Greetings from the great State of Alabama! Roll Tide Roll!!!
With my travels all across this great nation I have the honor of spending a great deal of time with the new generation of skip-tracers, and because of the current economic situation, I have seen an increase in the number of people leaving the corporate world and diving into the deep end of the pool: self-employment.
With this increase I get a lot of questions via email, Twitter, Facebook, and in person about starting a locate company. Too many in the industry who have had some success with locating humans with their current employer believe it will be an easy transition to run their own business. Well let me hurt your feelings up front and tell you that it is not easy and most will fail!
Now that I have let some air out of your tires, allow me to help you build your foundation by using my own experience in owning and operating a locate company, sharing what worked and what did not work for me. Trust someone who knows when I tell you, young Jedi, that I wholeheartedly advocate the concept of the mentor student relationship. I have been greatly blessed in my career to have had some of the smartest businessmen and women in the industry help shape my abilities and share their knowledge over the years legends such as Ron Brown, Millard Land Harvey Altes, Walter Gauntt, Joe Taylor, Sam Corolla and Jeanne Bennett to name a few!. In fact some of these lifelong relationships started with simple networking. I know this is a subject that some of you may have already heard me preaching about from up on my soap box previously, but there is nothing better for building relationships than a network of sources.
A mentor is a valuable contributor to the first part of your process: if you do not have experience in the field, get some! The most essential, basic education to become a tracer is the undiluted, face-to-face experience of working in the field. A mentor can work with you in this process to hone your interviewing skills, learn how to interpret body language, determine how to develop a network of sources, and so much more. Before you move forward with opening that office, I suggest you intern under a fellow skip-tracer for at least two years to gain this experience. In today’s fast-paced and competitive marketplace one simply cannot be effective and rise above the rest without having that old school knowledge along with today’s technology.
Speaking of old school…I suggest you take some writing classes along with some business classes, some of which are taught at free at your local library. You’re going to have to learn how to effectively write a complete and proper update for your clients, build a marketing plan, and a business plan. You’ll need to know the difference between a DBA, an LLC, a C-Corp or an S-Corp—which is best for you, and how to establish your chosen business entity. It is so much more than just having a phone, an email address, some business cards, and claiming that you are running a business. I ran my own company for 13 years, but it was only after I retired that I learned I never truly ran a business. I essentially ran a job, because I failed to do some of the things I am showing you here.
You will need to decide what type of skip-tracing you will specialize in: collateral location, fugitive recovery, asset location, judgment recovery or possibly something else. How will you invoice your clients: on a flat fee or on a percentage? If it’s a flat fee, will it increase if you are a 2nd, 3rd or 4th placement? If you’re billing on a percentage, your invoice would be on the value of the loan amount or sales proceeds, but this too has some pitfalls. You could work months on an account with a potential value of $20,000.00, yet when you locate the collateral or asset you might find an empty account, or a totaled vehicle of no value. Yet if you stick with this program, over time you can find it very rewarding. A combination of both is the best option in my opinion.
Now that you have your business entity created, and a billing plan, what about the clients? The customer base is any company’s lifeblood. Now everyone loves to have that much sought-after Fortune 500 account, sending you hundreds of assignments a month, but they too come with certain pitfalls: if they merge or get bought out by a larger client, or if a new manager comes in that has a pre-established relationship with another company, then you can count on being unceremoniously pushed to the curb and left on the outside looking in. I like to tell all the young owners to start in your local area. It’s where you can build a solid foundation, formed by the bonds of proximity and the resulting frequent interaction. People naturally do business with those that they come to know, and who share a common interest with. Over time if you take on a hundred lower-level, local clients, with each sending you a couple assignments a month, rather than just one large, distant client, then you have better security for your investment.
Oddly everything discussed here so far can be classified as part Stage One, so I will delve deeper into this subject matter again soon. Always remember: “Today is a Great Day to be a SKIPTRACER”!
Follow me down the path to better skip-tracing!
Be Blessed, Be Safe and Happy Hunting
Alex Price is a nationally-recognized expert on the Art of Skip Tracing and author of Skip Tracers National Certification Program with over 25+ years of experience in skip-tracing, collections and public speaking. Alex began his career with Barnett Bank as a field representative collecting past-due accounts. He then moved to World Omni Finance, where over the next ten years he worked in all aspects of collections and handling the nationwide charge-off skip portfolio.
Contact Info: firstname.lastname@example.org , Office: (972) 735-2353, Fax: (972) 735-2354