How to start a telemarketing business
If you’re looking for a lean start-up idea with minimal setup costs, consider starting a telemarketing company. Find out more here
Have you ever received a telemarketing call and thought ‘I could do that’? If so, read on to discover the steps you need to take to make it happen.
Telemarketing is connecting businesses with potential customers via the phone. It can incorporate sales and marketing activity, as well as surveys.
It requires patience, persistence and the ability to talk with a range of people. Starting a telemarketing business is ideal for entrepreneurs looking to run a company that has lots of variety, where even two phone calls aren’t likely to be the same.
It may be worth considering seeing if you can get a Start Up Loan (external partner site, link opens in a new tab) to help you with financing, and mentoring to start this business idea. You'll also need to think about registering your business, either as a sole trader or as a company - if a company, then Smarta Formations (external partner site, link opens in a new tab) are an organisation that can help you set up.
1. Choose what type of telemarketing business to start
The first step you need to take is to choose the type of telemarketing business that you’re going to start. While you may think that all companies in this field work in the same way, there are a few key differences you should understand.
Below, we’ve broken down some of the key terms and offer guidance on choosing the sector that’s right for you and your business.
What is the difference between B2B and B2C?
These two terms are used frequently when describing businesses, and knowing what they mean and how they differ is crucial. This is applicable if you want to know how to start a telemarketing business, as well as across other business types too.
Business-to-business (B2B) – calling businesses to promote products or services. For example, IT telemarketing services would require calling relevant IT businesses about hardware or software requirements.
Business-to-consumer (B2C) – calling individuals to promote products or services. For example, conducting telemarketing research through phone surveys to gather information about consumer opinions and trends.
Understanding the difference between these two types of telemarketing will help you to define your target audience.
Which sectors can you operate in?
There are a number of sectors that you can operate in. In addition to focusing on B2B or B2C markets, you can specify further and focus on certain sectors. For example, the charity, finance, insurance and pension sectors are all possible options.
If you do choose to specialise then really understanding who you’re speaking with becomes even more important. For example, a charity CEO looking to outsource their monthly donation campaigns and a homeowner searching for house insurance have completely different needs.
If you’re starting your business and have gained experienced in another profession, use your expertise to help guide your choice. Alternatively, if you have the required skill set but lack sector-specific knowledge, consider gaining some experience in the field you want to focus on.
In addition, use your fresh perspective to your advantage – look for opportunities and challenges and find creative ways your business can solve them. Whichever approach is relevant for you will equip you with an understanding of the sector you want to operate in, as well as key jargon, plus sector-wide trends and pain points.
Examples of sectors include:
- Mobile phone plans
If you speak multiple languages – or hire staff that can – then you could consider growing your business internationally.
Whichever sector you choose, be sure to research the demographics of the target audience you wish to focus on. This also means understanding who your competition is, and how you can set your business apart from it.
Once you’ve identified the market you wish to enter, you can focus on how you’ll find your target audience and build projections. To help you streamline these key points, it’s essential to compile a business plan that outlines these, including your business’ goals and forecasts too.
You can download a free business plan template here.
2. Consider running a telemarketing company from home
As a telemarketing business is a relatively lean start-up idea, you could consider running it from home. This is because it requires minimal set-up costs, especially in the beginning.
If you think about it, when you first start out, you’re likely to only require a phone, internet connection, a computer and a headset, so you don’t necessarily need to find an office.
Instead, if you have a quiet space in your home, this could be an ideal initial base for your telemarketing business.
How to start a telemarketing business from home
Making the transition from purely domestic space to part-time business location can be challenging, so consider the following points to help ease the process.
- Find a quiet space – you’ll need to be free from distractions, and importantly, have no background noise when you’re making calls, with somewhere appropriate to work from for sustained periods of time.
- Assess the internet connection – good signal strength is essential for any home-based business. This becomes even more prevalent if you choose a VoIP or cloud-based phone system that relies solely on the internet. It’s always a good idea to be based as close to the modem as possible.
- Select the right equipment – the phone system and headset will be necessary to run your business day-to-day. Additionally, a computer specifically for business use is essential for IT and data security, as well as to help you manage a work/life balance
- Review insurance requirements – protect your business and assets from damage and other potential threats with business contents insurance and other cover. Be sure to check that your chosen policy and provider covers home-based businesses specifically
- Check legislative responsibilities – businesses have a number of legal duties to abide by, and this often includes those that are run from homes too. For example, any rubbish created from your business activity needs to be disposed of as commercial waste.
What equipment and facilities does a home-based telemarketing business need?
Here is a handy guide to the essential equipment and facilities you’ll need to get your home-based telemarketing business up and running.
✅ Phone system
✅ Desk and chair
✅ Commercial waste binFacilities
✅ Quiet location
✅ Strong internet connection
✅ Insured contents
✅ Sufficient lighting
Some of the benefits of running your telemarketing business from home include:
- Flexibility – greater options to run your business part-time, or as a side hustle, which can be especially useful when you first begin and may want to test the market.
- Cost-saving – renting an office space is a considerable cost for many start-ups, so by removing this you’re immediately reducing your company’s overheads. This frees up much-needed cashflow that can be redirected to where it’s most needed.
- Wider network – as home-based businesses can be based wherever you live, this creates options to work remotely from anywhere in the world. Plus, as your business grows and your team expands, in time you may consider a virtual team. This removes distance and location as barriers to finding the best staff and customers to work for, and with, your business.
3. Research costs and equipment
While compared to some other start-up ideas, starting a telemarketing company has few initial outlays, it’s always necessary to research costs and equipment.
