How to Start a Home-Based Answering Service

by Nancy Wagner; Updated September 26, 2017
Shot in the UK, woman wearing headset, profile

Answering service businesses appeal to small- and medium-sized companies that need someone to take calls when they can’t answer the phone themselves. Since you’re setting up your business as a home-based answering service, you eliminate costly expenses such as leasing an office and paying utilities, putting more profit in your pocket. As long as you offer a friendly voice on the phone and can give messages to your clients, you’re on your way to having your own answering service business.

Items you will need

  • Computer
  • Telephone system
  • Message pad
  • Email account
  • Internet access
Step 1

Obtain a business license from your state. Even though you’re operating a home business, you’ll still need to get a license and pay any city, county and state taxes required in your area.

Step 2

Decide on the services you want to offer, including answering calls and forwarding messages. You might also want to offer e-mail answering services and receiving faxes as part of your offerings.

Step 3

Determine the hours you’re willing to answer phones for your clients -- to meet your client’s needs for night and weekend answering services, you may find it necessary to stay open 24 hours per day. Hire employees willing to come to your home if you plan to offer answering services beyond the typical 8:00 a.m. to 8:00 p.m. hours.

Step 4

Set your rates based on the types of services you provide. According to Entrepreneur, answering services provided during non-business hours start at about $200 per month.

Step 5

Buy a multi-line phone system so you can set up individual lines for each client. To decide how many lines you must start with, figure out how much money you need to make per month to pay for expenses, equipment, the telephone bill, employees and your salary.

Step 6

Promote your business by sending direct mail letters, postcards or flyers to medical and dental offices, real estate agencies and businesses that don’t have enough staff to man their own phones. Point out the benefit of hiring your service since their clients and prospects are more likely to leave a message if they reach a live person rather than a machine. Mention your willingness to answer basic questions about their products and services. If you’re willing to send e-mails or text messages to clients, make a note of this in your advertising and discussions with potential clients.

Step 7

Establish a bookkeeping system that allows you to bill your clients each month while helping you figure the amount to pay for federal estimated taxes. If you hire employees, you also need to withhold federal, Social Security and Medicare taxes, and pay these amounts to the government.

Tips

  • Spend time networking at chamber of commerce events to meet prospects that need answering services. Hand out business cards to those that seem interested for themselves or someone they know.

Warnings

  • Don’t wait to consider expansion options until you get busy and need more lines. Setting up lines and equipment can get expensive if you have to move everything to a larger space, so plan ahead to save money.

About the Author

Nancy Wagner is a marketing strategist and speaker who started writing in 1998. She writes business plans for startups and established companies and teaches marketing and promotional tactics at local workshops. Wagner's business and marketing articles have appeared in "Home Business Journal," "Nation’s Business," "Emerging Business" and "The Mortgage Press," among others. She holds a B.S. from Eastern Illinois University.

Photo Credits

  • Polka Dot RF/Polka Dot/Getty Images