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.
Joel Walsh writes for Collection Agency Information:http://www.collection-
agency-information.com?%20collection%20agency [Web publication
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