Business Overview


Call centers are often outsourced by smaller businesses to meet their customer service needs without setting up a new department. Agents must be highly adaptable because call centers may handle multiple companies simultaneously. Call centers can either charge per call or per hour, which ‘bakes in’ the price of all overhead (wages, rents, equipment, etc.)

Who is this business right for?

Those hoping to own and maintain a call center will need to understand the subtle art of customer service, upselling, and straight sales. As more of our communication becomes automated, it’s the human touch that will stand out. However, because call centers are easily outsourced to other countries with much lower wages, there will be a need to balance the rates of each call. Owners must be business savvy and no stranger to networking.

What happens during a typical day at a call center?

At first, owners will likely be heavily focused on advertising and finding new clientele. There will be a decent amount of cold calling and networking. As clients build up, owners will be able to focus more on ensuring clients are happy, hiring the right managers and agents, and looking for cost-effective ways to hit goals.

  • Find and maintain an inexpensive space
  • Buy all relevant equipment
  • Write scripts for agents
  • Handle client complaints
  • Listen to calls for quality assurance
  • Create schedules for employees
  • Determine what markets to target next
  • Stay ahead of emerging technology

What is the target market?

Call centers are looking for companies who don’t have the resources to start a call center on their own. Between equipment costs, hiring employees, and managing high call volumes, most companies aren’t prepared to run a call center the way it needs to be run. Their needs are best left to a company that specializes in providing high-quality service that will boost their revenue and retain their customers.

How does a call center make money?

Call centers need to determine whether to charge per staff hour or per call. Because call times can be erratic, it may be best to structure it per staff hour. A call center company may take the wage of their workers, and multiply that number by four to estimate the cost of equipment, lease payments, etc. Typically, international companies may charge $.35 per call or $8 per staff hour, while US companies may charge closer to $1 per call or $25 per staff hour.

What is the growth potential for a call center?

Call centers have the potential for unlimited growth when they provide valuable service to customers. Call centers may choose one particular niche of the market (such as high-end shoe sales), or they may open themselves up to something more general, like healthcare marketing. A call center business must establish their name as the go-to source for educated agents who can handle tough questions and situations.

Getting Started


What are some skills and experiences that will help you build a successful call center?

The biggest skill an owner requires is the ability to foresee their clients’ needs before they realize they have them. Owners will need to have some experience in sales and advertising to get more eyes on the call center’s services.

Owners need to be upbeat and enthusiastic even when under pressure, and quick on their feet to put out fires throughout the day. They should also be interested in new technology that comes out in the market, and open to integrating new services (meeting software, video technology, etc.) into their platform if it will improve customer experience.

What are the costs involved in opening a call center?

The cost of opening a call center can be quite high, and 33 states also require a license to open one. Licenses may be free in one state, and several thousand dollars in another, so be sure to check with your state. Lease agreements may be as high as $12 per square foot, and workstations can cost up to $1,250 each to update with the right furniture, cables, and equipment. Annual costs for taxes and utilities will likely be around $6 per square foot. The good news is there are hundreds of abandoned call centers throughout the US, and they typically come with (sometimes heavy) discounts for new start-ups. You can often use the equipment that’s left behind too.

Alternately, you may want to convert a standard retail space, which will save up to half on rent. However, it will cost you more to equip (up to $2,000 per workstation). Generators can also cost up to $200,000 if your building doesn’t come with one. Average wages for call center employees are around $9-12 an hour, but you may want to consider investing more, as the quality of the workers will reflect heavily on your company and on the image of your clients. Labor will likely be about 80% of your budget.

What are the steps to start a call center?

Once you're ready to start your call center, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:

  1. Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
  2. Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your call center is sued.
  3. Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
  4. Open a business bank account. A dedicated checking account for your call center keeps your finances organized and makes your business appear more professional to your customers.
  5. Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
  6. Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
  7. Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
  8. Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
  9. Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Select your state below for an in-depth guide on completing each of these steps in your home state.

Where can I find a business mentor?

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Recommended: Fizzle.co offers video courses and a supportive online community of like-minded entrepreneurs. Try one month membership for for free.

What are some insider tips for jump starting a call center?

Owners should already have some ties to the industry they’re hoping to break into, as networking will be crucial to the business’ success. Many call centers fail because they’re venturing into a saturated market. There will likely be a lot of slammed doors at first, so having a strong sales mentality is really necessary to survive.

You may want to offer potential clients the chance to see what your agents can do by staging fake calls. Give your best agent a day to learn more about a particular company, and then let the owner pretend to be a general consumer who has some fairly difficult questions. This is no doubt time-consuming for everyone, but the payoff can be worth it.

Finally, choose software that is fluid in case you decide to offer further services. Your programs should aid in general tasks, like note-taking and call-making, but also be customized to do everything from general sales to highly specific surveys.

Growing Your Business


How to promote & market a call center

Make contacts in the circles where your clients are likely to be, and establish trust and continuity there. Call centers operate on their efficacy, and many call centers fail because they can’t establish themselves quickly enough.

Owners should focus on what makes their call center different. If a call center is more about pushing contracts in clients’ faces than it is about showing off their assets, then they’re much more likely to go under.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

The best way to attract new clients is to increase either sales or your customer satisfaction levels. When talking to potential clients, use real-world examples when speaking of your accomplishments. You can even let new clients listen to previous calls, to see how agents handle complex situations without relying on transferring the call to the manager.

How and when to build a team

The best way to attract new clients is to increase either sales or your customer satisfaction levels. When talking to potential clients, use real-world examples when speaking of your accomplishments. You can even let new clients listen to previous calls, to see how agents handle complex situations without relying on transferring the call to the manager.

In short, no one can run a call center alone. Your strength as a company will rely largely on the quality of your team.

Read our call center hiring guide to learn about the different roles a call center typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Legal Considerations


State & Local Business Licensing Requirements

33 states require a special license to operate a telemarketing / call company. To find out more about licensing requirements in your state, check out the Telemarketing Laws page from sba.gov.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, check out our informative guide, Sales Tax for Small Businesses.

In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:

Service Agreement

Call center businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your call center business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

Certificate of Occupancy

Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a location:
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a call center.
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
  • If you plan to purchase or build a location:
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for you business’ location to ensure your call center will be in compliance and able to obtain a CO.

Reduce Personal Liability

Structuring your business as a limited liability company (LLC) ensures your personal assets are protected in the event your business is sued.

What is an LLC?

Form an LLC in 5 easy steps

Earning Potential


How much can you charge customers?

It depends on the type of industry you’re targeting. General customer support for a clothing company will require a very different skill set than selling high-end equipment to orthodontists. You can charge more for highly specialized labor, and you can justify your rates if your company is effective. Do not necessarily look to undercut your competitors if it means sacrificing on quality.

What are the ongoing expenses for a call center?

Much of your spending will be done at the beginning, but you should keep the following costs in mind:

  • Employee salaries
  • General office supplies (including equipment replacement)
  • Utilities and building fees
  • Travel costs to persuade new clients
  • Upgrading equipment (e.g., VoIP technology, etc.)

How much profit can a call center make?

According to firstresearch.com, US call centers bring in a total of approximately $21 billion annually, with an average revenue of $4 million.

This exact numbers are based on the margins of the contracts you bring in, but typically you can expect to start building profit after you’ve secured several major clients. Remember that this is a competitive industry, and you will need to be able to offer something special in order to gain a competitive edge.

How can you make your business more profitable?

Adding more services is the best way to bring in profit. Consider selling further services to clients, such as video, targeted campaigns or additional support calls.

Next Steps

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