Business Overview

As the owner of a debt collection agency you’ll contact debtors and work with them to figure out a way of paying what they owe your clients. You’ll maintain a calm, patient demeanor and make the process as fair and stress-free as possible.

Who is this business right for?

You must be able to persevere and take rejection well. You’ll often find yourself in uncomfortable positions in contacting individuals who owe money and don’t want to pay. They might be hostile, embarrassed, frightened, or unwilling to talk to you at all, but you can’t be defeated by all of the negative attitudes you’ll encounter.

You should also have the sales ability to gain the trust and confidence of clients.

What happens during a typical day at a debt collection agency?

Here are several of the responsibilities you’ll most typically undertake on a daily basis.

  • Soliciting the debt collection business of companies who’ve extended credit to customers
  • Contacting debtors to encourage repayment on behalf of your business clients
  • Performing skip trace investigations to find debtors with little or no valid contact information
  • Collecting debtor payments and returning extended credit amounts (minus your commissions) to clients

What is the target market?

Any business that sells to other businesses or individuals by extending credit will have its share of non collectable debt. The company’s own credit department might be overextended or not adept at collecting challenging debt, and that’s when a collection agency like yours gets the call.

How does a debt collection agency make money?

You’ll charge your business customers a commission as a percentage of the financial amount you’re able to collect. This will be a smaller percentage for newer and easier to collect debts and a higher amount for old or particularly challenging debts or those that have unsuccessfully been worked by multiple collection agencies in the past.

What is the growth potential for a debt collection agency?

Businesses will always find themselves in positions where customers who’ve been extended credit are unable or unwilling to pay back. The most challenging of economic times will bring you more opportunities, but on the other hand hard times are when debtors are least likely to be able to repay.

The U.S. Bureau of Labor Statistics forecasts a six percent decline in the job outlook for Bill and Account Collectors between the years 2014 and 2024, but that could change if there’s an economic downturn.