Have you ever wanted to start a BPO in the Philippines? The call centre industry in the Philippines has been on the rise for several years. In this process, numerous highly profitable corporations have emerged. Opening a call centre in the Philippines is not always the easiest, but with today’s full guide on how to start a small BPO, you will be in the best position to start.
Table of Contents
What Is A BPO?
BPO or business process outsourcing is a business service that enables other businesses to outsource their tasks. Businesses choose to do this because finding the relevant staff and training them can also be time-consuming.
Contracting a task to a third-party company could also be crucial for a company’s success in the competitive global market. According to Statista, back in 2013, the BPO industry’s global revenue was $27.7 billion. This could indicate the success of BPO over the years.
To put this more simply, BPO companies provide businesses the opportunity to focus on their strengths so that they can utilize time and effort well.
How To Start A call centre In The Philippines
Step 1: Build Your Business Plan
One of the first critical steps when looking to start a small BPO in the Philippines is to build your initial plan. This plan does not include detailed explanations or an in-depth analysis (this comes later). This is only a simple guideline detailing your new call centre.
This is because when you are wondering how to start a small BPO in the Philippines, many details will likely change as you gather more information about the market.
Step 2: Decide The Type Of Call Centre
The next stage on how to start a small BPO in the Philippines is deciding what type of call centre you wish to establish. Many different types of call centre business models are constructed across countries such as the Philippines and India. However, the most common models are remote call centres and fixed call centres.
Remote Call Centres
This type of BPO is great for entrepreneurs looking to lower their risks and reduce costs. This is achieved by working from remote locations such as a home.
This will indeed lower the overhead costs and save plenty of finances. There are many benefits to starting a remote call centre in the Philippines. As an example, you have access to a wide range of staff (potentially recruit staff anywhere in the country). Unfortunately, there are also disadvantages when it comes to starting a remote call centre.
The first disadvantage is that you will not physically see your staff, making certain operations and training difficult. The next disadvantage is that a remote call centre can sometimes give the appearance of an unprofessional business. In other words, some business owners want to know where the operations are conducted. Finally, some potential clients could see a remote call centre as high risk, especially concerning regulations such as the Data Protection Act.
Many call centres start their initial operations as a remote call centre in the Philippines and later grow.
Fixed Call Centre
A fixed call centre is the opposite of a remote call centre where all staff members and operations are conducted in one place. This is great for professional training and meetings, but it will cost more to start compared to a remote call centre.
If you are flexible on locations, choosing a city with a lower cost of living and lower rental prices will often be a wise move. For example, Cebu and Manila are the call centre hubs of the Philippines; however, office rental prices have increased considerably over the years. So now investors are starting to look further afield at cities such as Davao, Iloilo, etc.… to set up a call centre in the Philippines.
Step 3: Finalize Your Operations
This next stage is to finalize your operations. This is needed because the next steps after this step involve financial actions. Therefore, it’s very important to go over the figures and details that have been gathered so far.
Here are a few questions to ask yourself when setting up a call centre in the Philippines
- How Many Staff Will I Initially Need And How Much Is This Going To Cost?
- Where Will My BPO Be?
- What Is My Marketing Strategy?
- Do I Have Enough Funds To Last A Minimum Of Six Months?
- Is There A Way To Reduce Overheads Initially?
- Can I Trust The People Whom I’m Opening Up The Business With?
- What Are The Stages Of Registration For This Kind Of Business In The Philippines?
Addinditially, It’s also a wise move to seek legal assistance from an attorney. This is because a corporation often has certain rules and regulations to follow. Furthermore, there may be some financial benefits to opening up a call centre in the Philippines as this is in the outsourcing industry.
Step 4: Obtain A Location For You Call Centre
When looking at how to start a small BPO, one of the first things that we often think about is what the location will be the new call centre.
As mentioned above, certain cities have become more expensive as the years pass. Other cities, however, have remained relatively stable over the last few years. In other words, financially speaking, you may find an advantage of seeking a financially stable city. The drawback is that current prices do not determine future rental costs.
What about the call centre itself? If you are looking at how to start a BPO in the Philippines, then it is often a wise move to seek a smaller location. Nevertheless, buying or renting a larger complex has some benefits, including a room for training, interviewing, and meetings.
But in many cases, it makes financial sense to go with the reliable but cheaper option. When looking at locations, it’s best to look around as many deals may not be found on social media. Speaking to local agents and word of mouth is often the best way to find the best locations.
At this stage, when setting up a small BPO in the Philippines, you may wonder what things to look for in a new location. Setting up a call centre in the Philippines often needs to have a few basic requirements, which include
- Accessibility To Restrooms
- Accessibility To Convenience Stores Or Food
- Staff Room
There are a few other requirements that you could include in this list, but ultimately, it depends on you as an investor. For example, when I went to look around call centres for my own business many years ago, I found that the cheaper options tend to have less of the basic requirements above, but I was able to install these at my own cost, which meant overall a lower price per month.
In other words, you may need to decide if it’s more important to you to pay a higher price and get everything included or a lower price and add the options yourself (if possible).
Step 5: Find Your Staff
The next critical part when you’re wondering how to start a small call centre in the Philippines is to find reliable and trustworthy staff. Luckily the Philippines has a wealth of knowledgeable and talented individuals. Luckily the outsourcing industry in the Philippines has been growing year after year; therefore, many people also have valuable experience.
When an investor or business owner sets up an outsourcing centre in the Philippines, one of the forgotten areas for financial matters is often the staff costs. Therefore, it’s always important to calculate extra expenses that must be added to the business expense (e.g., The 13th month).
There are many different online recruitment websites. You can even get in touch with a local employment agency; however, in my experience, the quickest way to find staff is through social media.