What type of telephone system will you need?
Whether you’re operating from home or from an office, one of your business’ key expenses will be the telephone system. Not only is it central to telemarketing, but you need a reliable system that can handle a varying range of call volumes.
While you may only need a single phone in the beginning, as your company grows and develops you’re going to need a system that can handle high call capacities.
While it’s possible to use an actual phone line connection (known as a landline), an electronic private branch exchange (PBX) is the more realistic option. This is because they connect digitally and offer improved call quality and usability.
VoIP telephone systems: what you need to know
- Uses the internet to connect phone calls
- The phone calls are made and received as data
- Minimises costs as only requires the internet to make calls
- Sound-only or option for video calls
- A hosting platform is necessary to store the data on the cloud
Be sure to pick a system that can be tailored to your business needs, both at the outset and in the future too.
In addition to your telephone system, other equipment you’ll need includes:
- Headsets – as you’ll be spending the majority of the day on the phone, you’ll need to be able to make and answers calls quickly, as well as being able to type at the same time.
- Desks and chairs – an appropriate work station, including a desk and chair that can be altered to meet your ergonomic needs (optimised for comfort and well-being), are essential, especially as you’re likely to spend long periods of time seated.
You can find more information on headsets in our how to start a call centre guide.
What other costs do you need to factor in?
- Internet connection – as your phone signal strength will be central to your business, ensuring it’s a reliable one is crucial. Be sure to check the required speeds for maintaining your chosen system, as well as consider your location for connectivity issues and select the best broadband provider you can.
- Call script – the way you conduct your calls will impact your business, both its reputation and its finances. Knowing how to connect and engage with potential customers is vital. Consider a training course that teaches you what you need to know, or hire a professional to create a script for you.
4. Identify potential revenue models
Once you’ve found your niche, decided on a location and assessed the potential costs, your next concern is likely to be how to make your business a viable source of income.
As a telemarketing business, there are several ways you can make money. These include:
- Appointment setting – in this model, your company works to set up appointments for sales’ teams to do product demonstrations and in-person pitches to prospective clients. Often, businesses will use outsourced appointment setting companies to maximise the amount of time their salespeople have for meeting clients.
- Lead generation – with this option, your business is employed to do the initial stage of the sales process: that is, finding customers who are looking to buy. This means finding potential customers and connecting them with the suppliers who can fulfil their purchasing requirements.
Whichever revenue model you choose, it’s also useful to know about the type of leads (customers) you’ll be receiving. Usually categorised into either warm or cold leads, this phrasing simply refers to whether the customers have shown interest in being contacted or not.
Generally, appointment setting leads will be warm. If they’re interested in receiving a product demo or pitch from a member of a sales team, they’re likely to be relatively interested in hearing back to organise a time slot. With the sales team set to do the majority of the pitch in-person, your time spent on the phone is likely to be minimal.
Alternatively, lead generation encompasses a whole range of customers, all with different intentions and likelihoods to buy. Some may be cold leads, whereas others might be warm. This can mean a varying amount of time on the phone, with the potential for longer calls to explain products/services and processes.
Remember that your telemarketing business benefits your customers in multiple ways, such as:
- Increased sales – with more available time and ready-to-buy customers, the sales teams you work with have a greater chance of closing more deals
- Wider customer base – your company serves to create a bigger network for your customers to get potential new business from
5. Find customers
Just like any other business, telemarketing requires you to promote your company’s services. Here’s how you can dial in to your potential customer base.
There are a variety of ways to market and advertise your business, many of which are affordable options. Examples include:
Whether you use a free website builder or decide to hire a professional designer, having an online presence is non-negotiable. At a minimum, it should contain your business’ contact information, as well as an ‘about us’ section.
As your business develops, consider adding a blog to position your business as a useful resource within your sector, or even a live chat feature to help secure additional sales too.
Share, tweet or like content to engage with your sector, as well as help to generate interest in your company too. Although there are many social media platforms out there, you can focus in on the ones most relevant to your business.
Research which social networks your competitors are on and ensure you’re there too so that you can compete for the same customers. Social media is an accessible, affordable way to instantly engage with your target audience.
Try connecting with potential customers in the way that best represents your business. Telemarketing is a phone-based business, therefore, get on the phone and reach out via this medium too.
Plus, it can be easy to get lost in a sea of emails, but a personalised call is more memorable. Think about your own inbox – how many emails do you have left unanswered? Compare this to how many phone calls you receive a day – what stands out?
Offer a trial
If your business model and cashflow allows, consider offering potential customers a trial period. A ‘try before you buy’ system enables you to show clients what your business can actually do, and with a proven record behind you, others may be more likely to buy in too.
Similarly, a trial works for your business too. Initially, if you want to test out a large-scale contract or are unsure of the long-term longevity of a potential customer, a set trial period gives you that option. Over time, you may wish to expand your business offering or diversify into other streams (for example, a B2B company that incorporates B2C too).
In the beginning, keep it simple – tell as many people as possible about your new business. This means going to networking events, attending trade fairs, as well as perfecting your ‘elevator pitch’ – you never know when you may find yourself in front of a potential customer.
As your business develops and your network expands, ensure to keep your industry knowledge up-to-date and utilise contacts. The classmate from a training course, the presenter from a business seminar; even the deciding manager for a contract you didn’t get are all people who could help you find your next big win.
What are the next steps?
From our guide, you’ve learned about the essential steps to starting a telemarketing company, including which costs and equipment you need to budget for. Don’t put it on hold – now’s the time to get going and start your business!