How to Start a KPO Business - ProfitableVenture

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Do you want to start a KPO business? If YES, here’s a complete guide to starting a KPO business with NO money and no experience.

There are quite a number of corporate organizations that would not mind cutting overhead cost as low as they can and still get excellent services and maintain professionalism of the highest order. One of the easiest ways of cutting cost is by outsourcing some of your services or business operations.

One of the outsourcing related businesses that an entrepreneur with the required skills can start is a knowledge process outsourcing (KPO) firm.

With the increase in demand for cheaper ways of running businesses and cutting cost, an entrepreneur with the right skill set that decides to start his or her own knowledge process outsourcing (KPO) company is sure going to make good returns on his or her investment.

But it is important to state that serious researching, planning and creativity is a necessity if you truly want to start your own knowledge process outsourcing (KPO) business; you would need the best of software to effectively run this type of business.

To get things straight, knowledge process outsourcing (KPO) is a type of outsourcing service in which knowledge and information related work is carried out by qualified professionals in a different organization or in some cases by a subsidiary of the same organization.

If it is a subsidiary of the organization, they may be operating in the same country or outside the country basically for the purpose of saving costs and other resources.

Organizations hire the services of KPO organizations for various reasons ranging from cost reduction, shortage of skilled employees, acquiring many graduates at very low cost, acquiring high end services at lower cost to decrease unemployment, benefit their economy and provide flexibility in terms of HRM and time management et al.

Starting a knowledge process outsourcing (KPO) company requires moderate startup capital. Aside from the money required to rent an office facility and acquire office furniture, the required software and equipment, you are not expected to spend much on other stuff.

It is important to state that your personal profile and your company’s profile are what will attract business deals for your organization; so you must ensure that you take out time to acquire all the certifications and experience needed to successfully launch your own knowledge process outsourcing (KPO) company.

So, if you have done the required feasibility studies and market research, then you might want to venture into this business.

Steps to Starting a KPO Business

1. Understand the Industry

Knowledge process outsourcing (KPO) companies belong to the outsourcing industry and operators in this industry provide third-party outsourcing services on a contract basis. Clients can outsource specific operations and business functions including both back and front office tasks, to companies in this industry.

As it relates to Knowledge process outsourcing (KPO); it is an outsourcing service that specifically engages in outsourcing of essential information related business operations which are important or form an integral part of an establishment’s value chain.

It is important to state that knowledge process outsourcing (KPO) requires advanced analytical and technical skills as well as a high degree of specialist expertise.

In a broad perspective, knowledge process outsourcing (KPO) services include all kinds of research and information gathering services like banking and finance, intellectual property research for patent applications; equity research, business and market research, legal and medical services; training, consultancy, and research and development in fields such as medicine, pharmaceuticals and biotechnology; and animation and designs and in any other related field.

The Business Process Outsourcing Services industry that knowledge process outsourcing companies is a part of is indeed a major sector of the economy of the United States of America which generates well over $135 billion annually from more than 170,457 registered and licensed business process outsourcing firms (knowledge process outsourcing (KPO) companies inclusive) scattered all around the United States of America.

The industry is responsible for the employment of well over 979,236 people. Experts project the knowledge process outsourcing (KPO) and BPO outsourcing Services industry to grow at a 3.3 percent annual rate within 2012 and 2017. In the United States of America, there is no organization that has a lion share of the available market.

Going by happenings in recent time, you will notice that the Business Process Outsourcing Services industry is growing steadily, aided by an improving economy and rising revenue in the human resource, finance and accounting, customer relations management and insurance sectors, which provide a large portion of related outsourcing business.

A recent report published by IBISWorld shows that the Business Process Outsourcing Services industry is characterized by a low level of market share concentration. Although there are high revenue generating companies within this industry, many have their operations overseas.

Furthermore, there are many small industry operators in this industry, which reduces the overall market power of each large player. In 2017, IBISWorld estimates that the four largest companies in the industry will each account for less than 5.0 percent of total industry revenue.

The report further stated that the largest players in this industry such as Conduent Inc. and Accenture PLC, maintain an extensive presence globally, which gives these companies a sizable advantage in the market.

The fact that knowledge process outsourcing (KPO) companies can be found in all the cities in the United States of America does not in any way make the industry to be over saturated. The fact that there are organizations out there who would want to outsource their core business services makes the business ever thriving.

Some of the factors that encourage entrepreneurs to start their own knowledge process outsourcing (KPO) business despite the fact that the business is highly regulated is that the business is highly thriving and profitable and can be started in any part of the United States of America.

Over and above, starting a knowledge process outsourcing (KPO) company requires professionalism and a good grasp of some specialist business and operation knowledge. Besides, you would need to get the required certifications and license and also meet the standard expected for such business before you can be allowed to start a knowledge process outsourcing (KPO) company in the United States.

