I could get some heat from this because we have all had some type of collector harass us at some point. You would probably rank a collector up there with Insurance guys, Car Salesmen. When it’s all said and done, it’s BUSINESS. With a capital C! (Capitalism)
Just like any professional business, there was a bad egg in the company that gave somebody at some point a bad experience. Your Collection Business doesn’t have to be this way.
A collection agency is a business that collect bills, NSF (non-sufficient Fund) checks or debts for individuals or other businesses. One type of collection agency merely collects funds WHEN DUE on behalf of an owner or company; the other specializes in collecting overdue accounts– those the debtors apparently do not intend to pay. The former is the easiest, but doesn’t pay as well as the latter because there is less work and more competition. The second type is the most lucrative to the entrepreneur. If you are one of those who isn’t comfortable being a “nice guy” all the time, this could be it! A collection agency is a business that offers a good income with hardly any investment and minimal direct public contact.
Every small town needs a good friendly collection agency. This is just a start please email me with further questions. This is something that I have been considering and actually have a business plan for.
HOW TO START:
1st seek an Attorney get incorporated and have him draw you up some contracts to get the ball rolling. You can really start this on a bootstrap budget. Buy some business cards and start soliciting the crap out of every single small bank, finance company, buy-here pay here auto dealer etc. You can negotiate a fee for the contracts you do collect. You see there are laws with collecting when to contact the customer and what to say to them. But, I can’t explain in enough detail that if you talk to the consumer as a real person and understand their pain you will help their credit and you can be profitable. I have been a collector for a fortune 100 company and so has my wife. She is an outstanding mother and doesn’t have a mean backbone in her body unless I leave the toilet seat up. ha. She was an excellent collector for a subsidiary of AIG. After last year, she gave the company her soul and in return they where downsizing. She is now on the right path and is in nursing school. Back to the blog, she was an excellent collector and even when they paid, the customer still respected her and was nice, because bottom line, they understand it’s debt.
HOW TO GET PAID:
Your collection fee is usually a fixed percentage of the amount collected, the actual percentage varies with the age of the debt and the debtor’s availability. It can also be a percentage plus expenses, if they are out of the ordinary (make these arrangements in advance). Collection fees normally range from 35 to 50 percent of the amount collected, regardless of whether all the debt is collected, or if there is a settlement.. The lower percentage is for debts less than six months in arrears and the highest for those over a year overdue.
You see any business just needs love like a newborn, it’s yours to have and to hold for ever and ever. It will spit up on you from time to time and maybe give you a dirty diaper from time to time, but the benefits will not be measured to the average eye. If you have questions send me a question or two. I can start you on the correct path with any business. Enjoy.
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