How to Start a Debt Collection Agency

If you enjoy talking on the phone, have experience in debt collection, and are able to work with people to resolve their debts in an acceptable manner, starting a debt collection agency may be a great option for you. Starting this type of home-based business is great because the overhead is extremely low and for the most part, you can choose when you'll work. If being your own boss is your goal, and a debt collection agency sounds like your cup of tea, read on to learn how to start this type of home-based business.

Instructions

1. ~ Consider your Experience & Your Strengths ~

   Before you jump into the debt collection pool, you want to consider your past experience and your strengths. Have you worked in this type of business in the past? Did you enjoy it? You'll also need to be persistent, patient, and have thick skin to be successful as the owner of a debt collection agency.

2. 

   ~ Prepare Your Home Office ~

   You'll definitely want a computer, printer, fax machine, and scanner, as well as filing cabinets for business paperwork. It's also a good idea to have a dedicated phone line in your business name as you don't want clients that you call to return calls or to be phoning your home all hours of the day and night.

3. ~ Choose Debt Collection Software ~

   There is debt collection software that you can use to help you keep track of all of your business activities. This software is a must if you are serious about your debt collection agency.

4. ~ Create a Website ~

   Since you'll be hired by other businesses and since your business type doesn't limit you to working with clients only in your geographical area, it's important to have a high-quality, professional website. If you can't afford to hire someone to make it for you, there is software that you can use to create your own. With a little practice and hard work, you can create your own professional site that will help you to market your business.

5. ~ Choose Your Potential Clients ~

   Are there specific types of businesses that you'd like to specialize in? What size business do you think will give you the most business? Chances are that very large companies have their own debt collection departments. They also have large debt collection agencies that they work with. Small and mid-size companies may not have a relationship with anyone and are great potential clients for you to connect with.

6. 

   ~ Set Your Fees ~

   Typically, debt collection specialists are paid based on the debts that they are successful in collecting. The fee is usually 20 - 30% of the total amount collected. Make sure that your fees are competitive with others in your area and field.

7. ~ Market Your Business ~

   As with all successful businesses, you'll have to market to get clients. You can do this via your website, but you'll also have to get out and meet people, send information, make phone calls, and network. Until you have clients, your full-time job should be to market your debt collection agency.