2. Conduct Market Research and Feasibility Studies

Demographics and Psychographics

The people who require the services of a knowledge process outsourcing (KPO) company cut across corporate organizations, investors and business owners cum entrepreneurs who want to outsource knowledge and information related work to core professionals that will give them the best at a favorably cost.

3. Decide What Niche to Concentrate On

In order to thrive in the knowledge process outsourcing (KPO) line of business, you should be able to specialize in a key area that you have the strongest skill set and qualification. This is important because you can hardly find any knowledge process outsourcing (KPO) firm that is a jack of all trade.

It is important to state that there are loads of niche ideas in this line of business, but here are a few you can choose from if you want to start your own knowledge process outsourcing (KPO) firm;

Banking and finance
Intellectual Property research for patent applications
Equity research
Business and market research
Legal services
Medical services
Agriculture services
Training, consultancy, research and development in fields such as medicine, pharmaceuticals and biotechnology
Animation and designs

The Level of Competition in the Industry

Irrespective of the line of business you decide to pitch your tent, you are still going to compete with others who are into the same area of business and the knowledge process outsourcing (KPO) business is not an exemption. The level of competition in the knowledge process outsourcing (KPO) outsourcing industry depends largely on your area of specialization and of course your core competence.

As a newbie in this line of business, you need not be scared because the truth is that no matter the level of competition in an industry, if you have done your due diligence and you have the required expertise and qualifications, you will always make headway in the industry.

Just ensure you have access to highly skilled workforce, you have what it takes to properly and accurately carryout knowledge process outsourcing (KPO) services in specific areas, and you know how to reach out to your target market.

4. Know the Major Competitors in the Industry

In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.

These are some of the leading knowledge process outsourcing (KPO) companies in the United States of America and also in the globe;

Conduent Inc.
Accenture PLC
Telegenisys
Sitel
Absolutdata
Analytics, Knowledge process outsourcing
Analyx, Knowledge process outsourcing
Aranca
Copal Amba
Dolcera
Evalueserve
Fractal Analytics
Irevna

Economic Analysis

When it comes to starting a knowledge process outsourcing (KPO) company, you just have to get your feasibility studies and market research right before venturing into the business. It is good to mention that knowledge process outsourcing (KPO) business is not for rookies; it is for professionals who have successfully gathered the required experience and expertise to handle such business.

But an aspiring entrepreneur can learn ropes on the job/business as long as you have the finance to hire experts when you secure a knowledge process outsourcing (KPO) contract. Starting this kind of business definitely entails that you get the required certifications and business license and also build good working relationship with players in related industry.

To be on the safe side, it will pay you to hire the services of experts that will help you with comprehensive economic and cost analysis and the profitability of the business within the location that you intend launching it. If you get your economic and cost analysis right before launching the business, you may not have to stay the long before you break even.

5. Decide Whether to Buy a Franchise or Start from Scratch

When it comes to starting a business of this nature, you will have to start from the scratch because from available research carried out, there is no known knowledge process outsourcing (KPO) company in the United States that is into franchising.

6. Know the Possible Threats and Challenges You Will Face

If you decide to start your own knowledge process outsourcing (KPO) company today, one of the chief trials you are likely going to face is the presence of well-established knowledge process outsourcing (KPO) companies and also other related businesses in the outsourcing and consulting industry who are also proposing same services that you intend offering. The only way to avoid this challenge is to create your own market.

Some other threats that you are likely going to face as a knowledge process outsourcing (KPO) company operating in the United States are unfavorable government policies, the arrival of a competitor within your location of operation and global economic downturn which may affect the outsourcing and consulting services industry.

There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When considering starting a knowledge process outsourcing (KPO) company, the legal entity you choose will go a long way to determine how big the business can grow; some knowledge process outsourcing (KPO) companies design their business and services for regional/community market, some for national market, while others for international market. You may consider opting for the sole proprietorship business legal entity.

8. Choose a Catchy Business Name from the ideas Below

When it comes to choosing a name for a business, it is expected that you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.

If you are considering starting your own knowledge process outsourcing (KPO) company, here are some catchy names that you can choose from;

Classic Professionals® Knowledge Process Outsourcing Company, LLC
Precepts Int’l® Knowledge Process Outsourcing Company, Inc.
Rex McCain and Co® Knowledge Process Outsourcing Company, LLC
Harbor Pointe® Knowledge Process Outsourcing Company, Inc.
Zoe Perry & Co® Knowledge Process Outsourcing Company, LLC
Team Excel® Knowledge Process Outsourcing Group
Trusted Hands® Knowledge Process Outsourcing Company, LLC
Mike Lance® Knowledge Process Outsourcing Company, Inc.
Whyte Square® Knowledge Process Outsourcing Company, Inc.
Bruno Hilary® Knowledge Process Outsourcing Company, Inc.
Jeff Newman & Co® Knowledge Process Outsourcing Company, LLP
Kaiser Liz – Brown ® Knowledge Process Outsourcing Company, Inc.

