India is a vibrant nation with gifted individuals, and one area where even multinational corporations look for assistance is outsourcing. Let's look at how we can start an outsourcing business in India.
According to Statista, Business Process Outsourcing (BPO) is expected to generate INR US$7.75 billion in revenue by 2025. Indian entrepreneurs are capitalizing on this high demand by focusing on a variety of business process outsourcing services.
From 2025 to 2030, experts predict that this market will expand at a CAGR of 7.74%, which means it's not too late to consider starting an outsourcing company.
This article will walk you through every stage of starting and growing an outsourcing company in India, from breaking down the BPO model to offering ideas for scalability.
What is a Business Process Outsourcing business (BPO)?
The term "business process outsourcing" (BPO) describes the practice wherein a corporation contracts with a third party to handle certain business operations.
You ask why? It could be because those operations are time-consuming, important, but perhaps too difficult, or may not require the in-house team to handle them on a day-to-day basis. Hence, companies with such operations reach out to BPO providers to automate their tasks.
For instance, a business may contract with a Finance & Accounting BPO to handle the accounting department's duties. The BPO organization will take care of your accounting, tax processing, payroll processing, billing accounts, and financial reporting for a fraction of the cost.
Hence, with the help of business process outsourcing, companies get their work done more efficiently.
What are the different types of outsourcing business?
There is a wide variety of BPOs, often classified according to the kind of outsourced function and the proximity of the service provider to the client's location.
1. Back office
In back office outsourcing, a business contracts with an outside firm to handle administrative, marketing, human resources, payroll, accounting, data entry, and information technology-related duties.
2. Front office
Front office outsourcing is the practice of contracting with an outside provider to handle duties that need direct customer interaction. Examples include call center and telemarketing.
3. Onshore
In onshore, sometimes known as domestic outsourcing, businesses get their services from inside the same nation. For example, a Gurugram-based software development company may hire a Bengaluru-based Research Process Outsourcing (RPO) company to handle its IT services.
4. Offshore
Businesses engage in offshore business process outsourcing (BPO) when they want to take advantage of countries with lower labor costs and potential tax savings. For example, a Philippines-based tech company might outsource its customer support to a BPO in Mumbai, India.
5. Nearshore
As opposed to relying on employees in an organization's home country, nearshore outsourcing involves bringing in workers from nearby nations to do tasks or provide services.
How much investment is needed to start a BPO in India?
Before creating a budget, you need to understand where the costs go when starting an outsourcing company in India. Your expenditures will include things like rent for an office, salaries and benefits for employees, necessary registrations and licenses, machinery, software, advertising, and miscellaneous operational costs.
Now that you have the basic costs in mind, your investment will vary depending on the kind of business process outsourcing (BPO) company you are launching. For example, F&A BPO often requires more investment in strong data protection and quality control, while marketing BPO typically requires less tech infrastructure but more investment in creative staffing.
Here is the approximate range of initial investment based on the type of BPO company:
- Data Entry BPO: ₹10–20 lakh
- Customer Support: ₹15–30 lakh
- Accounting BPO: ₹15–25 lakh
- IT Outsourcing: ₹20–50 lakh
- Digital Marketing Outsourcing: ₹20–40 lakh
Tips on how to start a BPO business
Starting a business process outsourcing (BPO) firm in India requires careful preparation and ongoing improvement. For starters, here are some crucial tips to follow:
Deciding your outsourcing niche
Choose a specialization that complements both market need and your area of expertise. Accounting, data entry, customer service, and IT are some of the most common outsourcing industries.
Be sure that the outsourcing segment you choose has room to develop and expand down the road.
Image Source: firstsource.com
Understanding the market
After selecting the niche for your outsourcing company, ask yourself if you have in-depth knowledge of the market. It’s important to keep yourself updated about the outsourcing market, its standards, and your target clients.
Identify markets or sectors that have a strong demand for the services you're offering. Learn about the problems your target clients face and how you can solve them by conducting surveys, analyzing competitors, reading industry studies, and speaking with prospective customers face-to-face.
Get industry-specific data with the help of platforms like LinkedIn, Google Trends, and Statista.
Crafting a business plan
Creating a business plan is not only about figuring out your requirements. It holds greater value than that.
A proper business plan can also attract investors, secure bank loans, and build strategic relationships.
A business plan should include an overview of your execution process, a description of your BPO company, a sales and marketing strategy, financial predictions, a study of your competitors and the industry, and more.
Lay the groundwork for your BPO organization, draft the ultimate plan, taking into account all necessary aspects and the budget associated with it.
Do the paperwork
When starting a business process outsourcing (BPO) company in India, you must ensure that all required documents are completed and submitted on time. There could be a bunch of problems with the legal foundation for starting a business if this is not done.
- Get necessary paperwork from the Ministry of Corporate Affairs (MCA) to set up your outsourcing business as a Private Limited Company (Pvt Ltd) or LLP.
- Keep your PAN, TAN and GST numbers handy.
- Open a business bank account.
- Be familiar with the rules of the Foreign Exchange Management Act (FEMA) if you deal with international clients.
- To get IT-related services, register with the Software Technology Parks of India (STPI), if required.
- Get Shop and Establishment Act license, if required.
Invest in equipment and set up your infrastructure
Get all the necessary equipment you need to ensure you never slow down in delivering high-quality services to your clients. Whether your outsourcing company operates virtually or physically, your setup should include:
- Professional computers
- Secure internet access
- Data encryption and security applications
- Power backup like UPS and generators
- VoIP systems
- Customer Service (CRM) software
- Project management tools
- Office Space, if applicable.
Apart from the above equipment, invest in a business email system like GoDaddy's M365. It has the potential to improve communication, collaboration, and professionalism.
