Long Distance Peddlers No More

Posted: 03/1999

Long Distance Peddlers No More
–Part One
By Kieren McCobb

As a consultant, among the most frequent queries I receive are about starting or
running a long distance agency. The better question would be how to operate a
"network services" agency. No doubt you have heard that the very survival of
traditional long distance sales agents hinges on the incorporation of local and data
services into the product mix. Agents must be network services providers, not peddlers of
long distance. So, how does one start and operate an agency with the required focus on
network services? This month’s column will focus on preparation and planning; next month
we will look at the actual operation of the network services agency.

Only Fools Rush In

Before you open your doors or print up business cards, there is much to be done. An
argument can be made that if this stage is skipped or short-stopped in the eagerness to
get started, you have dramatically increased your chances of failing. Certainly you help
yourself and your odds of success if you lay out a plan to follow, and for safe measure, a
backup plan if things take longer than projected or don’t quite work out. Here is a list
of some of the things to consider in preparation for launching your venture.

Why this industry? And why this part of the telecommunications industry?
Certainly telecom has more sex appeal than, say, milk-crate manufacturing. It is just a
business, though, and the same basics that make sense in any other business hold true

Ask yourself these questions: Do you have experience in the industry? Do you have
experience in this part of the industry? For example, having been in the interconnect side
of telecom certainly helps but doesn’t provide the specific knowledge you need for a
running start as a network services agent. Moreover, people with industry experience but
without network service experience are astonished to discover how much they had to learn
about the business.

What are your goals? What do you want to accomplish with this business? What
achievements do you want to look back on after each of the next five years? I suggest
three stages of goal-setting: short-term (six months), intermediate-term (18 months to 24
months) and long-term (about five years). As each timeline is reached it is a good idea to
review and "tweak" your goals and business plan.

What is your exit strategy? Do you want to go flat out for a certain amount of
years and sell out? Or do you want to build a business that grows each year and have a
plan for succession after you leave the business? It is important to know where you want
to end up before starting out.

What is your level of commitment? Part time or full time? Is your
spouse/significant other supportive and on board with you in this venture? How long can
you live on savings, severance or some other source of money before taking any salary from
the business? Is this going to be a hobby or a serious give-it-all-you’ve-got business?

Have you completed a business plan? A written business plan? Don’t get
into this or any other business without one. Some people detest sitting down and writing a
business plan. There is off-the-shelf software that does a great deal of it for you, but
with or without software, do it anyway.

Have you taken care of personal business? Have you resolved your personal and
financial matters before leaving your salaried job? It is extremely difficult to secure
credit (such as a mortgage or credit cards) or some types of insurance (such as
disability) when you are brand new in your own business. Typically lenders and insurance
companies want to see several years of tax returns/profitability before providing credit
or insurance. Obviously, this is impossible for a six-month-old company.

Have you spoken with and decided on a good accountant? You need to work with
someone who you respect and "click" with. There can be serious tax consequences
from even the most innocent mistake, so try and work with someone who can give
well-rounded business advice, not necessarily restricted to financial matters alone. A
good certified public accountant (CPA) can be invaluable as an all-around consultant for

Do you have a lawyer? Just as you need good financial and tax counsel, you also
need good legal counsel, so a sharp attorney is a must. Even before you begin any business
activities you should discuss your plans and business structure with an attorney
experienced in business matters. At the very least, you should seriously consider
incorporating your business as opposed to a sole proprietorship or partnership. When run
in good faith as a profit-oriented business, a corporation’s limited liability literally
can save you from financial ruin in today’s litigious society. Incorporation is
surprisingly inexpensive in its own right, not to mention when compared to losing
everything you own. Like any business, running a network services company involves some
investment. If you cannot afford to incorporate your company you should probably give
serious thought as to whether you can afford to start a business now, or save a little
more money first.

Office Basics

Most agencies begin their corporate life in one of two ways. The first is by working up
to going "full time." If you plan to start alone, perhaps with an office in your
home at first, ideally you have gradually built up your equipment and office necessities
and have your "office" in place. Alternatively, you have the resources,
financial and otherwise, to begin and equip your office all at once. Either way there are
certain things you will need. The following should cover the basics:

An up-to-date personal computer (PC) or laptop. You will need to type letters,
perform mathematical functions and store information. Fortunately, computer prices are
dropping, so a given amount of horsepower comes less expensively over time.

Printer. Laser printer prices have dropped so much that it is hard to justify
not having one on financial grounds. Although ink-jet quality has improved dramatically,
for top-quality letter output you can’t beat laser printers for professional appearance.
You may, however, wish to consider an ink-jet printer for color work and as a backup to
the laser. If you need to make a choice, get the laser first.

Fax machine. Plain paper fax machines are much less expensive from a supply
standpoint, and present a professional image.

Scanner. This can save you a huge amount of time compared to retyping a
document. A scanner also is invaluable when creating brochures and marketing material.

Telephone equipment. Combin-ation telephones/fax/answering machines are a false
economy. They don’t save a large amount of money and give an unprofessional image. In
fact, answering machines are the worst way to save six dollars a month for any
professional businessperson. Get voice mail from your local telephone company.

Telephone service. Again, don’t hurt your image to save a few dollars. A fax
machine should have its own line. Similarly, your business line should be a separate
business line and only answered by you or other people in your company. If your office is
in your home, don’t let your children answer the phone. Ideally, you have a business line
that hunts to a separate line, then to your local telephone company’s voice mail. Caller
ID is wonderful. It tells you who called but didn’t leave a message. If you are on another
line it can help you decide whether to terminate the call in progress and take the new

A good-quality speakerphone is the only kind of speakerphone to have. Bargain speaker
phones aggravate people. So does answering a call on a speakerphone. Etiquette dictates
answering a ringing call with the handset and securing the other party’s permission before
placing the call on speaker. Most phones have a conference button. Conferences set up
using this feature are hard to hear. Instead, your telephone company may offer three-way
calling, which alleviates the "volume drop" problem.

Modems. A separate modem line isn’t as critical from an image point of view, but
it is mighty convenient when talking with tech support.

These suggestions, based on experience and observation, are intended to shorten your
learning curve and improve your chances for success.

Kieren McCobb is president of TeleConfusion Removal Inc., a consulting firm serving
telecommunications agents. He also is president of AIB Communications Inc., an authorized
Bell Atlantic agent in the Northeast region. He can be reached by phone at +1 732 249 2821
and by e-mail at

Leave a comment

Your email address will not be published. Required fields are marked *

The ID is: 67997