#Collections #SkipTracing #DebtCollection #Entrepreneurship 🤑
Are you someone who has collected $300k+ in the collections industry and is now looking to take your expertise to the next level? If so, you’re in the right place! In this article, we will explore the challenges and opportunities faced by individuals who have excelled in debt collection and are now considering starting their own collections agency.
Starting your own collections agency can be a rewarding venture, but it comes with its own set of challenges. Below, we will discuss some key steps you can take to successfully launch and grow your collections agency:
## Step 1: Create a Solid Business Plan
A well-thought-out business plan is essential for the success of any new venture. Make sure to include details such as your target market, pricing strategies, marketing plan, and financial projections.
## Step 2: Establish Your LLC
Forming a Limited Liability Company (LLC) can provide you with personal liability protection and tax advantages. Consult with a legal professional to ensure you are setting up your business structure correctly.
## Step 3: Build a Professional Website
Having a professional website is crucial for attracting new clients and building credibility. Make sure your website is easy to navigate, mobile-friendly, and showcases your services effectively.
## Step 4: Develop a Day-to-Day Business System
Creating a streamlined process for managing your collections activities can help you maximize efficiency and productivity. Consider investing in collections software to help automate tasks and streamline workflow.
## Step 5: Invest in Equipment
Having the right tools and equipment can make a significant difference in the success of your collections agency. Invest in skip tracing tools, debt collection software, and other resources that can help you effectively locate debtors and recover delinquent accounts.
## Step 6: Brand Your Company
Building a strong brand for your collections agency can help you stand out in a competitive market. Develop a unique brand identity, including a logo, color scheme, and messaging that reflects your agency’s values and mission.
## Step 7: Market Your Services
Promoting your collections agency effectively is crucial for attracting clients and growing your business. Consider using a combination of online and offline marketing strategies, such as social media advertising, direct mail campaigns, and networking events.
## Step 8: Launch Your Agency
Once you have completed all the necessary steps to set up your collections agency, it’s time to officially launch your business. Celebrate this milestone and be prepared to work hard to establish your agency as a reputable and trusted service provider in the industry.
In conclusion, starting your own collections agency can be a challenging but ultimately rewarding endeavor. By following these steps and staying committed to your goals, you can turn your expertise in debt collection into a successful business venture. Good luck on your journey to entrepreneurial success! 🚀
Sounds like you need marketing. Try some targeted paid ad spends to see if you can hit the right market and get some customers.
I love your story!
You clearly understand the crisis companies have in collecting.
Reach out starting with competitors of the company you worked for and show them how much money you have recovered.
Continue to reach out via phone, email and linked in.
Another tactic is to partner with a complimentary company that can refer their business clients to you in order to bring value to both of them. You can also pay a commission to the companies that refer clients to you.
Once you get that dialed in to a few arrangements like that, you will not have to prospect for business any more.
Why wouldn’t you do what you did before and search for job openings in collections, make a contact and offer your services as an independent contractor through your LLC as opposed to be oming their employee?
Call on businesses and ask if they have 1m in collections per year. If they do, they get the first 50k free to test you. You show them you can do it risk free to them and then you make money on 950k.
> Instead, he told me I could keep my current job until I found something else and **warned me not to harm his accounts.** However, my intention was to resign and offer my services through my agency. Unfortunately, despite the impressive setup and efforts to market my services, I haven’t had much success in gaining clients.
From your story, sounds like your previous employer was a disingenuous jerk not willing to pay you what you are worth.
Obligatory IANAL, but I don’t think even formal written non-competition clauses are enforceable, much less casual/verbal ones.
If you think you can do better for your previous boss’ clients, then fuck your earlier boss, and get busy poaching them.
What was it about that particular company that you think led to your successful collection rate? Was it the industry? Was there something specific about the product/selling that they were selling?
He owes you a significant amount of money. Sue him.
What skiptracing tools do you use? How did you apply/get approved?
Look, you haven’t answered the one question it matters, which is whether or not you want a job or whether or not you want to make the company your job. What do you actually want at the end of this process? Security of a job, or to be a business owner? Because the business owner comes without security. And it sounds like that’s what you really want.
