Table of Content

    Do you want to start call center business?

    Are you thinking of opening a call center? There is no doubt this is a great business venture with immense potential. In the recent years, the telemarketing industry has been experiencing a steady growth of between 6.5% and 8% per annum. The quest for organizations to improve their customer service in order to outshine their competitors has compelled many firms to outsource their telemarketing to experts. This is a cost effective approach compared to investing in an in-house call center. To succeed, a number of issues have to be taken care of but you can be assured to recover your capital within the first three years.

    Executive Summary

    2.1 The Business

    The call center will be registered under the name ListeningU, and will be situated in downtown Brentwood, Los Angeles- California. The call center will be owned and managed by Adam Bruno who is an expert customer service professional.

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    2.2 Management Team

    Adam Bruno is a Customer Service professional who has worked in the customer care industry for more than a decade. Before planning how to create a call center, Adam worked for many top business companies across the United States and is an accomplished customer service expert.

    2.3 Customer Focus

    ListeningU intends to offer clients a one stop, modern and fully equipped call center with the latest telemarketing technologies to serve the Los Angeles business community.

    2.4 Business Target

    ListeningU intends to offer both inbound and outbound call center business strategy services to a wide range of clientele keen on outsourcing their call center services.

    Call Center Business Plan - 3 Years Profit Forecast

    Company Summary

    3.1 Company Owner

    Adam Bruno is a customer care professional who has worked with renowned U.S brands that include JPMorgan Chase, Goldman Sachs, Wells Fargo and Citigroup. In the course of his career, he ascended to the position of a Customer Service Manager and took the lead role in structuring call center operations and overseeing all management related aspects.

    3.2 Aim of Starting the Business

    After having been in the career for long, Adams noticed that companies were spending a lot of time and resources to manage in-house call centers. In order to help businesses focus on their core operations, Bruno found it necessary to start a call center business to handle telemarketing services on behalf of clients.

    3.3 How the Business will be Started

    As a customer service expert, Adams understands what he needs to start the call center. To set his idea into motion, he has worked closely with business set-up experts to develop a financial roadmap for the call center. The following is financial data for ListeningU Call Center.

    Call Center Business Plan - Startup cost

    Start-up Expenses  
    Legal $4,000
    Consultants $3,000
    Insurance $15,000
    Rent $20,000
    Research and Development $8,000
    Expensed Equipment $22,000
    Signs $3,000
    TOTAL START-UP EXPENSES $75,000
    Start-up Assets $0
    Cash Required $80,000
    Start-up Inventory $25,000
    Other Current Assets $30,000
    Long-term Assets $8,000
    TOTAL ASSETS $25,000
    Total Requirements $20,000
    START-UP FUNDING $0
    START-UP FUNDING $100,000
    Start-up Expenses to Fund $30,000
    Start-up Assets to Fund $32,000
    TOTAL FUNDING REQUIRED $0
    Assets $20,000
    Non-cash Assets from Start-up $15,000
    Cash Requirements from Start-up $0
    Additional Cash Raised $60,000
    Cash Balance on Starting Date $20,000
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $20,000
    Investor 2 $15,000
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $120,000
    Loss at Start-up (Start-up Expenses) $55,000
    TOTAL CAPITAL $60,000
    TOTAL CAPITAL AND LIABILITIES $40,000
    Total Funding $110,000

    Services for Customers

    ListeningU Call Center is focused on offering professional telemarketing services to different types of clients. When planning how to open a call center, the business is focused on offering the following services.

    • Offer customer service that includes handling inquiries on behalf of clients
    • Carry out Market research and surveys for clients
    • Provide first-level help desk support
    • Assist in business development by helping clients with lead generation, database management, debt collection and message services.

    Marketing Analysis for Call Center Business

    For ListeningU Call Center to meet its market obligations, a detailed market analysis was carried out to help the business establish itself in the industry and adequately serve the needs of clients. This call center business plan explains the strategy the business will rely on to attain its goals. Given the rising demand for corporate call center services, there is a great opportunity for ListeningU to meet its market objectives.

    5.1 Market Segmentation

    Given the increasing popularity of the call center industry, ListeningU understands the value of coming up with sustainable marketing strategies to acquire a larger market share. Being the second largest city in the United States, Los Angeles is a business hub with many corporates looking for quality call center services to support their business operations. Based on market findings, the call center intends to target the following potential customers.

