Since 2003, Philippine business process outsourcing or BPO industry has been growing at a rate of 20% every year. From a US$ 1.3 billion industry in 2003, outsourcing generated US$ 18 billion in export receipts for the Philippines in 2014.
Moreover, demand for outsourcing services in the Philippines is expected to continue until 2016 in the near-term. Commercial property management group CB Richard Ellis reported that this industry had committed 700,000 square meters of office space for back office operations, and this may not be enough to accommodate demand.
It is no wonder that call center jobs abound in the Philippines. In 2013, the Department of Trade and Industry reported that BPO hired 900,000 employees and still there was a shortage of 140,000 positions in 2014. It has been estimated that there will be 372,000 jobs available in the BPO industry until 2017.
The large demand for outsourcing services in the Philippines has also created a niche market for entrepreneurs to set up their own home-based call center business. A good number of these entrepreneurs came from the industry and have amassed a wealth of experience by managing various campaigns.
I happen to be one of those entrepreneurs.
With my partners, we ran a BPO company from 2009 to 2013. It was our first venture in BPO; none of us had experience in the industry even in the capacity of an agent. After a shaky first year, we hit our stride in 2010 and remained profitable until we hit major roadblocks in late 2012. It was then that I realized the current structure, and in fact, the overall perception of the Philippine BPO industry was flawed.
People have this grandiose vision that to be in the outsourcing business, you must have seats. I’ve met my share of entrepreneurs since 2006 who invested millions in a facility to house BPO operations.
I remember one conversation I had with a fellow in 2008 when I was conducting a feasibility study on outsourcing business. He told me, with a twinkle in his eye, that he had just opened a 100-seat facility in Eastwood, Quezon City. He then proceeded to open a portfolio of the hardware his partners invested, which included high-end predictive dialers with automatic call recording features, top-of-the-line Plantronics headsets, ergonomic chairs, “green-technology” PCs, and fully soundproof calling area.
“Wow! Your clients must be happy with your service. How many clients do you have?”
That’s when the twinkle turned into a shade of pink that flushed unto pale white skin.
“Um . . . we don’t have a client.”
He closed within 6 months, and all their assets were liquidated with a considerable loss.
Starting a call center business is not a “chicken and egg” situation. You must have a client. And this presents a dichotomy.
How can you land a client if you don’t have the facility?
The answer my friends, is simple: operate according to scale. Start out small. And that is the genius of starting a home-based call center business!
Running a home-based call center business immediately eliminates the largest fixed cost item on your cost of operating expenses or COPEX: Rent. Thus, many centers have lost money on rent; our center was one of them.
For 80 seats, we were paying Php 650,000 a month! Rental expense grows into a creature of mythical status if you are managing a pay-per-performance account where fees are based on set quotas. If your team doesn’t make it, you’re in serious trouble.
Moreover, rent escalates by 10% every year. Rental escalation is a standard provision in every lease agreement. The lessor will state that escalation is subject to negotiation; but trust me, it’s nonnegotiable.
Second, with a home-based call center, you can manage other direct costs, such as Internet, power, telephony, and salaries, but only if you operate according to scale!
Tips on how to start your own home-based call center business
1. Determine in what type of outsourcing operation you want to specialize
The term call center is incorrect.
The politically correct term should be contact center, which implies a two-way relationship between the center and the client.
Clients, including prospective ones, should be able to contact you through at least five channels of communication: e-mail, land phone, fax, mobile phone, and regular mail.
Establishing a contact center allows you to specialize in other areas of outsourcing that are not necessarily voice campaigns. Before I started my home-based contact center, I made a decision to specialize in nonvoice campaigns. The initial clients I signed up were for legal and closed caption transcription.
Defining your specialization will determine the hardware and software you need to support your services.