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How Do I Start a KPO Business?

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  • Written By: C.B. Fox
  • Edited By: Susan Barwick
  • Last Modified Date: 21 August 2016
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With Knowledge Process Outsourcing (KPO) services gaining popularity, many new KPO businesses are formed each year. To start a KPO business, a person needs access to a relatively skilled and inexpensive labor force. Recruiting the proper workers is essential to running a successful KPO business because, unlike with many other services that are outsourced, KPO requires that the workers have a great deal of specific knowledge and skills. A person looking to start a new KPO business should also have experience and contacts in a specific field so that they can provide good references to potential clients.

The first step in starting a KPO business is determining what services to provide. Some of the more common KPO services include research and development, underwriting, accounting, and legal advice. Each of these services requires a different set of skills and knowledge, and a new company should begin by focusing on the one element that they believe they can provide well.

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Most KPO businesses are started in nations where education is good and labor is inexpensive. Unlike outsourcing manufacturing or customer service, which require only a small amount of training to be successful, KPO services must be adapted to meet a number of different client needs. Many of the skills needed in KPO services require a great deal of decision making from the staff of the KPO business, and as such, require that the staff have received a great deal more education and training than with other types of outsourcing.

Attracting the right staff is essential when beginning a new KPO business. The high levels of skill and problem-solving ability of these businesses requires that the staff be well educated in the field and able to communicate easily with clients, sometimes in a number of different languages. Though KPO businesses are usually started in countries where labor is cheap, attracting skilled employees may mean spending more money on salary in KPO than in other businesses involved in outsourcing.

As with any business, starting a new KPO business requires enough capital to get through the costs of training employees and renting or purchasing space and equipment. It can take a fair amount of time for a KPO business to turn a profit. Starting with sufficient capital will give the business better odds of success.

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