How to Start a Debt Collection Business

A debt collection business makes a good home business. The problems inherent in running a debt collection business include finding debtors. However, there will never be a shortage of customers, because there are many businesses seeking this service.
Initially, you will not be doing much collection. You will need to generate interest in your services first. Many of the items you'll need, you may already won. This article details the how to start a debt collection business from home.

Things You'll Need

• Office equipment (telephone, printer, fax, etc.) Office supplies (paper, staplers, index cards, etc.) Broadband Internet access Business cards, flyers, envelopes Address labels Website Initial investment of $2,000 to $10,000 (USD) Subscription to online people search database(s) Mailing lists of small to mid-sized businesses

Instructions

1. Before you anything else, put together a business plan. Once that is completed, figure out a name for your business and your business' logo, if you have not done this already. Once you have reached a final draft of your logo, take your concept to a printer, and have it print up envelopes, letterhead stationery and business cards.

2. Begin to build a list of people who may be interested in using your debt collection business. One option to build this list is to hire someone who is willing to volunteer his or her time or work for a small fee. This list should contain small businesses in your area, as those are most likely to become your customers. If you have friends who own businesses, include them.

3. Make brochures with details about your service. You can hire a professional to design them, but if you are creative, and have a grasp of a word processing program, you can make them yourself. Make the brochures as professional as possible. Once you have reached a final draft, make a few thousand copies at a local copy center.

4. Draft an introduction letter to let potential customers know about your debt collection business. Be clear and concise in your letter. Print out a copy of this letter on your company letterhead. This is a master copy for future printings. Make copies to mail to businesses later on.

5. Using the mailing lists, print out envelopes, or print out address labels. Microsoft Word's mail merge feature can help automate this task. You can hand write the addresses on the envelopes, but it won't look as professional. Stuff the envelopes with the letters you printed in Step 4.

6. Call businesses in your area to schedule meetings with owners. Hand out your brochures at these meetings. Keep a detailed list of all new accounts and start files on the businesses you will be working with. Because word of mouth is effective in local markets, ask for referrals to other businesses from those that you meet.

7. Leave brochures and business cards in stores in the area (with permission). This is a great opportunity to interact with owners of these businesses. They may be interested in using your debt collection services themselves. Once you begin to make an impression, and recover payments, enjoy the fruits of your previous labors.

Tips & Warnings

• Follow legal guidelines regarding debt collection in your area. Legalities should never be a hindrance to the success of your business, but an accent to your company's reputation.