    Call Center Business Plan - Market Segmentation

    5.1.1 Corporate Organizations

    Corporate organizations rely on an infrastructure that allows seamless communication to achieve various business objectives. For this reason, every corporate entity needs a robust and flexible call center service that has the capability to accommodate business needs. With high costs associated with setting up, running and maintaining call centers, businesses now prefer to outsource their needs to professional call center companies.

    The corporate sphere is large and ListeningU Call Center intends to target companies in various sectors such as banking, manufacturing, telecommunication and information technology among others. Organizations have to keep communicating with their clients, suppliers, business partners and other industry stakeholders. The call center business model will focus on reaching out directly to various corporate entities.

    5.1.2 Advertising and Marketing Agencies

    One of the main services offered by ListeningU is marketing and lead generation. Call centers play a major role in advertising and brand awareness which attracts marketing agencies intending to roll out advertising campaigns for various products and services. Thanks to investing in sophisticated and cutting edge technologies, the call center has invested in the appropriate infrastructure to support large scale advertising.

    5.1.3 Political Parties

    Political parties have been identified as a potential customer group to reach out to in this call center business plan sample. Political parties often conduct fundraising and campaigns which need a professional call center facility to handle all communication aspects on behalf of a client. Political parties always run elaborate campaigns in order to create awareness and outshine their competitors. For this reason, ListeningU Call Center stands a great chance to benefit from political parties.

    5.1.4 Religious Organizations

    With many religious organizations operating in Los Angeles, the demand for call centers is high as religious establishments are always in need to call centers to support various organization functions. Just like political parties, religious organizations engage in numerous fundraising and campaigns.

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Corporate Organization 35% 30,000 32,000 34,000 36,000 38,000 10.00%
    Advertising and Marketing Agencies 30% 25,000 27,000 29,000 31,000 33,000 9.00%
    Political Parties 20% 20,000 22,000 24,000 26,000 28,000 12.00%
    Religious Organizations 15% 15,000 17,000 19,000 21,000 23,000 11.00%
    Total 100% 90,000 98000                106,000 114,000 122,000 13.00%

    5.2 Business Target

    ListeningU Call Center is getting into a highly competitive environment considering there are numerous call centers in Los Angeles. However, this call center business plan template outlines the plan the business intends to use to acquire clients and propel business growth. It is costly to set up a fully functioning call center, but adequate strategies have been formulated to help the business fully recover its initial capital. After finalizing how to build a call center business and rolling out operations, the call center expects to recoup its initial investment in three years based on a projected 15-20% annual sales growth.

    5.3 Product Pricing

    While strategizing on how to start a call center business, Adam Bruno together with the assistance of experts has come up with a competitive pricing structure tailored for different services. At the beginning, the call center intends to offer various incentives to attract clients.

    Strategy

    When planning how to start a call center, you need to come up with a great business development strategy. Adam Bruno has engaged experts to formulate a call center strategy that will be instrumental to steer business growth. The following is ListeningU Call Center sales strategy.

    6.1 Competitive Analysis

    ListeningU has deployed the latest telemarketing technologies to boost efficiency and seamlessly handle multiple clients without compromising quality. After completing the procedures of how to build a call center, the business anticipates high competition considering there are numerous similar establishments in Brentwood.

    6.2 Sales Strategy

    For ListeningU to achieve its intended targets and create a call center which is popular with clients, the following sales strategy will be implemented.

    • Hire professional marketing agencies to help advertise the call center and teach out to corporate clients
    • Organize an official opening party and welcome top industry stakeholders to create awareness about the business
    • Do cold calling and email various potential customers to advertise call center services
    • Advertise on digital media platforms such as Facebook, Twitter and Instagram
    • Use local media channels such as Television and newspapers to advertise the business

    6.3 Sales Forecast

    ListeningU Call Center has put in place various sales strategies in order to meet its targets. The following is a forecast of sales for the business.

