Debt collecting company?? How to start

[hgtiling]

Hello people its been a long time since i have posted but i continue to read the forums on a regular basis. I already own a business which is doing reasonably well considering the state of the construction industry at the mo.I am getting itchy feet though and would like to try something new. As the title suggests i would 'maybe' like to try my hand at setting up a debt collection agency. I say maybe as i havent researched the idea in great detail as yet, am just trying to scratch the surface for a little information.
I have a small amount of capital to work with and already have office space in mind with minimal rent. Main questions are How do i approach the bigger companies ie - banks, with a view to purchasing debts from them? would there be a minimum spend so to speak? What kind of license would be needed to operate legally- costs?
I appreciate that this will not be some peoples cup of tea but id be interested to hear from anybody with any experiance in the field? Thanks in advance

 

[MorrisChesterfield]

Hi,

I saw a debt collection business for sale on daltons a few months ago, with clients already. Sounded a good business. It might be still on. Wether that would be of interest to you?

Ben

 

[Network Yorkshire]

We have a member looking for similar information though I think they were interested in collecting business debts etc...

Anyone with any help / advice or places to look that I can pass on??

 

[hgtiling]

Thank you Ben but my capital would probably not stretch as far as to buying an existing business, anywho id like to put my own spin on things from the start.

 

[C.J.Couriers Professional]

I started to think about opening a similar kind of business, but not exactly debt collection agency.

I would like to help businesses to manage their invoices, so instead of them chasing their payment, I would do it for them. I would call the companies that they have invoiced, ensure that everything is O.K. with the invoice, than call them 4-5 days before the payment date and ensure that the payment will go through.
Sounds simple but we all know how much time it costs. Do you think that it is a business idea that could make sense in these times? I could charge customers / fixed price per invoice.

 

[hgtiling]

I suspect there are probably quite a few businesses already offering this service as part of what they do already,its not a bad idea though considering the amount of invoices that are payed late, and the hassle involved in chasing them up. I would imagine that quite a few people would like that kind of service, the only downpoint being you would probably have to do quite a lot of them to make any decent money, as i dont think you wouldnt be able to charge that much per invoice.
Still looking for advice /info on how to approach banks and larger companies to buy bad debt from. If anybody has any experiance please get in touch.

 

[Feldon]

There was a thread about this quite recently on the franchise section, its listed under National Debt Advisors, there are however loads of this companies starting up now, but others I have come accross are Eurodebt (franchise, and cost about £20K), Debt Dr and a few others. If you go down this route make sure you find a provider who can help you give a whole of market solution to debt advice not just pushing the client down the IVA route or debt management.