Unfortunately, in my experience, this is an industry that’s hard to breakthrough. Lenders are bound by their credit lines (who put up a big chunk of the financing), and those credit lines are part of the decision-making process for who is handling the collections on a portfolio, especially if it’s outsourced. They’ll look you up and down, audit the heck out of your company, and that whole process can take months. It’s usually easier once companies are recognized in the industry, or have rubbed elbows with key people.
My recommendation is, don’t label yourself as a collections agency. Instead, label your company as a consulting firm, helping small lenders get their collections up-to-date to industry standards, and help them make more money in the long-run. Do this strategy for a bit, and then aim to convert those existing clients to outsource parts of their processes (like only skip-tracing to your company or close a deal as a backup servicer), until eventually your track record proves itself and you can breakthrough in the future as a full on collections agency.
Hope this helps.
Not directly related but make sure there won’t be any problems with non-compete or non-solicit clauses in your employment contract!
How exactly did you get started in collections? I’m young and it sounds like an interesting field
buy a boat
You’ve developed a skill set in finding people.
This is a skill which is useful in the oil and gas industry. Whether it is people wanting to buy leases (you have to be able to find people) or people wanting to buy mineral rights. There are other niches in which O&G companies have funds in suspense accounts for people they can’t locate. From time to time some companies will begin an effort to locate the parties with suspended funds so as to get that money off their books.
As another commenter said, if you brand yourself as a consultancy you can open more doors.
Anecdotally, I was trying to buy an oil and gas lease from a guy one time and finally found him living on an island off the coast of Chile. Mailing documents took forever on that one.
Did you know you can buy debt portfolios and collect them yourself? I was considering this a long time ago.
Honestly, you should have just run your businss on the side and shouldn’t have told your boss or quit. Basically, you build your life around your salary and do your side project until it takes off enough you can’t afford not to do it full time.
Instead of b2c, why not pivot to b2b and approach the lawyers? They get the clients and bill; you do the work and invoice the lawyers.
Suggestion: call & offer to buy their charged off debt. Then do it on terms (viz) you buy the debt & pay later out of proceeds collected. Basically they have nothing to lose.
This is a good line of work. You just need to get in some doors. Feel free to DM me. I’ve done this sort of thing in the past.
Also you might concentrate on high default industries. For example: money is notoriously difficult to collect in the hemp and cannabis space (ask me how I know). I know I have some outstanding bills & my buddies at other companies do too. Do a good job, get a referral.
keep going man, you will kill it once you find clients
I used to be into buying and selling businesses, and knew of business brokers who specialized in restoration companies. When these owners are selling their businesses their bad debt is essentially worthless, so it doesn’t get added into the sale price. I think an owner ready to sell the business would be the perfect person for your service because if they could make any collections at all it’s worth something more than selling it for nothing to the future seller.
Trying to get in touch with a broker who has a huge network of people selling their businesses I think is a good place to start. Message me if you have a question!
They make too much money to give a shit that’s my experience working with medium to large companies.
You can collect 2k a customer owes me from a year ago
In college 20 years ago I did sales for a small time collections agency. Literally went through the phone book one by one calling businesses asking if they had any bad debt to collect.
I closed $100k in business by my 3rd month working part time.
It’s probably harder now with all the robocallers, but why don’t you spend an hour calling businesses around your city or state to see if they have any bad debt that they need help collecting?
It’s pretty much zero risk for them so as long as you can get someone in AR on the phone you’ll close a few, then you’re off to the races. You’ll need to establish credibility though since the industry does have a bad rep, for good reason.
The company I worked at was just the first names of the partners and sounded vaguely like a law firm.
Have you done collections for large retailers? I have a store that owes me about 20k. Have been meaning to look into collections. Message me if it’s something you are versed in. Happy t offer a commission.
I would be fascinated to learn more about what you do. I have heard the term “skip-tracing” a few times, but I have no idea what it entails.
Would you do work for a financial institution? What fee structure are you looking for to start?
If you can collect on any of my rental properties’ tenants you can keep 75%
I think you should be looking in to how to purchase debt for pennies on the dollar and collecting the debt yourself. Hell you could probably get a line of credit or SBA load to purchase $2m worth of super sketchy payday loan or credit card debt for $80,000 then work it for the next couple years.