By Marteann Bertrand
Answering services are a hot commodity in today’s market. Rarely, if ever, in the past has there been so much interest from investors outside our industry looking to jump on our bandwagon. A motivated seller can make an excellent deal if their numbers look good to one of these investors. But “good numbers” are not the only things investors are looking for when analyzing a purchase. Taking the time (and sometimes spending the money) to do an internal audit of your organizational effectiveness can make the difference between a great deal, and one that is only fair.
Investors are looking for profitability, of course. The next big issue an investor is going to question is whether or not a company has sound management and is operating as efficiently as possible. It is possible to conduct your internal audit yourself, or another option is to hire an outside consulting firm to do the audit for you. A “clean bill of health” on organizational effectiveness certified by a consultant’s report can be a great sales tool. The following areas of your company are what a consulting firm (and your potential buyer) will look at:
Management and Supervision: Do you have a strong manager in place, or a potential candidate, who will be prepared to manage the company after you are gone? Do you have well-trained supervisors who are scheduled on every shift (evening and weekend supervision is crucial)?
Training Practices: Are your training techniques documented and do you have well-trained trainers? How long does training take? Are you comfortable that your training is effective? Do you have good error tracking and remedial training processes? Do you conduct service observation regularly?
Employment Policies: Do you have an employee handbook, job descriptions, performance reviews, and fairly administered and well-documented disciplinary processes? What is your history of unemployment and/or worker’s compensation claims? Does your company carry errors and omissions insurance and/or employee practices insurance? Do your employees sign a confidentiality statement?
Turnover: Is your staff fairly stable or do you have the proverbial “revolving door syndrome?” What is the labor market like in your area, and have you developed recruiting techniques to overcome the tight market caused by low unemployment rates?
Scheduling: What is your labor-to-revenue ratio, and what control mechanisms do you have on your scheduling to ensure optimal labor efficiency? Does your system produce good call traffic reports?
Customer Service: Do you have systems in place to document, fix and follow-up on customer concerns? How quickly do you respond to changes in your customers’ businesses, and do you document these changes?
Account Maintenance: Are your accounts programmed in a standard format? Are they clear, readable, understandable, and do they contain all necessary information for proper call handling? How often do you survey your customers to update accounts? Do you effectively utilize all of your system’s capabilities for efficient call distribution and handling? Who programs your accounts and is that person properly trained?
Backup Power and Disaster Recovery Processes: Do you have a backup power supply? How often is it checked and how long will it last? Are you Y2K compliant? What are your disaster recovery processes? What would you do if you lost power for an extended period of time? Who handles your technical matters? If you are the technician for your business, who will take care of this in your absence?
Marketing: Do you do pro-active sales and marketing, or are the Yellow Pages your “sales force”? Who answers your in-bound sales calls and how knowledgeable is that person? If you are the salesperson for your business, who will do sales in your absence? What kind, and what quality, of presentation materials do you have in place?
Rate structures: Do you know the profitability of each of your accounts? How do you monitor profitability and how often do you make rate adjustments? Where do your rates stack up against your competition?
Collections: What is the state of your accounts receivable? Who does collections and how do you monitor them? If you are the collections manager for your business, who w ill do this job in your absence?
If you can fully evaluate all of these areas and give your company an “A” in every category, then you are ready to sell! Better yet is to have an outside source conduct an in-depth analysis to confirm that you deserve an “A”. If your own evaluation, or your outside source discovers shortcomings in your organizational effectiveness, you may want to contract with that resource to provide you with a detailed plan to overcome those challenges before you put your company on the market.
[From Connection Magazine – May 1999]