How to Start a VoIP Business

Thursday, March 14, 2013

How to Start a VoIP Business

Voice over Internet Protocol (VoIP) combines the traditional need for voice communication with the power of the Internet. VoIP providers convert analog audio signals from the transmitter's microphone into digital for delivery to a recipient's speakers. AOL, Vonage and Skype have dominated the VoIP industry since the beginning. New entrants into VoIP may be attracted to the industry's low overhead costs but they will struggle without a clear idea of how to generate revenue. Your VoIP business needs to offer lower prices while using multiple revenue sources to compete with the industry's heavy hitters.

Instructions:

Become a VoIP Provider

Establish your rates, start up costs and brand building ideas in your VoIP business plan. Your plan should feature a balance sheet of costs and expenses for the first year as well as three- and five-year projections based on conservative revenue assumptions. Create sketches and outlines for marketing campaigns that show your vision for the VoIP Company’s future.

Sidestep the venture capital process by using loans, personal savings and small investments for your VoIP business. Venture capitalists will likely overlook your VoIP business if your potential profit is too low. Your VoIP Company should borrow enough money for market research, software and IT help through commercial banks and personal savings accounts.

Register your VoIP business with the appropriate state agency (e.g., Missouri's Public Service Commission). Your VoIP application will need to address technical issues like website bandwidth as well as adherence to 911 service standards set by the Federal Communications Commission (FCC). State agencies and the FCC require VoIP businesses to connect 911 calls to police dispatches, hospitals and fire stations in case of emergencies.

Outsource your VoIP software development to a wholesaler like VoIP Innovations. VoIP Innovations and other wholesalers provide local numbers, technical assistance and billing tools for service providers. While you have little control over the VoIP software from a wholesaler, you can focus your attention on advertising and customer service by avoiding technical implementation.

Solicit a market research report from a telecommunications firm like Insight Research to understand your competition. Request pricing, market share and existing capital for competitors like Ribbit and Vonage to understand the VoIP industry.

Recruit a handful of young IT professionals to oversee software testing, new customer tutorials and website development. You can hire help desk worker and developers for your VoIP business temporarily if your VoIP wholesaler handles technical support.

Work with your web designer and IT staff to complete a checklist of features for your VoIP Company’s website. Your website should have sufficient bandwidth to handle audio and video conversations without slowing down or cutting out. A quality VoIP website will feature an instructional tutorial, forum and account-management area for subscribers.

Finalize your pricing guidelines before starting your VoIP business to get a better sense of your first month's revenues. Offer monthly and call-by-call subscription rates to your customers to meet a range of calling needs.

Conduct an online advertising blitz for your VoIP business before accepting any subscriptions. Generate a one sentence description of your VoIP business that can be used in pay-per-click (PPC) descriptions and banner ads. Offer discounted subscription rates to your first 50 to 100 members if they refer friends and family to your website.

Tips and Warnings

Acquire headsets, speakers, microphones and other supplies from electronics wholesalers to offer additional products to your customers. Create a comprehensive start up package with headset, software CD and instruction booklet offered at a discounted price to attract new customers.
Eliminate bugs in your VoIP software, website and customer-service system with multiple rounds of testing. Ask your IT staff to oversee alpha and beta tests of your VoIP technology with a handful of select users before going public. If your VoIP system leads to frequent disconnects and poor reception, you will not be able to gather enough subscribers to survive the first year.

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1 comment:

VoIP BusinessDecember 11, 2013 at 6:21 PM
Become a VoIP Provider, How to Start a VoIP Business, Voice over Internet Protocol(VoIP), VoIP Business, VoIP business plan
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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Thursday, March 14, 2013