Grow Your Answering Service Through Acquisition

There are two ways to grow your telephone answering service. One is through a strategic sales and marketing initiative, and the other is through acquisitions. Both have their advantages. Some answering services prefer the controlled month-after-month growth achieved through a deliberate sales and marketing program, while others favor to grow in spurts via acquisitions. Some answering services do both. Growth via acquisition is ideal for answering services that struggle with sales and marketing. And many answering services—despite their best sales and marketing endeavors —fall short of their growth objectives, so if you’re one of them, don’t feel ashamed. Expanding by acquiring other answering services may be the best option for you. (Although don’t forsake sales and marketing. Maybe you need to overhaul your sales staff, implement new marketing initiatives, or outsource sales and marketing.) Here are some key considerations in pursuing growth via acquisition: Fast Growth: When you acquire an answering service, your business expands immediately, often moving you to another level. With this larger scope comes increased efficiencies (see “greater economy of scale”), but the growth may also introduce new problems, such as management challenges, hiring difficulties, and retaining clients, as well as maintaining quality and providing great customer service. However, aside from these, the result of an acquisition is immediate growth in your top line, which when managed properly will trickle down to the bottom line. Greater Economy of Scale: An acquisition (unless it is quite small) will instantly give your answering service a greater scale and provide a corresponding boost to efficiency that goes along with it. For example, if the acquired answering service schedules two thousand hours of labor a month, once their accounts are integrated into your own, you may only need to increase your labor by a fraction of the amount, perhaps five hundred to one thousand hours. This is the beauty of the economy of scale in a call center or telephone answering service. And if an acquisition is quite small, you may be able to absorb the new traffic into your operation with only a small tweak to your labor schedule. If you are sufficiently large, your agents may not even know the difference. Tax Ramifications: Sales and marketing expenditures are recorded in your income statement (also known as a profit and loss, or P & L, statement) as business expenses, whereas an acquisition appears mostly in your balance sheet as an asset to amortize. These have tax implications and play into your tax strategy. Consult with your CPA or tax advisor to learn more about the pros and cons of these considerations. Remove Competition: A side effect of making an acquisition is removing a competitor. If you acquire a local answering service, then you remove a local opponent. And though the answering service industry competes with all other answering services across the country, some businesses still prefer to hire a local answering service. Each time you acquire a local competitor, you automatically increase the chances of those locally minded businesses selecting you as their answering service. Grow via acquisition isn’t for everyone, but it might be right for your answering service. However, if you do pursue this strategy, don’t forget to also continue to grow organically through a sound sales and marketing approach.   Janet Livingston is the president of Call Center Sales Pro, a premier sales and marketing service provider for the call center and telephone answering service industry. Contact Janet at or 800-901-7706. Peter Lyle DeHaan  is a freelance writer from Southwest Michigan.