Pursue Growth Through Acquisition

Pursue Growth Through Acquisition
Expand Your TAS by Acquiring Accounts Instead of through Sales and Marketing

When you think of the future of your telephone answering service, what will it look like? What strategy do you need to use to get there? There is no one right answer that works for everyone, but there might be one right answer that works for you.

Some answering services pursue a growth-through-sales-and-marketing strategy. For services that excel at this, it provides slow, controlled growth. However, not every TAS does well at sales and marketing. An alternate solution is growth through acquisition. Other answering services excel with this approach.

Here are some considerations:

Buy an Existing Answering Service

A common way to pursue growth through acquisition is to buy a complete answering service. It’s an existing operation that you leave in place with existing staff who continue to serve clients and run the business. All you need to change is administration and financial oversight.

Some TASs who pursue this strategy leaves the acquired service as a standalone operation for the long-term. Others leave it standalone for the short-term, gradually integrating it into one of their other existing operations. They may or may not keep the acquired location. Similarly, they may or may not retain key staff.

The third approach for buying an existing answering service is to immediately integrate it into an existing operation. Though this may seem like buying the client base only, it differs in that you acquire all the infrastructure and TAS systems, rendering them unavailable to entrepreneurial-minded and displaced employees who want to launch a competing service.

Buy the Client Base

Acquiring the customer list costs less than buying an entire answering service. This may be an ideal solution if you plan to integrate the operations and accounts into your existing service. This allows for better management, tighter controls, and more consistent service than running two separate services, as you would if you bought an entire answering service.

There are risks when pursuing this strategy, however. We’ve already alluded to them. What happens to the TAS system that will sit idle once you acquire the accounts? Some entrepreneurial-minded TAS manager—who is now unemployed—could easily open new answering service using that equipment. It’s already installed, and they know plenty of unemployed but otherwise qualified employees to work it. In addition, they know the client base you’ve just acquired. Assume they have the client list too. This has happened. Don’t let it happen to you.

Buy Niche Accounts

As we’ve already covered in “Pursue a Boutique or Niche Market Strategy for Your Telephone Answering Service,” one TAS strategy is to pursue niche markets. The largest and most common niche is healthcare: a medical answering service. Of course, many other niches also exist, limited only by imagination.

Whatever niche you pursue, you can grow it the usual way through a targeted sales and marketing program. Or you can seek to buy accounts from existing answering services that align with your niche.

By way of example, let’s assume you're pursuing the healthcare TAS niche. Look for another answering service that is mostly commercial and has few medical accounts. They may struggle to service those accounts or conclude they’re more bother than they’re worth. Regardless of how they feel about their medical accounts, for the right price they may jump at the chance to sell them to you.

The Next Step

If you feel a growth-through-acquisition strategy is right for you, the next step is to decide how to move forward. You can go through a business broker who specializes in answering service sales. They’ll offer you a wider selection and produce faster results. Though the seller pays the commission to the broker, be aware that the fee could inflate the purchase price.

The other method to move forward is to pursue acquisition targets through networking and by making subtle inquiries. This gives you fewer options and may take longer to find an acquisition target, but this may be the best way to get an ideal property for a fair price or a bargain property at a nice discount.

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