With the economic crisis faced by the world today due to the COVID19 pandemic and the unstoppable rise of the cost of living, more and more citizens are sinking further into debt.
In situations when one is struggling to pay off multiple debts, that is when a debt consolidation specialist comes in handy. Customers who have been stretching their budget will need the help of debt consolidation.
The debt consolidation industry continues to be relevant and useful. Establishing a debt consolidation business will not only help consumers with overstretched budgets but will be very advantageous to yourself.
Here you will learn the crucial steps on how to start a debt consolidation company.
Table of Contents
1. Money Matters
While this business venture can make a good profit, you need to come up with an amount to cover the startup cost particularly if you intend to cover or pay for the customer’s debt.
You have the option to do a business partnership to finance the business or take out a business loan to cover the startup cost and ongoing consolidation activities.
2. Search Your Competition
Assess the current market and know your competition. How many debt consolidation companies are there in your locality? How saturated is the market?
Check your competitors’ websites to see customer reviews or the practices they have implemented in their businesses. Another option is to talk to the locals in the area where you will decide to put up the business.
3. Business Plan
Once you have done a research and feasibility study, it is time to make a business plan. Your business plan should include solid details on where you will establish the business, how you will run the business, how much is the startup cost, marketing, and advertising strategies, and such so you will have a reference for maintaining a business consistency plan.
4. Establish Your Fees, Licenses, and Permits
Check your state requirements for debt consolidation businesses. State laws may differ like some states will need businesses to have their accreditation and licenses ready before operation.
However, even if your state may have no laws covering debt consolidation, it is still best to secure the needed licenses and accreditations as third parties whom you will be working with may require this documentation. And of course, customers are more confident working with a company that is authorized and licensed.
5. Apply for a High Risk Merchant Account
Having a high risk merchant account is critical in supporting your debt consolidation business a success. This specific account will help you process debit and credit card payments. Through physical and online payment gateways, your clients have safe and secure means to pay.
Work with an experienced and reputable high risk merchant account processor to help you secure an account with the right tools for your business to grow.
These basic yet solid steps on how to start a debt consolidation company will be crucial in saving customers from piling debts. Although debt will always be around, debt consolidation can make a lot of difference in the lives of minimum wage earners and those struggling to make ends meet.