The Requirements For Starting A Debt Collection Agency
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In case you are thinking of starting a debt collection agency, you need to first think whether you have the wherewithal to do what it takes. You must also have an aptitude for the job and certain traits. You also need the required capital and a place from where you will conduct your operations. You need to plan out every aspect before you finally decide to throw your hat in the already crowded ring.
Planning for such an enterprise would first include questioning yourself why you want to make a start in a debt collection business and in what way are your talents suited for this business. The first prerequisite for this business is oodles of confidence in your ability to manage the debt collection business. The second prerequisite is the capital for starting the debt collection business.
The third requirement is the establishment of connections with businesses that have huge sundry debtor receivables. Your acumen to market your way through bagging debt collection contracts from them also counts a great deal. The fourth such requirement is an idea about the competition you are faced with from existing established collection agencies in the vicinity.
The fifth requirement is setting up a place from where to conduct your business and installation of all the equipment that you will need to conduct your business smoothly. The equipment will include computers, a server, networking devices, cables, power devices, phones, Internet communication equipment inclusive of a dish antenna for connecting to satellites, and microphone attached headphones. You will also need debt collection business software and office furniture and hospitalities.
You will need to hire the best staff who will work as collection agents in your office. The most important trait that you must look for in your recruits is perseverance, patience, and an ability to remain cool on the phone when facing abusive language from debtors.
Along with such traits your employees must have the necessary knowledge about computers and very good communication skills. They must love to work for long hours in a BPO (business process outsourcing) environment in night shifts too if required. Another skill they must have is a good typing speed and lots of tact when dealing with aggressive debtors.
Other requirements will include knowledge of the law related to debt collection including the FDCPA (Fair Debt Collection Practices Act). Here is a good article on Consumer Rights as it pertains to debt collection. You as the business entrepreneur must also have exceptionally good management skills in the area of finance and accounting, human resources, human behavior, and social networking. You will also need a good lawyer, who can fight on your behalf cases that may arise because of disputes with debtors, creditors, or employees.
So, think of all these aspects and based on your assessment you can then finally take the decision of starting a debt collection agency. Do not forget to decide a profitable contingency fee structure which you will charge from businesses on whose behalf you will collect debts.
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ABOUT THE AUTHOR
Sanjesh G. Reddy is a writer for a number of websites, including Recovasset.com, Communicationability.com, Reportviewers.com, and Scribemed.com.