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How to Start a Repo Business |
How to Start a Repo Business
Are you interested in starting a repo business? Do you need a sample repo service business plan template? Do you want to learn what it takes to run a successful repo business? If you answered YES to any of the questions above, then I advice you read on.
When people default on their automobile loans or fail to return rental cars on time, lenders and car rental companies need someone to help them retrieve the vehicles from those defaulters. This is where a repossession business (or “repo” business as it is commonly called) comes in handy.
A repo business owner either gets the car himself (usually when the defaulter is asleep or very busy to avoid resistance), or hires others to do the job. If you are not intimidated by potentially tense situations and have a talent for organizing, then starting a repossession business could be a lucrative option for you. This business does not require much training or related work experience.
Do you have what it takes to get started? Then read the following guidelines for starting your on successful repo business.
Starting a Repo Service – Sample Business Plan Template
1. Think twice
Before taking a plunge, you must think twice about your decision to start a repo business. Having the skills required for a business is one thing, and having the will to make a living with those skills is another thing.
Remember, as a repo business owner, your work will be to hunt down people with financial problems or people who want to play smart with rental companies, and then take their cars when they least expect it. You may have the required skills, but not the temperament or will to do this for a living.
2. Get experience
Before starting your own repo business, you need to acquire experience. In fact, some states or countries require that individuals seeking to start a repo business have one or two years of experience. You can get this by working for an established repo agency.
Even if it’s not a licensing requirement in your state or country, acquiring experience as a repo agent before starting your own business will help you understand the challenges that come with the business and how to overcome those challenges. It will help you avoid all pitfalls that inexperienced repo agents are likely to fall into. And it will shorten your journey to success.
3. Complete the necessary paperwork
Check the laws that govern repossession business in your state or country, and fulfill all licensing requirements. Some states or countries require that you complete a training program or acquire some experience before starting your own repo agency. You need to contact the appropriate agency in your state or country to find out what rules and requirements apply.
After fulfilling all licensing requirements, you should apply for your license and pay the required licensing fee. Obtaining your license means that you have been cleared by the state to launch your own repo business. You also need to register your business with the appropriate agency.
Missing one or more aspects of the required paperwork can cause big problems in future. So, if you need help with this very important step, contact a seasoned attorney or business consultant.
4. Find a location
One of the downsides of the repo business is that it requires wide space for keeping repossessed vehicles temporarily, and so can hardly be operated from home. So, you need to purchase or lease commercial space for both your park and office.
5. Purchase needed equipment
First, you will need office equipment, such as a desk, chairs, filing cabinets, business telephone line, and a computer. You will also need security devices and systems, such as surveillance cameras and security alarms.
In addition, you will need to purchase repossession equipment, such as trucks. You can have just one truck for a start, but having two or three ensures that you can repossess different types of vehicles and hire employees to help you. While hook and chain tow trucks are good, flat beds and wheel-lift tow trucks are better for repossessing large automobiles and avoiding damage to vehicles.
6. Hire employees
You need to be very careful when hiring employees to work with you. You need to ensure that they can remain calm and in control even in difficult and frustrating situations. Check each employee’s background and provide adequate training.
7. Market your repo business
Send direct mail adverts to auto loan companies, car dealers, car rental agencies, banks, and other lending institutions. Create a website for your repo business and advertise in local newspapers.
Sometimes, personal contact is more effective than other traditional advertising methods. Use cold calling techniques and arrange meetings with owners and managers. Other smart marketing strategies include online marketing (social media, search engine optimization, etc) and taking advantage of networking opportunities to spread word about your business.
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