9. Discuss With an Agent to Know the Best Insurance Policies for You

In the United States of America and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your knowledge process outsourcing (KPO) company.

Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own knowledge process outsourcing (KPO) company in the United States of America;

General insurance
Health insurance
Liability insurance
Workers compensation
Overhead expense disability insurance
Business owner’s policy group insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own knowledge process outsourcing (KPO) company, usually you may not have any need to file for intellectual property protection/trademark.

This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties. But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.

If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

11. Get the Necessary Professional Certification

Aside from the results you produce as it relates to properly carrying out professional knowledge process outsourcing jobs for your clients, professional certification is one of the main reasons why some knowledge process outsourcing (KPO) companies stand out.

If you want to make an impact in the knowledge process outsourcing (KPO) industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in the competitive market.

These are some of the certifications you can work towards achieving if you want to run your own knowledge process outsourcing (KPO) company;

Certifications in your area of services
Degree in Related Courses

Please note that you cannot successfully run a knowledge process outsourcing (KPO) company in the United States and in most countries of the world without acquiring professional certifications and business license even if you have adequate experience cum background in the knowledge process outsourcing (KPO) services industry.

12. Get the Necessary Legal Documents You Need to Operate

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized especially a knowledge process outsourcing firm. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own knowledge process outsourcing (KPO) company in the United States of America;

Certificate of Incorporation
Federal Tax Payer’s ID
State Permit
Business License and Certification
Business Plan
Non-disclosure Agreement
Employment Agreement (offer letters)
Operating Agreement for LLCs
Insurance Policy
Consulting contract documents
Online Terms of Use
Online Privacy Policy Document
Apostille (for those who intend operating beyond the United States of America)
Company Bylaws
Insurance Policy
Memorandum of Understanding (MoU)

13. Raise the Needed Startup Capital

Starting a knowledge process outsourcing (KPO) company requires that you pull cash together. The truth is that there are certain things you cannot run away from such as securing a standard office in a good business district, equipping the office and paying your employees.

These are part of what will consume a large chunk of your startup capital.So, if you want to finance your knowledge process outsourcing (KPO) company, one of the first things you should consider is to write a good business plan.

If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business or to partner with you. Here are some of the options you can explore when sourcing for startup capital for your knowledge process outsourcing (KPO) company;

Raising money from personal savings and sale of personal stocks and properties
Raising money from investors and business partners
Sell of shares to interested investors
Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
Source for soft loans from your family members and your friends

14. Choose a Suitable Location for your Business

Knowledge process outsourcing (KPO) companies and most outsourcing and consulting services based type of businesses require that you see physically with your clients, hence it must be located in good location; a location that is prone to both human and vehicular traffic and a location that is at the epicenter of a business district if indeed you want to attend to loads of clients and maximize profits from the business,

The fact that you can operate your knowledge process outsourcing (KPO) company from any part of the world does not mean that location has little influence on the success of the business.

If you have taken your time to study knowledge process outsourcing (KPO) firms and other related businesses, you will realize that knowledge process outsourcing (KPO) companies and related businesses are willing to pay expensive rents in order to stay in a busy business district; a place where business activities and real estate cum construction activities are at its peak.

The location you chose to open your knowledge process outsourcing (KPO) company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consist of people with the required purchasing power and lifestyle.

If you make the mistake of renting or leasing a facility for your knowledge process outsourcing (KPO) company in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.

It is important to note that a business facility in a good location does not come cheap, hence you should be able to allocate enough fund for leasing/renting in your budget. If you are not sure of the location to site your knowledge process outsourcing (KPO) company, then you can talk to a business consultant or a realtor to help you out.

So, if you are looking for a location for your knowledge process outsourcing (KPO) company, ensure that it is a place that is located in a business district in your city, a place that is visible and easily accessible. Of course, you would not want to locate this type of business in the outskirt of town. Your clients should be able to drive down and locate your office with little or no difficulty.

15. Hire Employees for your Technical and Manpower Needs

On the average, there are no special technologies or equipment needed to run this type of business except for customized knowledge process outsourcing (KPO) software and other real estate related software apps. You will also need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves).

When it comes to choosing between renting and leasing an office space, the size of the knowledge process outsourcing (KPO) company you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard knowledge process outsourcing (KPO) company, then you should consider the option of leasing a facility for your office.

As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.

Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Consultants and Experts in Key Disciplines, Accountant, Business Development Executive/Marketing Executive, and Customer Service Officer.

Over and above, you would need a minimum of 5 to 10 key staff to effectively run a medium scale but standard knowledge process outsourcing (KPO) company. In most cases, you might have to hire some core professionals to help you handle some job functions since you may not have the required finance to employ them on a full-time basis.

The Service Delivery Process of the Business

On the average, the way knowledge process outsourcing (KPO) companies work varies from one firm to another, but ideally, a knowledge process outsourcing (KPO) company is expected to first and foremost build a robust company profile before sourcing for knowledge process outsourcing (KPO) contract from clients.

When clients engage the services of a knowledge process outsourcing (KPO) company, they sign a contract and the knowledge process outsourcing (KPO) company goes all out to carry out research on the project in question.

Generally, knowledge process outsourcing (KPO) services include all kinds of research and information gathering like banking and finance, intellectual property research for patent applications; equity research, business and market research, legal and medical services; training, consultancy, and research and development in fields such as medicine, pharmaceuticals and biotechnology; animation and designs and in any other related field.

Once the research is done, the report is forwarded to the organization as required in the contract document. It is important to state that a knowledge process outsourcing (KPO) company may decide to improvise or adopt any business process and structure that will guarantee them good return on investment (ROI), efficiency and flexibility.

16. Write a Marketing Plan Packed With ideas & Strategies

As a knowledge process outsourcing (KPO) company owner, you would have to prove your worth over and over again before attracting clients. So, if you have plans to start your own knowledge process outsourcing (KPO) company, it will pay you to build first build a successful career in the outsourcing and consulting services industry.

People and organizations will only hire your services if they know that they are going to get good value for their money and time. So, when you are drafting your marketing plans and strategies for your knowledge process outsourcing (KPO) company, make sure that you create a compelling personal and company profile.

Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to the knowledge process outsourcing (KPO) industry and the organizations you have worked for in time past. This will help boost your chances in the market place when sourcing for clients.

Please note that in most cases when sourcing for big knowledge process outsourcing (KPO) contracts especially from corporate clients, you will be called upon to defend your proposal, so you must be pretty good with presentations. Here are some of the platforms you can utilize to market your knowledge process outsourcing (KPO) company;

Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, startups, investors, the small and medium scale business community in and around the location you intend operating your business
Advertise your business in relevant business magazines, radio and TV stations (make yourself available for outsourcing and consulting related talk shows and interactive sessions on TV and Radio)
List your business on local directories
Attend relevant expos, seminars and business fairs
Create different packages for different category of clients in order to work with them
Leverage on the internet to promote your business
Join local chambers of commerce and industries around you with the aim of networking and marketing your services; you are likely going to get referrals from such networks
Engage the services of marketing executives and business developers to carry out direct marketing

17. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you offer your services at the right price is to ensure that you source your startup capital from sources that won’t put pressure on you or give you high interest rate.

Another strategy that will help you offer your services at the right price (competitive interest rate) is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name.

Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products and services. You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.

18. Develop Iron-clad Competitive Strategies to Help You Win

The knowledge process outsourcing (KPO) company line of business is a competitive industry, and you must come up with unique and highly creative strategies to be able to outsmart your competitors in the industry.

Part of what you need to do in order to stay competitive in the industry is to continue to deliver excellent results as it relates to the services you offer. Organizations and people will always run to you if they know that you can provide solutions to their business needs and also offer them good value for their money.

Another strategy that you can adopt is to ensure that your organization is well positioned, key members of your team are highly qualified and certified as it relates to their job roles in the knowledge process outsourcing (KPO) services industry.

19. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.

If your customers are satisfied with your services delivery, they can hardly source for alternative service providers or products. If you can continue delivering excellent services and business solutions, then you won’t struggle to maintain loyal customers.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized emails and above all, you can easily receive complaints and feedback from them).

20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be.

If your intention of starting a knowledge process outsourcing (KPO) company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.

In promoting your brand and corporate identity, you should leverage on both print and electronic media and also social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching.

Below are the platforms you can leverage on to boost your brand and promote and advertise your knowledge process outsourcing (KPO) company;

Place adverts on business related magazines and newspapers, radio and TV stations
Encourage the use of word of mouth publicity from your loyal customers
Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms to promote your business.
Ensure that you position your banners and billboards in strategic positions all around your city
Distribute your fliers and handbills in target areas in and around your neighborhood
Contact corporate organizations, startups, investors, small and medium scale business community in the United States by calling them up and informing them of your organization and the services you offer
Advertise your business in your official website and employ strategies that will help you pull traffic to the site
Brand all your official cars and ensure that all our staff members and management staff wear your branded shirt or cap at regular intervals.