Ask the Experts: Finding Clients for a New Collection Agency

Ask the Experts is an interactive section where readers can ask direct questions to the experts at Kaulkin Ginsberg, the leading strategic advisors to the ARM industry — and a sister company of insideARM.com — as well as other seasoned industry executives.

Question: How can I find local clients for a new, small collection agency?

Answer: (From Michelle Dunn, founder and president of Never Dunn Publishing, LLC.)

I would suggest joining your chamber of commerce, this will give you a list of other members who are normally business owners who may be in need of your services.

Also, look in the phone book in your area and in the help wanted pages of your newspapers. If a company is looking for a credit manager or A/R clerk they may need a collection agency. You can also advertise in trade publications or publications that you know creditors are reading, also in your local papers for local business. Networking is another way to get your company name out there and asking existing customers for referrals.

Focus on industries that you have experience in, you and your collectors want to be very familiar with whatever industry you are collecting on. This will help you to obtain clients in that industry and you will collect more money for them because you will know the ins and outs of that particular industry.

For example, if you choose heating oil accounts to focus on, maybe you know how deliveries, minimum deliveries, Community assistance and service calls all work in that industry. Oil companies will feel more comfortable placing accounts with you if you are educated about this industry than with an agency that collects on anything and doesn’t have specific knowledge about that industry. This will also help you collect more money because when the debtor gives you an excuse or complaint, you may have an answer right away because you are educated and be able to close the call with a payment rather than saying, I don’t know and calling your client to find out and trying to get back to a debtor which decreases your chances of getting paid as quickly.

Michelle Dunn is the author of Starting a Collection Agency: How To Make Money Collecting Money. She has over 21 years experience in credit and debt collection. She is also a writer, publisher, consultant, published columnist and the author of many books on the topic of credit and debt collection. She is also the founder of Michelle Dunn’s Credit & Collections Association.