How to Start Up a Collection Agency
Collection agencies hold paramount importance at the moment as they play a vital role in collecting debts that people got from different organisations and individuals. At the present age of economic crisis, it has become problematic to collect debts timely from different people and the money lenders, whether organisations or individuals, hire different collection agencies for that purpose. Setting up a collection agency has become a business that is very successful at the moment. However, many people start collection agencies but fail to get any potential clients and end up in shutting down these agencies.
However, there are also many collection agencies that are making huge profits as they have worked hard and got potential clients including organisations and individual lenders. If you are planning to set up a collection agency then you have to follow many things which are essential for getting success in this business. You need to have a sound planning before making investment in setting up a collection agency. But if you do not have an idea of how to set up a collection agency, then this article is for you which will give you a perfect idea of how to make things streamlined without facing any problem.
Instructions
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1
First of all, you have to fulfil all legal requirements for setting up a collection agency. You should check the state obligations in this regard and complete all legal documentations which will help you in getting licensed without any problem.
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Different states have different laws regarding the set up of a collection agency and make sure you have complete information of the laws in this regard.
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Getting licensed will help you in contacting potential clients with confidence and they will also take interest in your services as you are running a business by fulfilling all legal obligations.
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You should advertise your collection agency in local newspapers and magazines. You should also use banners for advertisement of your agency and place these banners on busy places near your location.
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You need to create a website of your collection agency which should include everything about your services. Make sure you keep your portfolio updated in this website whenever you complete a task of collection money for any of your clients.
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You should keep your commission percentage low in the start of your business. However, you can increase your percentage of amount collected from the debtors when your collection agency becomes famous.
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After getting clients, you should contact the debtor and send a letter demanding the money. If he does not respond to the letter, then contact him after a few days. Keep sending letters with regular intervals until you get a response.
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If the debtor does not pay any heed to your letters, then you should send a letter with a warning to take legal action against him. In most cases, this letter resolves the problem and the debtor responds in a positive manner.
