the business if
surviving family members wish. Disability insurance should also
be considered. This policy provides income to you and your
family in the event you suffer an injury or illness (at any
time, not just “on-the-job”) and cannot work. Many insurance
companies do not offer this type of coverage to business owners
that work out of their own home, but check with your insurance
agent to see what he or she can find.

If you have a partner, you might also consider some type of
buy-sell coverage so that if one of you dies or becomes severely
disabled, the healthy owner can buy the interest in the business
back from the one affected. Both life and disability insurance
is available to fund this need.

Finally, you should also keep an eye towards the day when you
will retire from work-ing. Business owners are able to put
money into various pension-type vehicles on a tax-favorable
basis.

There are three common types of retirement plans for self-
employed business plans: the Individual Retirement Account (IRA),
the Simplified Employee Pension (SEP) and the Cough plan (often
called HR-10).

The IRA is a familiar vehicle that lets you put up to $2,000
before taxes into a retire-ment plan. For many business owners,
this amount is insufficient and thus other vehicles where larger
amounts can be put away for retirement are more attractive.

A Simplified Employee Pension plan is similar to an IRA except
you can contribute much more to it, up to 15% of your income
but not more than $30,000. That’s significantly more than the
$2,000 maximum pre-tax contribution under the IRA. The Keough
plan is similar to the SEP except that the contribution
percentage can be as high as 25% up to $30,000. This type of
plan is usually selected by sole pro-prietors. These retirement
vehicles should be discussed with your accountant for advice
on the best avenue to pursue. However, not only do these
programs serve as a source for retirement funds, but they assist
the business owner with reducing current tax liability, too.
Any business owner should review one’s options carefully.

You should now have all the information you need to determine
if a phone answering service is the right business start-up
idea for you.

Good luck!