Legal and regulatory requirements
When handling confidential customer information or doing business on a global scale, legal compliance is of the utmost importance.
Important legal and regulatory procedures to undertake while starting a BPO in India are as follows:
- Any new venture launching across domains must be registered in accordance with the Companies Act, 2013.
- Join the National Association of Software and Services Companies (NASSCOM).
- Adhere to Indian labor laws, such as minimum wage, working hours, provident fund (PF), gratuity, and others.
- Adhere to data protection regulations set by international organizations, such as GDPR.
- Get ISO/IEC 27001 certification.
- Healthcare BPOs that deal with patient data from the US must comply with HIPAA.
Hiring and training your team
The key to success is its people. When you train your team and hire talented individuals, they will help you achieve your goals and build a name for your outsourcing business.
Establish a reliable method for hiring people who are well-versed in all relevant areas, skilled problem solvers, and primarily focused on meeting client demands. You can consider university placements or online employment portals to hire real talent.
Finally, create an inviting and positive workplace environment. One of the biggest problems in the business process outsourcing (BPO) industry is employee turnover. To combat this, managers should provide growth opportunities, consistent feedback, and an overall friendly atmosphere.
Acquiring clients - start by accepting short contracts
The day you decide to start your BPO company is the same day you should decide to start building a network. Attend conferences and events in your sector to connect with potential customers and get referrals.
Take advantage of the growing digital marketing landscape and use platforms like SEO and LinkedIn to engage with clients and build a robust client acquisition strategy.
Can you accept short-term contracts?
Never hesitate to start small. Even if you find short-term contracts, say yes to them and treat them as practice contracts. Complete these first jobs to an outstanding standard and get client testimonials.
Being honest, communicating often and clearly, and having a strong commitment to data security will help you succeed, particularly when working with clients who are skeptical of trusting an outsourcing partner.
How to promote your outsourcing business?
Nowadays, most consumers explore services online through websites and social media, so setting up a website is crucial. No matter how good your services are, no one will know about them unless you promote them online.
With the help of AI-powered tools, building a professional website is now an easy 30-minute task. To build an online presence, sign in with GoDaddy Airo and get started.
Here are simple steps that even a non-technical person can easily follow to build a professional BPO website on their own:
1. Choose a perfect domain name
GoDaddy Airo will recommend brandable domain names like procallindia.com if you search for a suitable business term (for example, BPO firm in India).
Select one that is in line with your industry and brand goal.
Related: Definitive guide to using .in domain name extension for your business in India
2. Give your business a name
Enter the official name of your company that you want to use on your website. In this example, it's ProCallIndia. On your website, this becomes the brand header.
3. Add a business description
Describe your company's offerings in a short and puncy manner. Using this data, Airo creates customized content for the whole website. As an example, consider “ProCallIndia is a dynamic BPO company offering high-quality customer support, telemarketing, and back-office solutions.”
4. Let Airo help you suggest website content
Using the data you provided, GoDaddy Airo will create an initial version of your homepage including your brand's graphics, messaging, and important calls to action. For an easier launch, let it fill content.
Choose a theme that matches your brand
Choose a visual theme, such as Organic, Craft, Focus, or Highlight. These dictate CTA styles, font combinations, and layout.
Customize fonts and colors
Select brand-matching font combinations (such as Crimson Text + Open Sans) in the Theme > Fonts section. Change the colors to match your branding standards or logo.
Edit buttons & navigation
To connect action buttons to relevant sections, change them (e.g., Contact Us, Get Started Today). Decide what will be shown on your homepage and top navigation.
Add a service page
Choose New Page under Website > Add Page, then give it the name "Services." Change the navigation bar's visibility. This enables you to highlight services like back-office assistance, telemarketing, and BPO.
Tweak site settings
From the Settings tab, update:
- Basic info
- Social media links
- Favicon
- Google Analytics / Facebook Meta Tag for tracking
- Site history and SEO settings for discoverability
Final review and publish
Check the responsiveness, speed, and content flow of your whole website by previewing it. If you're satisfied, click Publish, and your website will be online.
This ultimate DIY website builder helps entrepreneurs simplify their lives and get online fast.
Managing projects efficiently
One of your primary responsibilities as a business owner is to ensure that your customers get first-rate service. In this regard, project management is essential. Take the following things into consideration:
- Use a project management application, like Smartsheet, Asana or Trello, to keep tabs on due dates and progress.
- To make it easier to communicate with customers and team members, use a technology like Slack or Skype.
- Always satisfy your clients' expectations by delivering services on time.
- To maintain a professional image and respond quickly to client and customer inquiries, use a professional business email.
A few possible barriers along the way include customer management, which can be addressed by creating scalable account management procedures to keep clients satisfied.
Quality control is also a concern, and to resolve it, you need to implement strong QA frameworks that can handle increased workloads without lowering standards.
Scaling your business
All the hard work goes into building the client base, and once you have a steady client base and better operations, the next goal is to scale your business.
When you've got your present setup under control and the funds permit, extend your service offerings by including more BPO services.
Also, your outsourcing company should upgrade to more sophisticated data analytics, AI, and automation systems in the future so it can manage higher volumes.
Start your BPO business in India with GoDaddy’s support!
India offers many attractive factors for business process outsourcing, including low operating costs, a large pool of qualified workers, and encouragement from the Indian government. However, to start a BPO business in India, the right execution is important, especially in the beginning.
With the help of GoDaddy Airo, startups can now start a successful outsourcing business and cash in on the growing BPO industry. It offers all the necessary digital resources, such as a professional company email, domain name, and Microsoft 365 subscriptions, all easy to set up.
