With the way the economy is today, there is no shortage in the need for efficient debt collectors. Debt collecting is a hard job and requires the right type of personality and education to pursue a career or start a business in this field. If you are interested in starting a debt collection business you will need to have a sound business plan, an understanding of the laws and regulations regarding collecting debts and a way of developing a strong customer base.
How to Start a Debt Collection Business
Plan for Starting Debt Collection Business
- A business plan is essential in the survival and success of any business. If you are seeking financial backing, the investor or investors will need to see a copy of your business plan before making any decisions.
- The business plan details your financial history and credibility. It should include at least the last five years of financial records such as bank statements, tax records and any other loans (paid or outstanding) and equity you may have.
- An investor will also want to see your calculated projections for your expectations on profits and costs of the business. Plan to have at least five years, sometimes as much as fifteen years, worth of carefully calculated and documented projections for your costs and profits.
- No business can succeed without some aggressive marketing. Include a detailed marketing strategy that explains the different angles and plans you have in mind for advertising and gaining customers. Potential investors will want to look at this to get a better idea on your business ideas and potential.
Getting Started (Start Up Guide)
- After making a business plan, it’s time to decide on a business name, professional logo and catchy phrase.
- Be sure to register your logo, business name and phrase with your local business directory. Collect license and permit information from the city hall and any other legal documentation you may need.
- Take classes to help you succeed in your business. For example, accounting classes are a must since you will be dealing with debts and credits. Knowing the fair debt collection policies are also necessary as you can be held accountable for harassing clients, even if you were unaware you were doing so.
- Study software applications that may be helpful when your business expands. You do not need to necessarily purchase software equipment at the time of startup, but you should be aware of them so that you can prepare your business for when you will be able to convert to the applications.
Office and Customers (How to Run)
- Unless you have a building that you will be leasing or renting, you will probably be working from home. Obviously the most important staple of the office will be a computer. It would be a good idea to have a backup computer as well just in case something happens to the main computer.
- Develop or have someone develop a professional looking website for customer to be able to find your business.
- Contact local business with your business cards and set up meetings to discuss how you may help them collect their debts.