    Call Center Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Customer service services 500,000 520,000 540,000
    Market research and surveys 400,000 420,000 440,000
    Help desk support 300,000 320,000 340,000
    Business development services 200,000 220,000 240,000
    TOTAL UNIT SALES 1,400,000 1,480,000 1,560,000
    Unit Prices Year 1 Year 2 Year 3
    Customer service services $400.00 $410.00 $420.00
    Market research and surveys $300.00 $310.00 $320.00
    Help desk support $200.00 $210.00 $220.00
    Business development services $150.00 $160.00 $170.00
    Sales
    Customer service services $300,000 $310,000 $320,000
    Market research and surveys $250,000 $260,000 $270,000
    Help desk support $200,000 $210,000 $220,000
    Business development services $150,000 $160,000 $170,000
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Customer service services $5.00 $6.00 $7.00
    Market research and surveys $4.00 $5.00 $6.00
    Help desk support $3.00 $4.00 $5.00
    Business development services $2.00 $3.00 $4.00
    Direct Cost of Sales
    Customer service services $250,000 $260,000 $270,000
    Market research and surveys $200,000 $210,000 $220,000
    Help desk support $150,000 $160,000 $170,000
    Business development services $100,000 $110,000 $120,000
    Subtotal Direct Cost of Sales $700,000 $740,000 $780,000

    Personnel Plan

    ListeningU provides diverse services in order to boost the company’s income. When starting a call center business, it is vital to focus on having a good personnel team to handle business operations.

    7.1 Personnel Plan

    The call center is owned by Adam Bruno who will be the overall center manager for the business. The call center intends to hire the following staff to enable the business carry out its operations.

    • Call Center Manager
    • Operations Manager
    • Two Marketing Executives
    • Five Customer Service Representatives
    • Successful candidates will undergo intensive training to understand procedures and expectations.

    7.2 Average Staff Salaries

    ListeningU Call Center plans to pay its staff the following salaries in the first three years of operations.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Manager $50,000 $55,000 $60,000
    Cashier $30,000 $35,000 $40,000
    Administrator $28,000 $34,000 $38,000
    1 Sales and Marketing Executive $30,000 $35,000 $40,000
    5 Customer Care Representatives $90,000 $105,000 $120,000
    Cleaner $20,000 $25,000 $30,000
    Assitant Manager $40,000 $45,000 $50,000
    Total Salaries $288,000 $333,000 $378,000

    Financial Plan

    ListeningU Call Center has formulated a financial plan that will steer the path to business success. To start call center business, Adam will use his personal savings and funds from two investors. A loan will be sought to help raise startup capital for the business. Crucial financial information for the call center has been shown below.

    8.1 Important Assumptions

    Financial forecast for ListeningU Call Center will be based on the following assumptions.

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 12.00% 14.00%
    Long-term Interest Rate 5.00% 5.00% 5.00%
    Tax Rate 12.00% 14.00% 16.00%
    Other 0 0 0

    8.2 Brake-even Analysis

    ListeningU Brake-even Analysis is indicated in the graph below.

    Call Center Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 12000
    Monthly Revenue Break-even $350,000
    Assumptions:
    Average Per-Unit Revenue $200.00
    Average Per-Unit Variable Cost $2.00
    Estimated Monthly Fixed Cost $400,000

    8.3 Projected Profit and Loss

    Profit and Loss information for ListeningU calculated on a monthly and annual basis is shown below.

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $700,000 $730,000 $760,000
    Direct Cost of Sales $40,000 $60,000 $80,000
    Other $0 $0 $0
    TOTAL COST OF SALES $40,000 $60,000 $80,000
    Gross Margin $420,000 $460,000 $500,000
    Gross Margin % 75.00% 80.00% 85.00%
    Expenses
    Payroll $300,000 $320,000 $340,000
    Sales and Marketing and Other Expenses $5,000 $7,000 $9,000
    Depreciation $4,000 $6,000 $8,000
    Leased Equipment $0 $0 $0
    Utilities $6,000 $8,000 $10,000
    Insurance $2,000 $3,000 $4,000
    Rent $12,000 $14,000 $16,000
    Payroll Taxes $32,000 $36,000 $40,000
    Other $0 $0 $0
    Total Operating Expenses $230,000 $260,000 $290,000
    Profit Before Interest and Taxes $55,000 $65,000 $80,000
    EBITDA $10,000 $15,000 $20,000
    Interest Expense $0 $0 $0
    Taxes Incurred $15,000 $20,000 $25,000
    Net Profit $120,000 $130,000 $140,000
    Net Profit/Sales 20.00% 35.00% 50.00%

    8.3.1 Monthly Profit

    Call Center Business Plan - PROFIT MONTHLY

    8.3.2 Yearly Profit

    Call Center Business Plan - PROFIT YEARLY

    8.3.3 Monthly Gross Margin

    Call Center Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Yearly Gross Margin

    Below is the profit and Loss Analysis for ListeningU Call Center.

