How to hire a
Small Business Debt Collection Agency
Does the term ďebt collection agency put you on edge?
If you are re like many small business owners, the mountain of debt you accumulated during startup might have been enough to make you worry about collection agencies every time you answered the phone.
But your feelings toward collection agencies are eventually going to change, if they haven't already.
While no one wants to hire a small business collection agency, itís a sad reality of doing business that not every customer feels the need to pay, or has the ability to pay all at once. If you want to stay in business, youíll need to collect that money.
When your most polite and not-so-polite reminders to pay have failed, youíll need to start getting serious, which means going to collection agencies.
Professional small business collection agency services will certainly cost more than just writing letters demanding your money back. But the amount of money you'll collect, not to mention the time youíll save, will more than pay it back.
In fact, when you consider the hourly rate of your employees, or you yourself, collection agenciesí fees really can be quite a bargain.
Let's say you have an assistant your business pays $10/hour, effectively costing your business $15/hour once you count in employment taxes, benefits, and the overhead of your office.
You would be lucky if that assistant spent just five hours total on each debt, and managed to collect half of them. But you would have sunk $150 into each successful collection.
Plus, there is the opportunity cost: $150 worth of time you havenít spent in growing your business. So the net loss is $300, and probably more if youíre a profitable business that gets a good return on your peopleís time.
But if you refer your delinquent debts to a small business collection agency for $75 each, and they collect three-quarters of them, you've invested only $100 per debt collected.
Once you factor in all the money from all the debts the agency collected for you that you couldnít have collected on your own, the return on investment is huge.
That's not even counting the saved opportunity cost, or all the stress youíll save yourself and your associates.
In the end, your small business has to focus on doing what brings in the money: your core business. Leave your taxes to your accountant, your office repairs to your building manager, and your collections to your small business collection agency.
If you have a small business, medical practice or facility, and you have customers, clients or patients that are not paying you within your stated terms - you might need the services of a small business collection agency.