By Bill Power
Whatever your other reasons for becoming a telecom agent, making money is at the top of the list. The recurring, or residual, revenue it generates is attractive. How you build and maintain that revenue stream is dependent on a number of factors, including business model, sales ramp, sales volume and realization, commission rates, customer churn rates and errors.
A quick way to estimate how much gross revenue you will make as a telecom agent this year, over the next two years — even the next five years — is to use the Telecom Agency Cash Flow Calculator.
Ramp Period. Because the telecom agency business is based on recurring revenue it takes a while to build up a base, so it’s important to understand how long it takes to get paid on accounts (see chart: When Do You Get Paid?). Depending on the product sold, it can take 45 days or even more for an order to be accepted and provisioned. Billing takes place the first of the following month, usually for a partial month’s service. Some agent contracts are paid on billing, which would occur at the end of the billing month, so around 90 to 120 days after the sale. Other agent contracts are paid on receipt, which adds 30 days. In general, count on three to five months before the commissions begin to be paid. If you are new to selling telecom services, you should add two to three months to gear up (e.g., secure contracts, complete training, begin prospecting) before placing your first orders.