My Experience Running a
Telephone Answering Service
From 1994 thru 2000 I used our own COMET software to run a
profitable answering service. It was an experience that taught me how to handle
billing on a large scale and how to handle dead-beat customers.
Crazy things happend in the earlier years of COMET. I once received a seize-and-desist order to stop selling the software from a company that received a patent for "automated voice mail" back in the 80's. They requested large sums of money for the rights to sell an automated voice mail system, even though we created it! When I brought to their attention that we were advertising our COMET Voice Mail in national trade magazines long before they applied for a patent on the concept, they immediately discontinued communicating and never bothered us again.
But the answering service business had its hassles. When customers didn't pay their bill, we would give them a 30-day grace period. But then we needed to cut them off. We would save their voice mail messages for 60 days in case they needed to hear them. But we would only restore the account if they paid the bill since a 30-day grace period had already been extended as a courtesy.
You'd be amazed how people would rather threaten a lawsuit over settling a $5 to $15 debt for service rendered. I never took these threats seriously; they were too silly to be real. Yes it was cheap. For $5 a month we gave a local phone number that rang into their own voicemail with their own greeting that they can record. That's what our COMET software did.
We had over 1500 local phone numbers on one system with a concurrent backup in case of a computer crash. For an answering service, numbers cost only pennies per month to hold. COMET supported both T-1 and DID lines. You didn't need 10,000 phone lines because not everyone would receive calls simultaneously. The numbers would ring in on any available line and send a code to COMET telling it what mailbox to connect to. That was the magic how up to 10,000 phone numbers could be handled by one system.
Those were the days. We used to sell COMET to other answering services for $20,000 and up at the peak when automated attendant, voice mail software was hard to come by. And the truth of the matter as to why I started our own service was to have first hand knowledge of how well it worked. By using COMET ourselves, we were able to enhance the system as time went on. Building on our own discovered requirements for having a full featured system.
There were other hardships involved with running a public service. Once I received a subpoena from the Dept. of Transportation to appear in court for running an illegal furniture moving company. It turned out one of my voice mail customers was using the number and voice mail we were leasing to him for the purpose of running a moving company. The only thing is, he wasn't licensed. That case was dropped when they realized we were just the answering service.
The nastiest of it all was when I was subpoenaed to appear in court by a branch of our government to provide information on three of our voice mail customers. They were plotting to terminate a very important public figure.
It's not fun running an answering service. You never know what your clients are up to. I must say these cases are few and far between. Most customers are honest businessmen and women who are using a hosted voice mail service just to get started with their business at the lowest possible cost. Having a local phone number for $5 a month with unlimited inbound calls couldn't be beat at that time.
Of course today we have hosted services that provide much more for less cost. But that's because the cost of telephony has been going down over the years due to the improved technology.
I finally sold the answering service in February of 2000 to a service bureau in New York City who had been using several of our COMET systems. The physical transfer was literally done by arranging with the phone company to have the lines terminate at their premises as well as at our office, both at the same time. So then we were able to shut down the computer and rush it from our offcie to their office, connect it to the phone lines there and power it back up. The entire down time was not much more than an hour. And it was done at night and after prior notification weeks in advance. The move went without a hitch and the customers were back on line before break of day.
I got paid well for that sale. Answering services are usually sold for the value of what can be made in the following six months based on the number of paying customers.
Glenn Stok, President of Stok Software, Inc. (STOK.COM)