3 Tips for Debt Collections Startups
Starting any new business can be a daunting task and why so many entrepreneurs struggle, especially during their first year. Although any business can have its inherent challenges, can you imagine what a new debt collection agency has to face? After all, you will be going after uncollected debts turned over to your company for collection after they have repeatedly tried and failed to collect what’s due to them.
Along with that, there are all the legal requirements of starting and operating a business in your state, so you can imagine just how trying it can get. Don’t throw in the towel just yet! Here are some tips that can help you get off the ground to a successful start.
1. First – Cross Your T’s and Dot Your I’s
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Before you even attempt to round up your first client or making that first contact with a debtor, make sure you’ve crossed all your T’s and dotted all your I’s. As cliché as that might sound, don’t wait until the government comes swooping in to close your doors because you failed to get all the proper licensing or adhered to the safety codes in your location. Why not get help from a professional agency with expertise in debt collection licensing requirements by state? Remember, each state, county, and city has its own legal requirements to meet and state licensure is a biggie!
2. Marketing 101 – Growing Your Client Base
Perhaps the second-most important thing you’ll need to accomplish is gathering a large enough client base to keep the money flowing. That doesn’t mean those defaulters you will be going after but commercial concerns such as doctors’ offices, hospitals, utility companies, financial institutions and so forth. In the beginning, you probably won’t land that huge corporate account, but with a good marketing team on the job, you will quickly make connections you never thought possible.
3. Standardize Company Policy – You Write the Book!
Finally, the other often overlooked aspect of starting a debt collection agency is to ‘assume’ your employees will all be on the same page. The only way to do this is if YOU write the book. Before hiring the first person, make sure you standardize procedures you expect them to follow. You can find good tips on this site about the day to day dealings with debtors, but in the end, you must be the one who sets procedures on dealing with the people you are literally going after for your clients. It is imperative that you determine how people will be dealt with because, ultimately, you are the one held liable in all things. It’s your business after all and quite literally, the buck stops here!
Starting a new business can be daunting but it is also an exciting time in the life of an entrepreneur. When it comes to debt collections, you understand that although unpleasant at times, it’s become a necessary evil. This is especially true in a sluggish economy, so for those times, if nothing else, make sure those company policies are adhered to and you will make a successful go of it. Congratulations on your new company and good luck for future success!