Unfortunately, there have been scams around call centres. As a result, some employees have been scammed out of money, so it’s always important, to be honest, open, and trustworthy with your new staff to avoid confusion and unnecessary worry.
Step 6: Offer A Free Service (Optional)
Once you have set up your location and all relevant business operational decisions have been made, it’s now time to start offering your service and marketing to your potential clients.
We have recently published a full guide on how to attract new clients to your new BPO centre. Once you have attracted these clients, it’s often wise to offer a free trial or a free service for some time; this is especially true if you are a brand new call centre.
This business decision can often seem counterproductive as you will be losing money. However, this has been proven to give a high return often. Many companies adopt the same method of offering free services and trials. This is because psychology says we are more prone to purchase an item or service after being given a free product or service.
Offering a free service gives you the opportunity to test the market and your internal operational procedures as a business owner. This is a critical part when opening a call centre in the Philippines.
It’s always important to have a free service or free trial as part of your sales funnel. In other words, what are the aims of offering a free service? Are you looking to increase your testimonies, which will help promote your service to clients? Or are you looking to gain clients from providing the service? Having a clear goal will help you build the foundational steps of your sales funnel.
Step 7: Find The Low Hanging Fruit
Low hanging fruit is often referred to as a term meaning = go for the easier and more convenient option.
When we look at how to start a small BPO in The Philippines, we can see that we can offer lots of low-hanging fruit (clients). Many business owners make the mistake of pitching to corporations or businesses with 20 – 50 employees at the start. If a company has a size of 50 employees, then potentially they would be looking to outsource to a more experienced and well-known call centre rather than a recent startup.
However, many businesses are currently in operation worldwide, and some only have one or two employees. These are the clients small BPO in the Philippines should be going for initially. Often, a small call centre in the Philippines can pitch their service and stand a much higher chance of success than pitching to a large corporation.
LinkedIn, YouTube & outreaching are often great for communication with these clients. It is important to note that finding low-hanging fruit will usually require only one or two staff members. However, if you are a brand new call centre in the Philippines, this method is a great start.
Step 8: Build Your Business Network In The Philippines
At this stage, on how to start a small BPO in the Philippines, you will have your staff, location, and a few clients under your belt. The next step is to build your network and branch out to potential clients.
The call centre industry in the Philippines can be fierce. Call centers are in competition with each other and competition with call centres from different countries such as India.
Therefore networking is key in building clients and improving the growth of your business. In many cases, the easiest and quickest way to build a connection is through online communication.
I discovered on my journey to start a call centre in the Philippines that it often takes clients many weeks and months to make a final decision on whether or not they require your service.
Therefore in the early days, you may have a considerable amount of time to invest in areas such as networking. Speaking of investment, entrepreneurs often advise reinvesting their profits in areas such as networking. This aims to help grow your business to the next level. Reinvestment is essential when you are looking to grow, which leads us to our last step.
Step 9: Monitor & Grow
At this stage, you can congratulate yourself on growing a successful business. However, when we look at how to open a call centre, we can see that an entrepreneur needs to wear many different hats.
The last step is to step back from your current position and allow your business to grow, which often means delegating important tasks and decisions to senior management.
From research, I’ve noticed that the call centres that are successful and reach a period of growth focus on a specific niche or particular industry. This is because their brand and business started to get noticed in the industry as the leading outsourcing centres for that niche.
At this stage, growth is not always the easiest thing to do, but it is achievable. Many companies worldwide are looking to outsource to the Philippines, which gives business owners a wealth of potential clients.
When you are in a period of growth, it’s always important to strengthen what is strong and not just what is weak. In other words, if there is a type of project or something you are well known for and specialized in, then this should be celebrated and known to all your potential clients.
How Much Does It Cost To Open A call Centre In The Philippines?
Now that we have looked at how to set up a small BPO, you may wonder how much a call centre costs in the Philippines?
Starting a call centre in the Philippines can cost as much or as little as you wish within reason. It heavily depends upon the type of call centre, the staff, the industry, and the marketing.
Call centers have had a success story in which they started a call centre with only 15,000 or so pesos. This is often from one person on a computer, and later he/she builds a team, and finally officially establishes a location. However, entrepreneurs will need a considerable amount of money to start the call centre in many cases.
To open a call centre in the Philippines would cost around 500,000 – 800,000 pesos. This includes a low survival budget. However, if the costs can be kept down (e.g., remote workers, basic software -not recommended- & little to no survival budget), you could start a small call centre in the Philippines for as little as 100,000 – 200,000 pesos.
Bonus Tips To Start A BPO In The Philippines
- Check, double-check and triple-check the finances. When setting up a small BPO in the Philippines, there are often many added extras. Therefore, it’s incredibly valuable to have access to spare cash or a survival budget. If possible. A survival budget of six months would be sufficient.
- Work with the community. When I was in the process of setting up a call centre in the Philippines, I had a lot of support and guidance. Even call centre workers who work on the phones have knowledge about the internal process, which can be incredibly valuable.
- Start small. We have mentioned a few times the phrase “how to start a small BPO in the Philippines.” This is because it is recommended to start small as this kind of business can become very expensive. In some cases, this investment can take many months and even years to begin to see a profitable return. Starting small will speed up the process of cost-effective recovery.
Opening A BPO Philippines: Conclusion
Today we have looked at how to start a call centre in the Philippines. Each stage is very important, and a large amount of time should be spent considering the steps. It is also a good idea to discuss other options outside of these steps and discuss these with a third party.
The Philippines is one of the hottest countries right now for the call centre industry. When we look into 2025, 2030, and beyond, we can see that this is projected to continue. Many call centres across the Philippines have become very successful in this industry, which shows a large market for this type of business.
Nevertheless, it’s always important to analyze your financial situation and evaluate how best to build a small BPO in the Philippines.