We can read from the newspapers and even see the news on the TV, the news about the economy is just rotten. We’ve gone through the credit crunch and that hasn’t let up, we now have to contend with a recession that many experts are calling “the one we remember”. The department of labor has just published a report recently that stated that 2 million people have lost their jobs since last year. Another 4 million are set to see their jobs too before the economy returns to normal and this could be anywhere from 5 to 10 years.
One of the most obvious knock-on effects of the slow economy and the credit crunch leading to it is that the availability of bad credit loans has all but dried up. Another consequence is that many people are finding that their credit rating has actually dropped when compared to before the recession. This can be explained by a few things, namely credit limits have fallen dramatically as financial institutions tighten their belts. This combined with customers holding onto more debt for a longer time all leads to a less healthy credit score card.
The thing is, it is actually a boom time for companies that want to cash in on the bad credit repair industry. The number of Americans who have dropped into the category of having a “bad credit score” has increased substantially. Initial reports suggest that the number now sits at a very respectable 70 million people who have a bad credit history that needs bad credit repair services. This is set to rise quite dramatically as more people receive bad credit reports. It is because of this that this sunshine industry is one of the hottest places to start a business in now.
The strange thing is that there hasn’t been the large flock of entrepreneurs setting up shop to take part in this increase in bad credit repair demand. We took a look at the department of statistics figures on license applications and we found no meaningful difference between the numbers of new licenses now compared to a year ago. It is because of this that we can say that the market is indeed very open for new entrepreneurs. Just to add more spice to the pot, the money is also very good. The average bad credit repair case will cost the client anywhere from $800-$1200 and you can even charge a whopping $2000 is the case is particularly bad or complicated.
With just a changes and automation you can easily handle double the amount of cases per month. Automation enablers like websites, automated answering machines, emailed forms etc can all add up to very significant time savings so your team of workers and managers can put their time to better use. These investment items for automation however do cost quite a bit and it required entrepreneurs with some foresight to actually be willing to put the money down. There are a huge number of process improvement kits available that can help handle clients and paper-flow much better than if done manually. This is generally where the shortfall of new bad credit repair businesses comes in, the lack of foresight to invest in process improvement measures to build capacity.
In terms of marketing we feel that many entrepreneurs fail to recognize the benefits of traditional advertising channels like the radio, newspaper or even direct mailing. Research has shown that people often turn to classic media to search for things that are important. Bad credit repair certainly classifies itself as important and you’d be surprised the number of people looking for these services in traditional media. On average the cost of sale using traditional media advertising and marketing is about $200 per client. This means anything on top of that you will earn. As a gauge of how successful your campaign is, the average lead generation ratio is about 2-4%.
As with any service industry, the relationship that you build with your client is very important. When you are scaling up your business you must never forget to have that personal touch with your clients. Often times that is the only thing that will set you apart from other cold large institutionalized bad credit repair providers. Current customers are much better for selling “upstream” as there is a high chance that they will also need other financial services or professional advice. Smart business operators will cultivate a good standing long term relationship with associated businesses that can provide referral business. These related businesses include lawyers, bankers, brokers, real estate agents and other professionals who can refer their customers to you.
The bad credit repair industry is awash with new demand that we think will not taper off anytime soon. The trend is for people to get their credit rating into progressively worst state over time. This means and ever increasing number of clients for your. The demand was heightened significantly by the current recession and only shows the future potential of the industry. We feel that investing in the credit repair business is a very wise move that any entrepreneur should seriously consider.
Simple bad credit repair solutions for those that do not have the benefit of a professional to help. Simple tips and tricks so you can get your bad credit score back to normal.