How to Start a Collection Agency
Perhaps you’ve been in the collection industry for years, and you wish to join the market and start your own collection agency. That would not be a problem anymore, since this article has been intended with you in mind, and will provide you with a good business start-up guide to starting your own collection agency business.
If you are good at talking with people and convincing them to pay off their debts, then you can definitely start your own collection agency business.
What does it take, other than that skill, to start this venture?
Know Your Laws
Since collecting debts usually involve high amounts of money, you need to know the legal ins and outs of the trade. Specifically, you need to obtain yourself a copy of the Fair Debt Collection Practices Act as its provisions dictate your actions in facilitating your collection agency. The FDCPA is essential and important because it can definitely steer you away from legal trouble when you call or make correspondence with the debtors. You wouldn’t want to end up in trouble after saying the wrong words in a collection letter or conducting yourself wrongly when talking to a client over the phone.
Office Equipment for Collection Agency
The collection agency business requires data – electronic and in paper form – to be kept and maintained. This means that you need to have some basic office equipment like filing cabinets and a few computers. This would dominate your start-up costs and financing, as computers and filing cabinets need quite some money to acquire. You would need to lease office space as well. The amount you would need in order to start your venture would depend on how many equipment you will be procuring as well as the terms of your lease.
You would also need to procure debt collecting software, many of which can be bought from the Internet. If you can afford it, you can hire the services of a programmer to build you customized debt software.
A Definite Market
As a collector, you would need to know who your clients could be, and how you can get them to avail of your agency’s services. Oftentimes, collection agencies are subcontracted by businesses that need to get after debtors. To get in touch with these prospects, you would need to get yourself recognized. You can either join the chamber of commerce or rotary clubs in your area, or volunteer your services for businesses or companies that need collectors in their credit departments.
Of course, you would need to have a good marketing strategy as well. The Internet is certainly the best place to let yourself known if you wish to expand past your local area. Get yourself an SEO specialist and a web designer, build a website and optimize it so it can be noticed among search engine results.
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