How to Start a Call Center or BPO

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Hello friends,
A lot of budding entrepreneurs are turning to the BPO industry now-a-days. Even though it looks promising, it is not as easy. I have experience starting a call center and I wish to share a few things that I learned the hard way. If you want to set up a call center, you can begin with:

Setup Guidelines and Can a Small BPO Exist in India? and Call Center Basics

I will be presenting a lot of other details in the coming posts, but in this post, I’m discussing not the procedure of starting a call center, but the purpose and the softer aspects of business itself.

Everywhere on the internet, people have given instructions about starting a call center, but it is not like a mathematics problem that if you know the formula, you can easily get a solution! In business, there are a lot of things that one needs to pay attention to. Let’s discuss one by one.

[1] The Industry: Before you take a plunge in any business, you need to know the industry trends, challenges, opportunities and threats. Check out: Evolution of Key Services and Verticals in BPO And, it isn’t enough to just create a docket. What is needed, is the market information on your fingertips. This should include details like which call center has what type of client, how much they are getting paid, where can there be frauds, how to save yourself from frauds, where you could get financing (whether financing is necessary or you can do self-financing), what are the manpower challenges, what are the legalities (including licenses, legal pitfalls, and where all can you get legally stuck), the attrition rate, etc. Also, you need to learn from experiences of the other entrepreneurs of your industry – including successful as well as failures. Apart from that, think about what problems you can get into, and what all can be the possible solutions BEFORE actually starting the business. Check out: BPO Fraud

[2] Business Vision: Everybody can earn money and every business pays. But YOU have to decide what business you want to get into, which should be based upon a thorough study. Where you are sure you will get profit, get into that business. At the same time, remember that nobody can start earning profits from day one. Define the terms: timeline to open shop, timeline to stabilize the business, timeline to break-even, and growth vision. In case you face losses, you have to decide beforehand, how much deeper you would go… and stick to it. Example: If you have decided that you won’t lose any of your personal assets, and if such a situation comes in your business, then no matter what the circumstances, stick to what you have decided. In case you had decided that in order to save your business, you’ll sacrifice your personal assets, but not go in negative by piling debts, then stick to it. It is advisable, never to cross the zero line and go in minus (debts).

[3] Financing: There are two ways: (1) get finance from somewhere and (2) self-finance. Many first-timers think that they can sustain the business with their own money, i.e., self-financing. This is because of many reasons like: our business plans are weak and hence, don’t attract financers (like banks or VCs) OR the financers may meddle/influence our decisions OR we have to share our profit with the financer even when we are doing all the hard work and they’ve paid just once. But there are advantages and disadvantages of both the options. If we do self-financing, then we are the sole owners… it is our business, our game and our profit; no other person can have a say. BUT, remember that if there is an emergency, then a financer can save our business in the nick of time. Even if you have your personal assets, it may take time to liquefy them. Also, your personal assets may have emotional value to you. Hence, even the slightest delay may affect loss of business opportunity or worst case scenario, your business continuity. Also, your financer could be influential, which may help you avoid or delay a lot of problems. This proves beneficial as you get time to act or react.

[4] Legalities: Always remember that legalities are the basic foundation of any business. Many first timers think that it is just a start of their business and there’s no need to invest in a legal advisor. But it is the start of the business, where we are most vulnerable, because that is the time we sign a lot of documents without giving much thought. REMEMBER: Never sign a document as it is, which is given to you from another business; you also can add your own terms to the agreement or object to some of their terms before signing. Just because the other business is larger than yours, don’t feel intimidated. If you were smart and strong in your legalities, then nobody can harm you. Sometimes it happens that whatever is discussed is written in a confusing way in the document for signing. Just a word here and there may cost you a lot of money! Never take any shortcuts to legal aspects. There’s a trend in case of small call centers to sign the documents and send it over the internet – there’s no face to face meeting for signing crucial documents. This is very risky because you’ve never seen the person, never seen his business. Sometimes, even a face to face meeting doesn’t ensure payment, then how can we base our complete business and risk every penny invested, on a virtual signed document?

[5] Expenditure: The market isn’t all black or white. There are a lot of gray areas everywhere. A cheaper item isn’t always bad, and a costly item isn’t always good. At the same time, we shouldn’t cut short on all our expenses because now we are responsible, and we shouldn’t expend all we have just because now we can! Evaluate every quotation that comes your way and try to find an alternative, cheaper solution which would give you the same quality and utility, but observe caution. Example 1: the dialer software costs approx. Rs. 10,000 per PC, but someone may offer you dialer software for just Rs. 4000 per PC! Find out what he has to offer. NOTE: There are a few dialer softwares which are available on the internet FREE OF COST. Find out whether that person is trying to sell you the free software for a cost. Example 2: Many ISPs try to charge a monthly rental for Static IP. Try and find one that doesn’t. Also, if you’ve worked in multinationals before starting your own center, then you may think that people won’t work with you unless you have a posh office. False. Employees don’t stick to posh offices, they stick to companies that care about their employees, the companies that provide them facilities and benefits.

[6] Technical Aspects: It is always better to know the technicalities yourself. If you don’t, then there’s a possibility of getting swindled sometimes. To avoid this, try and learn as much as you can from the technicians that you hire. Check out: Technical Aspects of Starting a Call Center And, one stop shop for all your technical needs may turn out to be a ripoff. So, research well. You can get help from any tech person knowledgeable in VOIP and networking.  All you really need is a server, some workstations, and the broadband connection.  Call center technical consultants will charge an arm and a leg since they are “specialized”, but again, most technical consulting firms can do it as well. You may also find many people selling dialing minutes, but get the best price by negotiating hard from a good vendor.

[7] Recruitment: Manpower is the most important asset for a BPO. No matter how strong your business plan, technicalities, financials or employee facilities are, your business won’t earn you money unless your ‘manpower’ gives you the desired results. Many start-ups think that spending on manpower by going to recruitment consultants is a waste. One of my friends did that himself! He tried to do the hiring for his company on his own, because he thought since he had taken almost 1000 interviews during his tenure with big companies, he could do the same with his own company as well! But when he got down to recruiting a small team of 15, he had to postpone his process start date only because he couldn’t get the required manpower in the stipulated time. Finally, he had to settle for mediocre talent just to meet the deadline. He was lucky that the client waited for him to start the operations. But such delay is a loss of earning time and sometimes, loss of business as well. Moreover, if we settle for mediocre talent, then it hinders our earning potential, and may slam us with penalties for lack of performance also. Check out: Numbers to Crunch

I would be discussing/sharing some more things with you in my future posts.

You may also like to check out MY BOOK.

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