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Small_Business_Collection_Agencies_Get_You_Paid
| Small Business Collection Agencies Get You Paid
If you'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.
Small Business Collection Agency Services: More Benefits than
Costs
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
you’ll save, will more than pay it back. In fact, when you
consider the hourly rate of your employees, or you yourself,
collection agencies’ 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’s the opportunity cost: $150 worth of time you
haven’t spent in growing your business. So the net loss is $300,
and probably more if you’re a profitable business that gets a
good return on your people’s time.
But if you refer your delinquent debts to a 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 couldn’t have collected on your own, the return on
investment is huge. That’s not even counting the saved
opportunity cost, or all the stress you’ll 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.
About the author:
Joel Walsh writes for Collection Agency Information:collection agency
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