How to Start a Business Support Service part 3


 Income & Billing

You have a number of options when it comes to deciding on your approach to pricing. Some operators simply call around, find out what other companies are charging and set their prices in that range. Others decide what they want to earn and set their prices based on that without regard to how it relates to the competition. Then there’s the issue of pricing by the project, the page or the hour.

The best approach is a multifaceted one that considers the skill level of the work, your profit goals and the market. You need to set up a system that gives you a structure to work within so you can quote consistent, reasonable and fair rates.

What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

Multiple Hourly Rates

If you’re going to charge by the hour, consider that different rates should apply depending on the complexity of the service and skill level required. For example, Cindy P.’s hourly rate ranges from $28 for straight word processing up to $40 for complex desktop publishing. The Association of Business Support Services International suggests a structure similar to the following:

  • Level 1 (lowest hourly rate): Basic word processing, routine clerical services, simple proofreading
  • Level 2: Enhanced word processing, copyediting, proofreading, basic spreadsheet design, internet research
  • Level 3: Desktop publishing, spreadsheet design, simple web page design, simple web page maintenance
  • Level 4: Graphic design, writing (academic, business, resume, technical), web page design, web page maintenance
  • Level 5 (highest hourly rate): Consulting, training

Note that the same basic task might fall into more than one pricing level, and you’ll need to make a judgment call based on the particular project as to which rate to apply.

Hour Power

When the Association of Business Support Services International surveyed its members, it found that the hourly rate ranges for the most popular services offered by respondents were:

• Basic word processing – $7-40
• Enhanced word processing – $7-50
• Copyediting – $7-75
• Database entry – $18-50
• Transcription, general – $15-45
• Consulting/training – $7-90
• Spreadsheet design – $15-75
• Desktop publishing – $7-75
• Graphic design – $14-100
• Web site design – $20-150
• Internet research – $7-75

Estimating the Job

Many new business owners find estimating one of the most challenging things they do, but if you approach the process systematically, it’s simple. You just need to determine an appropriate hourly rate, calculate the length of time the project should take, and do the math.

Regardless of the format you use to provide the quote (in writing or verbal), it’s a good idea to make notes for yourself so you know what you quoted and how you arrived at that figure. This will be necessary if the actual project turns out to be different than what the client described, or if the client questions the invoice later, even though they agreed to the quote. You may even want to create an estimate form that you can provide to the client and keep a copy in your own files.



Marketing is an area where your creative side can shine. It’s something many people don’t like to do, but it’s essential if you’re going to build a successful, profitable business.

Don’t be discouraged if your marketing efforts don’t produce an immediate response. It’s rare that someone will have a need for your services at precisely the moment you contact them, but if you put together a professional, attractive information package, they’ll keep the information on file and call you when they need you–or they’ll refer you to a colleague who may have the need. It’s not unusual for a sales contact not to generate a response for months–or even a year.

What’s Inside
• Introduction
• Target Market
• Startup Costs
• Operations
• Income and Billing
• Marketing
• Resources

You can find out how to create a basic marketing plan here, but there are issues and ideas specific to business support services that you need to know as you develop your plan. For example, check with your local phone company to find out its advertising deadline and directory distribution date and, if possible, plan to launch your business in time to be included. Your Yellow Pages listing will be an important source of new business, especially in the early days, so don’t get so distracted by other startup tasks that you miss this opportunity.

Another important point is to be sure all your marketing materials are professional and letter-perfect. Many business support services that do a great job in this area for their clients often forget to do the same for themselves. Consider hiring a graphic designer and/or professional writer to help you with your marketing package; you may be able to negotiate a trade-out that will benefit you both.

Referrals Are Essential

Referrals will likely be a primary way you get new clients, so it’s a good idea to have a systematic approach to the process. You should be able to identify who is making referrals that ultimately turn into business so you can cultivate and reward those referral sources.

Complementary businesses are great sources of referrals. For example, print and copy shops often have customers who need word processing or desktop publishing but don’t have the equipment, skills or staff to handle these services.

Your referral arrangements can be set up to provide cash compensation for new business, or you may simply have an agreement where you and other cooperating businesses refer clients to each other as the need arises.

According to Lynette M. Smith, executive director of the Association of Business Support Services International, typical referral fees are 10 percent of the first six to 12 months of business from a new client; 15 percent of the first three months; or 25 percent of the first transaction only.

Of course, many referrals involve no compensation at all–satisfied clients will be happy to refer others to you simply because you do a good job. And you’ll probably also get referrals from friends and associates. Charlene D. says a major portion of her Winter Park, Florida, company’s business came through referrals from people at her church. “Most of my clients over the years have been either church members or people who heard about me from church members or through the church office,” she says.


Advertising is a great way to bring in new business, but choosing effective media may take some experimentation. Probably the single best place to advertise is in your local Yellow Pages, because that’s where people look when they need a service and don’t know who to call. Many communities have more than one telephone directory publisher, so you may need to do some research to determine which directory (or directories) should carry your listing and ad.

Don’t limit yourself to the telephone directory. Bill H. in Iowa City, Iowa, does some radio ads on a local news and talk station, and although he can’t credit much specific new business to them, he says his current customers do hear and mention the spots. “It’s only $100 to $150 per month, and I figure its worth it to keep my name alive with current customers,” he says. He also places ads in the university newspaper classified section and gets a good response from that.

In Chicago, Joann V. limits her advertising to the Yellow Pages, one trade journal and a semiannual direct-mail campaign. She used to buy a mailing list for her direct-mail efforts, but she has found it more effective to build her own list using the telephone directory (using the listing categories of her target market) and trade journals (pulling prospects from ads and editorial mentions) as a resource. “We send a brochure and a Rolodex card, with an introduction, prices and a toll-free number,” she says. “The Rolodex card is really useful, because if they don’t use it right away, they generally hang onto it. I’ve gotten calls years later.”