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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