Automobile Repossessions is a great small business niche in these times. The following is a step-by-step beginner's guide in starting an auto repossessions service.
Step 1) Go to your county clerk's office and get your business license, open a business bank account, purchase liability insurance (at least $500,000 worth), and set up your home-based repossessions office with a computer, fax, printer, business line, and credit card machine. It is preferable to take credit cards as your primary source of payment because once you have a credit card on file, you don't have to wait for a check in the mail or send out a bill. Caveat: Make sure you have the company you are withdrawing funds from sign a payment plan allowing you to do this.
Step 2) Purchase a tow truck or decide if you want to contract out a towing company to do the auto repossessions.
It's better to have your own tow truck as this will add value to your business. Tow trucks are not cheap so be willing to cash out $40,000-$50,000 for even a used one. On the other hand, contracting out the auto repossessions to a towing service will cost you 50% of a sale.Step 3) Hire Operator(s) to work for you. Get your W-9 (or W-2), independent contractor (or employment agreements), non-compete agreement (complete with a liquidated damages provision), and background check verification form. Background checks typically cost about $25 per background check but are necessary--do not hire someone with a felony history. Since you are running your business from your home, conduct the interviews at a restaurant, library, or coffee shop. Make sure to check the references on the applicant's resume.
Step 4) Start marketing your auto repo business. Here are the demographics you want to market to:
a) car lots, b) car loan businesses, and c) banks. You need to Google these businesses in your region and set up meetings with those officers within each company who are in charge of auto repossessions. At that meeting, ask for their business; at the least, leave a professional business brochure and keep in touch with them.
Step 5) Set your rates. I wouldn't charge any less that $150 for doing an auto repo. If it's repeat business and a great contact, cut them a discount.
I'm a professional how to business book writer. In researching the repossessions business, I have found that the preceding 4 steps are a great beginner's guide in starting an auto repo business. For more information on starting a repo business, check out the resource box below.
How to Do Auto Repossessions