How can I tell if a call centre for sale is profitable?

Profit in a call centre is thin in a particular way. Wages are the largest cost, and they are paid whether or not the phones ring. A good month can follow a poor one without anything changing in the business. So a single year’s profit tells a buyer little. What helps is knowing which pieces move it, and asking the seller to show each one on paper.

Billable time and idle time

Ask for hours paid to agents next to hours billed to clients, by month. The gap is idle time, training and breaks. A centre that bills by the call carries more risk in a slow week than one that bills by the hour. Ask how the owner schedules staff against forecast volume, and who does it. That job may leave with the seller.

Attrition and rehiring

Every departure brings advertising, interviews and paid training that no client is billed for, before a new agent earns anything. Ask for a list of hires and departures over several years. A business that looks steady may be spending heavily to stay that way.

Phone costs and client dependence

Find out which telephony and software charges the centre passes to clients and which it absorbs. Then read the rate terms to see whether a price change would hit the margin. Finally, check how much of the work comes from one client. If that client left, the same staff would still be on the payroll. See the financial checks for how to test the books.

The owner’s own hours

Ask what the owner does each week: selling to clients, handling complaints, managing the floor. If the profit assumes the owner works unpaid, a hired manager would cost something. The same adjustment for another trade is shown in what a plumbing company owner actually takes home. Ask the seller to write down the duties, and decide who will do each after closing.