Perhaps the most common mistake when starting up a new debt collection business is not knowing the costs and rules involved in opening a collection company in your city and state. Several businesses will fail before they even get started because they are ready to open their doors, but are unable to open them because they are waiting on licensing specific to their particular area. Make sure you research your local and state business rules for opening a collection business. Oftentimes, there are new business processing fees and taxes that will need to be paid prior to being able to open your doors. These rules and fees differ from state to state and even in some states from county to county or city to city.
Check with your local chamber of commerce, business development center, or elected county officials to determine the rules and regulations required in your area. Make a list of the fees, taxes, and licenses that will be required to start your business. Sometimes just changing the physical location or getting creative with the zoning of your business could save you hundreds of dollars. It may also be worth your time to also check with other municipalities in the surrounding areas to see if changing your place of business would be financially beneficial to your new start up. Finally, don’t overlook expenses like business insurance, key man insurance, and appropriate business licenses to protect your assets and investments.