    Call Center Business Plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    Below is the profit and Loss Analysis for ListeningU Call Center.

    Call Center Business Plan - Projected Cash Flow

    The diagram below is a summary of subtotal cash spent, subtotal cash from operations, subtotal cash spent on operations, subtotal cash received and pro forma cash flow.

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $50,000 $55,000 $60,000
    Cash from Receivables $8,000 $10,000 $12,000
    SUBTOTAL CASH FROM OPERATIONS $58,000 $65,000 $72,000
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $58,000 $65,000 $72,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $20,000 $22,000 $24,000
    Bill Payments $15,000 $20,000 $25,000
    SUBTOTAL SPENT ON OPERATIONS $35,000 $42,000 $49,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,000 $45,000 $55,000
    Net Cash Flow $12,000 $15,000 $18,000
    Cash Balance $23,000 $28,000 $33,000

    8.5 Projected Balance Sheet

    The following is a Projected Balance Sheet for ListeningU Call Center that shows capital, assets, long term assets, liabilities and current liabilities.

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $280,000 $310,000 $340,000
    Accounts Receivable $20,000 $22,000 $25,000
    Inventory $5,000 $8,000 $11,000
    Other Current Assets $4,000 $8,000 $12,000
    TOTAL CURRENT ASSETS $309,000 $348,000 $388,000
    Long-term Assets
    Long-term Assets $8,000 $11,000 $14,000
    Accumulated Depreciation $12,000 $15,000 $18,000
    TOTAL LONG-TERM ASSETS $5,000 $3,000 $1,000
    TOTAL ASSETS $210,000 $270,000 $320,000
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $18,000 $21,000 $24,000
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $18,000 $21,000 $24,000
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $18,000 $21,000 $24,000
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $50,000 $55,000 $60,000
    Earnings $120,000 $130,000 $140,000
    TOTAL CAPITAL $218,000 $236,000 $254,000
    TOTAL LIABILITIES AND CAPITAL $200,000 $210,000 $230,000
    Net Worth $240,000 $270,000 $300,000

    8.6 Business Ratios

    ListeningU Call Center Business Ratios, Ratio Analysis and Business Net Worth are shown below.

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 10.00% 24.00% 60.00% 6.00%
    Percent of Total Assets
    Accounts Receivable 8.00% 6.00% 3.00% 14.00%
    Inventory 6.00% 4.10% 2.30% 15.00%
    Other Current Assets 5.00% 3.50% 2.00% 35.00%
    Total Current Assets 95.00% 105.00% 130.00% 60.00%
    Long-term Assets -6.00% -12.00% -18.00% 35.50%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 7.00% 5.00% 3.00% 30.00%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.00%
    Total Liabilities 7.20% 3.00% 4.40% 40.00%
    NET WORTH 90.00% 85.00% 120.00% 30.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 70.00% 72.00% 74.00% 0.00%
    Selling, General & Administrative Expenses 60.00% 75.00% 62.00% 50.00%
    Advertising Expenses 3.00% 2.00% 0.50% 5.00%
    Profit Before Interest and Taxes 22.00% 25.00% 28.40% 3.00%
    Main Ratios
    Current 16 20 24 2.6
    Quick 30 33 36 5.5
    Total Debt to Total Assets 6.00% 3.00% 2.40% 45.00%
    Pre-tax Return on Net Worth 90.00% 95.00% 100.00% 3.40%
    Pre-tax Return on Assets 45.00% 65.00% 55.00% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 12.00% 17.00% 22.00% N.A.
    Return on Equity 60.00% 64.00% 68.00% N.A.
    Activity Ratios
    Accounts Receivable Turnover 6 8 10 N.A.
    Collection Days 100 110 120 N.A.
    Inventory Turnover 20 23 25 N.A.
    Accounts Payable Turnover 15 18 21 N.A.
    Payment Days 23 23 23 N.A.
    Total Asset Turnover 3.4 2.4 1.2 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.08 -0.06 N.A.
    Current Liab. to Liab. 0 0 0 N.A.
    Liquidity Ratios
    Net Working Capital $300,000 $320,000 $340,000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 2.45 1.48 0.65 N.A.
    Current Debt/Total Assets 8% 6% 4% N.A.
    Acid Test 32 35 38 N.A.
    Sales/Net Worth 3.4 2.6 1.8 N.A.
    Dividend Payout 0 0 0 N.A.

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