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.
2. Incorporate your business
I was sitting on the fence with this one but after much thought, I decided to include this as among the valuable tips in starting a home-based call center business. Perhaps the choice to incorporate would depend on what your long-term goals are. Besides, you have to register your business in the first place.
A business that is incorporated presents to the clients a professional entity with a strong commitment to develop their business over the long term. A corporation also has advantages in terms of the extent of its obligations compared with a company under a partnership or sole proprietorship.
3. Build a website
A website is your business address on the World Wide Web. If you plan to build a career in managing an online business, you must invest in a website. The biggest mistake of some entrepreneurs is they scrimp on their website.
There are free, downloadable templates from WordPress that have been widely successful and effective for many businesses regardless of size or scale. You can absolutely use these templates for your website but it is strongly advised that you hire a professional website designer to build your website.
To be effective, a website must be aesthetically pleasing to the target market and be functional at the same time. Functional means a website must be mobile responsive or have the capability to be displayed on mobile devices, such as smart phones and tablets. Second, it must have an appreciable download speed time.
The websites of Fortune 500 companies have an average download speed time between 7 to 10 seconds. Finally, its content, images, and text must be relevant and engaging.
Unless you have competent skills in website design, it is best to hire a professional.
4. Invest in infrastructure
Similar to your website, you should also invest in the infrastructure or support systems of your business. When you’re starting out, you have to eliminate all the possible risks to your business while there is time. Here is a checklist of the systems you may need to be in place:
- PC- Once your business is launched, you will be spending a minimum of 8 hours every day, maybe even Sunday, on your computer. This is where all activity flows through. Thus, you must ensure that it is dependable and capable of enduring heavy workload. I would suggest using a laptop for your business because it is more convenient than a desktop.
- Software programs- Again, depending on the type of campaign you choose to specialize in, you may have to buy or subscribe to specific software programs. For my transcription clients, I entered into a partnership with Med-Core Technologies, a software developer from Texas, so I can use their innovative V-Script transcription program. For an accounting campaign, I had to look into purchasing licenses for Del-Tek accounting software, which is also from Texas.
- Hardware- In addition to computers, you have to make sure your hardware can ably support operations. Even though I am handling nonvoice campaigns, I did not hesitate to purchase a set of Logitech headsets, which I’ve found to be among the very best since our days of managing outbound accounts. For my transcription projects, despite the arrangement with Med-Core, I asked a friend to build a proxy server out of a regular PC to act as FTP in case my clients could not access V-Script owing to browser issues.
- Internet connectivity– As a rule of thumb, I would suggest at least 3 mb to support a home based call center operation. Voice requires at least 85 kbps, and some entrepreneurs think 1 mb is enough. But we do know that we don’t really get 1 mb, right? If your budget allows, I would also suggest getting a back-up service provider. It’s already a matter of popular public opinion that Internet service here in the Philippines is overpriced and routinely underperforms. If your budget is tight, get 2 mb for your primary connection and 1 mb for your backup. If there is downtime, it should be resolved within 24 hours. If you’re lucky!
- Furniture– Since you will be spending a quarter of your day in the home office, it makes sense to invest in comfortable furniture, such as an ergonomic chair, a large L-shaped table where you can house your computer and do some paperwork.
Outsourcing industry provides a vast ocean of opportunities for every service provider. But if you don’t fish routinely, how will you catch clients? Growing a business is an endless endeavor; you should never be complacent with any amount of success you achieve.
This is especially true for start-ups who lull themselves into a false sense of security once they’ve landed that all-important first client.
Related: 6 Ways to Power your Inbound Marketing with Customer Service
I have news for you: Your work has just started!
In my first company, we had gone through three clients and lost huge sums of money before we landed on the “Big One.” Our mistake was we got complacent. We lost our hunger or as Apollo Creed said to Rocky Balboa, the “Eye of the Tiger.” We thought we were “set for life.”
The only thing that should be “set for life” is your commitment to succeed.
Even if you land a good-paying client, do not think even once that you’re “made.” A long-term contract is as real as the golden unicorn; it remains a figment of your imagination unless you make it happen.
Networking is not easy but you have to do it. Despite the availability of social networking platforms, use traditional networking strategies as well. Attend forums, symposiums, business seminars, and other events that bridge potential clients and service providers. Have professionally made business cards, brochures, and other marketing materials ready at all times.
6. Recruit skills
If you’re starting out, you don’t have to employ anyone else because most of your work for the first few months will be focused on networking activities. But if you do land clients who require specific skills that you don’t possess, do not hesitate to recruit.
In transcription, I hired transeditors or talents who have experience in editing. In transcription, you cannot be an editor until you’ve maintained a certain accuracy rating of usually 98% for a period of time. Transeditors are expensive, but hiring them lowers the risk of mistakes and late submissions.
Once you’ve landed an account, your attention would be divided among other functions. I would advise that you hire an assistant to ensure networking tasks are not interrupted.
Here’s my final tip for those who want to put up a home-based call center: Remember that just because you’re home based doesn’t mean you’re not as good as the facility-based centers.
Did you know large companies are afraid of small business and often wish they operated like one? The reason is simple: small businesses have less filters. Therefore, great connectivity exists between a client and a business owner. What does this mean? If there are less filters, the ability to make decisions is not impeded.
Large companies have complex structures, and organizational hierarchy can be widely dispersed. Decision-making goes through several processes, and these could be proved to be inflexible for some clients. Another issue clients have to deal with large service providers indicates that they are subject to the policy of PROTI or Potential Return on Time Invested.
Put simply, large BPO companies spend less time and resources on clients that do not provide comparatively high returns. In fact, some are subcontracted to small centers that need clients.
As a proprietor of home-based contact center, always give your clients your best effort in rendering top quality service and never hesitate to improve your value proposition.
People should change their “field of dreams” perception in BPO that if you build it, they (clients) will come. You must first plant the seeds and nurture them with passion, and at a given time, the fruit of your hard work will eventually grow and flourish.