5 Valuable Tips for Small Businesses to Succeed in BPO


In the 1990s, most budding entrepreneurs would look at the fast-food industry as their dream business. The allure of seeing long queues at the cashier, overflowing capacity, and of course, the constant ringing of the cash register is enough to get an entrepreneur motivated to start a fast-food business.

Although the restaurant business has definitely seen better years than at present, it still continues to thrive. However, another industry has begun to captivate the desire of entrepreneurs. Similar to the fast-food industry, it is labor intensive but requires the latest technology to deliver the best results.

During her term, President Gloria Macapagal Arroyo declared this industry, the “new growth engine of the Philippine economy.” The current Philippine President Benigno S. Aquino III is a strong advocate and continues to promote this industry heavily in his foreign visits.

It is an industry that has been growing at a rate of 46% per annum since 2006. In 2016, it is estimated to generate Php 25 billion in receipts. This industry can tally Php 48 billion in 2020 by assuming a constant growth rate of 12%.

The new engine of growth of the Philippine economy is outsourcing. It is popularly referred to as BPO or business process outsourcing.

For a time, the race for global outsourcing supremacy was between Philippines and India. However, as of 2014, the Philippines has apparently surpassed India as the premiere destination for global outsourcing. The projections have the Philippines on track to account for 20% of the global outsourcing pie, which is valued at US$ 250 billion.

Given such glowing numbers, understanding why many Filipino entrepreneurs want to start an outsourcing company is easy.

However, as with any planned venture, you have to study the numbers carefully. Do not assume that the consistent growth of the BPO industry automatically translates to a highly profitable business.

Outsourcing as a business strategy works because it provides a double-edged sword for businesses. First, it streamlines the cost of operations. Second, the availability of skilled labor and updated technology ensures the quality of work and timely deliverables.

Revenues and expenses are the variables in the profit equation. In theory, you have a sure formula for profit when you have a strategy that lowers expenses while maintaining or improving revenue generation.

The Philippines continues to lead the world in outsourcing because it has a comparative advantage in labor and offers economies of scale.

If you plan to start an outsourcing company in the Philippines, keep the economies of scale in mind.

I’ve been in the BPO industry since 2008. I cofounded a company that started out by managing the outbound requirements of a telecommunications service provider from the United States. Prior to my career in BPO, I was in the fast-food business for 10 years.

Therefore, I am qualified to tell you that profiting from the fast-food business is easier than that from the BPO industry.

In the first six months in the food business, we were generating profit. In the first six months of BPO, we were nearly bankrupt.

I hope that the preceding statement did not douse your plans to start a BPO company. By the second quarter of 2009, our company turned things around and started profiting.

I just want you to keep things in perspective. Despite the attractive figures, risks are prevalent because the industry remains highly competitive.

Many articles on how to start an outsourcing company can be found online. I’ve read quite a few; personally, most are generic. They take the cookie-cutter approach and present BPO as if it were another “by-the-number” enterprise.

This article is written from the perspective of someone who has opened, operated, and in fact, continued to operate a BPO company.

I will not tell you to register your business, build a website, and network because these are the standard procedures to start and manage a business.

Related: 6 Valuable Tips on Setting Up Successful Home-Based Call Centers

Every entrepreneur has solid technical and fundamental competencies. The key differentiator is the behavioral component: are you made of the right stuff to succeed in BPO?

What I will share with you are my experiences, including the successes and failures, in the last six years as a proprietor in BPO. I will give you hindsight, observations, and a few original innovations I’ve undertaken with my new BPO company, Benchmark Global Management Solutions, to thrive despite the presence of several large-scale key players that have dominated the industry for years.

Here are five valuable lessons that you must learn if you want to start a BPO company in the Philippines:

1. Define your personality

Every business is unique simply because YOU are unique. Thus, those online cookie-cutter articles you’ll find online are useless.

The following is a very valuable lesson that I learned late in the industry:

“Who you are is how you should manage your company.”

I learned this lesson from my first client, namely, Light-Core, which is a behavioral leadership consultancy firm from Canada.

They opened my mind to the concept that there should be no distinction as to who you are outside the business and who you are inside the business. You have to manage your business according to what you believe in. Your beliefs are founded in your core values.

In my first BPO company, I accepted the reality that I was new in the industry. Therefore, I should submit myself to its norms and practices.

Here are a few of the “truisms” I learned from the industry:

  • Always hire based on experience and curriculum vitae; pirate if you have to.
  • If you build your facility, they (the clients) will come.
  • If you’re a small BPO company, you should hire a broker to get a client or ask for spill-over campaigns from large companies.
  • Scripts are important and agents should strictly abide by them.
  • Agents must always hide their true identities and use fake accents.
  • If you’re a small BPO company, you should agree to a commission- based payout.
  • You can never get pay-per-hour accounts if you’re a small company or new in the industry.

If you follow any of these “truisms,” your venture into BPO will fail miserably. I will discuss these “truisms” as we go along, but I know what I speak of because these were the reasons why the first company I cofounded eventually closed shop in 2013.

By 2011, we were still doing well. However, our investments in the other campaigns were losing badly that they were draining our profits.

I could not fight for my ideas because my fears and self-limiting beliefs were greater than my convictions. As Light-Core surmised, I was afraid to venture outside my comfort zone.

I knew what I had to do but was afraid for fear of being held accountable if the courses of action worsen the situation.

Before you start a BPO company, define your personality by identifying your five nonnegotiable core values. These nonnegotiable core values shall form the cornerstones of your business foundation. Nonnegotiable means that you will not compromise your core values regardless of the situation or condition.

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