Having a clear plan for starting a debt collections agency is very important in order to see it prosper. There are multiple facets that have to be considered, but if there is adequate planning, you will be able to start a successful agency. Here are the steps as to how to accomplish that.
As the popular saying goes, if you fail to plan, you are planning to fail. Before you start a debt collections agency, you need to work out the specifics and consider some important questions.
Some of these considerations include the name of your business, how long it will take for you to break even, the startup and ongoing costs as well as your target market. Some of the expenses that you will have to financially prepare for include transportation, office equipment, office rent, legal insurance and marketing tools.
Form Legal Entity
After you’ve gone through the preliminary planning phase, the next step is forming a legal entity. What does this entail? The reason you want to form a business entity because you will not be personally responsible in the situation that your agency gets sued. You could basically view it as a way of making sure that your bases are covered.
One other thing to consider is to use a registered agent service for privacy purposes. For most small businesses, LLC’s are great options. You can visit Pacific Collection Group for further resources on what may be needed.
The next step in forming a debt collections agency is to register for a variety of federal and state taxes before you can open up for business. You need to apply for an EIN (Employer Identification Number). Fortunately, this process is not only simple, but it is free of charge. This can be done through the IRS website.
Open a Business Bank Account
For the sake of asset protection, you will also want to create dedicated credit and business banking accounts. If you make the mistake of mixing in your personal and business accounts, you will be risking your personal assets if your business faces some legal trouble. Within the business world, this is also known as piercing your corporate veil.
Take Care of Legal Matters
In order to start up an agency, there will be a series of things that you need to operate. One such thing is to get the necessary licenses and permits to run the business. Otherwise, you may facing hefty fines that you’ll have to pay.
Insurance is also highly recommended for business owners of any capacity. If you plan on hiring workers, you may also want to consider workers compensation insurance as a legal requirement.
Define Your Brand
No that you have the essentials to start a business, the next step is to define your brand and establish an online presence. In order to promote and market your agency, you will have to pitch businesses over the phone or through personal communication at networking events. Pacific Collection Group is one such resource that can be used for further pertinent information