How to Open a Debt Settlement Company
The Palm Beach Post News reports, "The average credit card debt in America is $15,519." If you're considering opening a debt consolidation business or a debt settlement company, this is welcome news. A debt settlement company negotiates with credit card companies on behalf of cardholders to lower their monthly payments, reduce interest rates, eliminate or forgive fees and charges, and pay-off their outstanding debt for an amount less than owed.
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Instructions
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Familiarize with the debt settlement process. Work in an established settlement agency, reading trade publications, and visiting the websites of other debt settlement companies. Consult your state's laws regarding debt settlement companies to see if you need a license or professional designation to practice. The Federal Trade Commission has federal jurisdiction over all debt settlement agencies.
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Secure financing. Start-up costs will be small to open a debt settlement company; you need office furniture and supplies, advertising costs, and leasing monies. If you need financing assistance, visit the Small Business Association's micro loan section on its website and look for a lender. Micro loans are under $35,000 and require borrower collateral and personal guarantee. Interest rates range from 8 percent to 13 percent and are repayable over 72 months.
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Lease professional office space. Office space should ideally be no smaller than 600 to 700 square feet, and have enough room to accommodate a reception area, an office, and a conference room for first-time consultations and to host small workshops. Look for a space with an ascetically pleasing exterior facade and interior.
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Market your debt settlement business. Marketing costs will be the largest part of your debt settlement company's start-up costs. Use search engine pay-per-click campaigns, social networking site advertising, local newspaper and media advertising and flyer distribution to get the word out.
You can also contact local mortgage and real estate brokerages and ask to send them your company literature to distribute to clients who need your services.
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Build a referral network. When serving a client, offer them a small incentive to refer others to your debt settlement company. Give them a gift card for referring new clients. After obtaining referral names, send your debt settlement company's literature out and invite them in for a free consultation or to attend a free workshop.
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- Photo Credit bank statment and cut credit card image by Warren Millar from Fotolia.com
