If you’re looking for a business with high earning potential, consider starting a repo (repossession) business. A repo business is one in which you recover and resell assets that have been repossessed by banks or other lenders. There are a few things you’ll need to do to get started, but it’s a relatively easy process.
Here are the 10 steps you can take to get started on building your very own repo business.
10 Steps to Launching a New Repo Business
1. Choose Your Type of Repo Business
The first step in launching a repo business is to identify the type of repo business you want to launch. You might choose from the following types among others:
Auto repossession: This type of repo business specializes in the recovery and resale of vehicles.
Heavy equipment repossession: This type of repo business focuses on recovering and reselling construction equipment, agricultural machinery, and other types of large machinery.
Residential repossession: In this type of repo business, you’ll focus on recovering and reselling homes.
Learn more about the types of repo businesses.
2. Name Your Repo Business
Give your repo business an identity so people will think of it as a well-known and respected brand. You can take the name of your repo business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your repo business is to make it sound appealing and trustworthy so people will want to do business with you.
3. Determine Your Repo Business Model
There are several possible types of business models for a repo business including:
- Owner-operator: You’ll be the only employee of your repo business.
- Franchise: You’ll purchase a license to operate under an existing brand name.
- Network: You’ll join forces with other repo businesses to form a network that will enable you to offer services in multiple geographical areas.
No matter which model you choose, make sure that it aligns with your business goals and the services you offer.
4. Choose a Legal Form for Your Business
By incorporating your repo business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.
The business structure you choose for your repo business will determine the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common repo business structures.
5. Write a Repo Business Plan
All repo business owners should develop a business plan.
A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.
Read our article about how to write a repo business plan.
6. Apply for the Necessary Permits and Licenses
There may be required licenses and permits you need to obtain before launching your repo business.
You must also register your repo business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.
Read our article about obtaining the proper repo business licenses.
7. Determine Your Budget & Apply for Funding as Needed
In developing your repo business plan, you will figure out how much funding you need to start and grow your business.
If you have your own funds to invest in your repo business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your repo business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.
Read our article about the costs associated with starting a repo business to help you determine if funding is needed.
Read our article about how to fund your repo business.
8. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your repo business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues.
You may also want to invest in software that helps you manage your inventory and/or track your vehicles.
Repo businesses also need a towing truck, which can be expensive. You may want to consider leasing a truck instead of buying one outright.
Read our article about the technology and software you need to run a repo business.
9. Market Your Repo Business to Potential Customers
Before you start selling your services, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.
After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the repo industry through social media and blogs so they can help share your business.
You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Repo businesses should consider the following promotional strategies for which you should start getting prepared:
- Treating current customers well so they give you referrals
- Attending trade shows
- Participating in online directories (like Google My Business)
- Paying for online and offline advertising
Read our article about how to market your repo business for more tips.
10. Get New Customers & Grow Your Business
When you promote your services, you’ll start to get interest from potential customers.
Make sure you’re ready to serve these customers. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your repo business.
Read our article about how to effectively grow your repo business to learn more.
Starting a Repo Business FAQs
Why Start a Repo Business?
There are many reasons why you might want to start a repo business. Maybe you’re interested in the industry and think it would be a great business to get into. Or maybe you have experience working in the repo industry and think you could do it better yourself. Whatever your reasons, starting a repo business can be a great way to earn a good income.
What is Needed to Start a Successful Repo Business?
In order to start a successful repo business, you need to have a strong understanding of the repo industry and how it works. You also need to have a well-developed business plan, access to funding, the right technology and software, and a solid marketing strategy. Moreover, you'll need to purchase the right equipment.
How Can I Start a Repo Business From Home?
You can start a repo business from home by following the steps outlined in this article. First, you'll need to develop a strong understanding of the repo industry and how it works. Next, you'll need to create a well-developed business plan. Then, you'll need to secure funding for your business. After that, you'll need to acquire the right technology and software. Finally, you'll need to put together a solid marketing strategy.
How Can I Start a Repo Business Online?
To start a repo business online, focus on establishing an online presence. Start by creating a website. Then, promote your website through social media channels and online directories. Additionally, consider paying for online advertising. Finally, make sure you have the right technology and software in place to run your business effectively.
Plus, allow clients to book your services online.
What are Some Tips for Starting a Repo Business?
Here are some tips for starting a repo business:
- Develop a strong understanding of the repo industry and how it works.
- Create a well-developed business plan.
- Secure funding for your business.
- Acquire the right technology and software.
- Put together a solid marketing strategy.
- Focus on establishing an online presence.
- Promote your business through social media and online directories.
- Pay for online advertising.
- Make sure you have the right technology and software in place to run your business effectively.
- Allow clients to book your services online.
Where Can I Find a Simple Checklist for Starting a Repo Business?
A simple checklist to use when starting a repo business is as follows:
- Choose Your Type of Repo Company: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
- Name Your Repo Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
- Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
- Determine Your Repo Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
- Write a Repo Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
- Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
- Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
- Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
- Market Your Repo Business to Potential Customers: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the services they truly need.
- Get Customers & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your services.
Summary
Starting a repo business requires a commitment, but with the right planning and execution it can be a successful venture. Research the market, get the necessary permits and licenses, and market your business to potential customers. With the right tools in place, you can successfully start and grow a repo business.