The following was written during the 2007-2009 collapse of the economy.
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Dan Meeks wrote:
The Repossession Industry seems to be constantly in a pattern of growth. I see an
influx of new people seeking to make their fortune here. Many TV viewers perceive this
business as ‘easy money’. But how many in this business are actually good business
people ? How many know the average expense involved picking up a single unit ?
To the seasoned Agency owners… the nightmare of trying to make sense of the
constant decrease in compensation along with a steady increase in most expenses
continues. At the same time what we are expected to provide also keeps growing.
Camera systems and on-site auction services are examples of relatively new requests
that could morph into demands. These demands promise compensation.
Compensation that doesn’t come guaranteed and certainly doesn’t come without
investment.
As new comers vie for our client’s business with bids for services that slice away at
profitability… even new services stand to fall victim to reduction in acceptable fess.
Clients endlessly demand more from us than we can afford to give.
The tide continues to change as a major auction company that also provides
repossession ‘forwarding’ services has acquired the industry’s largest software
company along with an on-repo-lot auction platform. It doesn’t take a genius to see
that a new push to get between the repossession company and their direct clients is
underway. This time hundreds of repossession companies are paying monthly fees and
continuing to voluntarily participate in a calculated effort by their worst competition.
Competition that will expect you to continue to do the work and foot the bill… while
they stand in the middle, dictate what you will change and suck away much of your
profit.
This is not ‘chicken little’ philosophy folks. This is right in front of you and is not
deniable.
It’s my goal to present some input from others on how to survive the constant
correction this industry seems to go through. Clearly I love what I do personally to
stay profitable. We strive to keep business expenses down and not accept work at a
reduced rate even with a promise of a lot of assignments. However, my own philosophy
may vary greatly from the guy down the street. I prefer to keep the quality of our work
product high by only hiring the best I can find and paying them more than my
competition.
Max Pineiro wrote:
There is no doubt that we are living through one of the toughest times our country has
seen. All industries have been affected and hundreds of thousands of companies have
seized to exist, many of them filing the dreaded BK. In our industry many have been
defeated by debt and the decrease in work. However, if you take a close look you will
find that every industry, including ours, has companies that have not only survived
but have actually grown and prospered despite the economy. An even closer look will
show that these successful companies all have common denominators. Unfortunately,
those that have failed also share their own common denominators. I have many
friends, in many different industries, that have owned businesses. Some have
prospered and others have closed shop. Those that have prevailed have made
decisions that I have taken notice of and will share with you :
- Companies that have succeeded all have clear written goals/plans and they do not
deviate. Those that have lost were running on auto pilot with the wrong heading. In
other words, had no goals and were reactive rather than proactive. - Those that succeeded never focused their daily thoughts on how rough the economy
was but rather were seeking opportunities that are only found in down economies.
Those that failed were too busy focusing on the work that was lost, the real estate
meltdown and everything else that had nothing to do with their business. In other
words, they were focused on the problem and not the solutions. - Those that succeeded were not worried about cutting expenses and downsizing as
they had practiced maintaining expenses in check during the good times and living
below their means. Those that failed were in for a rude awakening when the economy
collapsed. The good times were filled with over spending and allowing expenses to get
out of control. - Those that succeeded never stopped prospecting and marketing their businesses
due to their focus on their goal and mission. Those that failed seemed to forget that
prospecting and marketing were part of the ingredients for success and were waiting
for things to just sort themselves out. - Probably the single biggest common denominator that the winners had in common
was that they somehow found a way to get excited about their business. They got as
hungry as they were when they 1st started their business. Most importantly they were
successful in transferring that excitement and hunger to their management staff and
eventually to every employee. Those that lost had no motivation to continue and that
attitude was transferred to a management team made up of defeated mindsets. This is
a confirmation that attitudes are indeed contagious.
Every single one of those points can be directly linked to the successes and failures in
our industry or any industry for that matter. It is no secret that the majority of
business owners in our industry are great repossessors and some even great skip
tracers. Unfortunately, many have no clue how to run a business. This is evident
when agency owners agree to work at substandard rates because prospecting new
business is just too hard to do. There is work out there. There are clients in our own
back yard that we never heard of. We can either sit back and wait or go out and get it.
I do not know of one single business that has ever failed the owners, but I know of too
many owners who have failed their business.
Kevin McCann wrote:
Holding the line on pricing is the only way to have a high-perceived value. With many
repo businesses continuing to struggle financially, owners are making hard decisions
on what fees to accept. I suggest that those Clients who do retain TFA members have
come to see the value of your work, which is why they remain Clients. For price
cutting operations they are setting their perceived value low whether they want to
admit to it or not. Despite their financial woes, they often find Client businesses
interested only in the bottom line-they want to pay the lowest fees or use the cheapest
alternative company and not the best choice of Repossession Company. Again, it is a
question of perceived value. There is always going to be other repo businesses that
provide a cheaper service, but an astute Client will find the quality of service is lower
and the recovery rates are lower and in the long run, the overall cost to the Client
business will be higher. It is unfortunate that some individuals find this concept
difficult to comprehend upfront. However, it is fortunate for those who hold the line on
fees and weather the storm.
Ron L. Brown wrote:
Albert Schweitzer, winner of the Nobel Peace Prize in 1952, is quoted as saying, “An
optimist is a person who sees a green light everywhere, while the pessimist sees only
the red stoplight. The truly wise person is colorblind.” I think those words ring true
today in the recovery industry as I see many who just keep on speeding through those
green lights by buying and spending and hoping against all hope that their efforts will
produce business while I see others who are cutting costs, parking tow vehicles,
boxing up cameras and laying employees off. I personally think the ones who are color
blind will be the last ones standing. These business men and women understand basic
and elemental finance…do not spend more than is coming in and continue to be
proactive in soliciting business. I had a close friend in the insurance business who
sold a million dollar policy to Walt Disney…how did he do it??? he called Disney
Studios over one hundred times asking for Mr. Walt Disney…he did not see the red
light, he did not see any green lights…what he did see was the brilliant light at the end
of the tunnel. That should be the light we all see…the light of continued success by
helping each other, by getting and holding on to clients through unsurpassed service
and professionalism…and by calling on that client that says “NO” again and again and
again.
Paul Bukur wrote:
Many old time reputable Repossession companies are closing their doors across the
country. They cannot do business if it is costing you more to do repos than your basic
costs are. They have been working for free for way too long. The lenders day of
reckoning is fast approaching when they have to go get their own collateral. Mainly,
because of them dictating how much they will pay and what they will not pay for. I
personally say, good luck to them and have fun. Insurance keeps going up, phones
and fuel is out of control and storage lots are not cheap. Sell them the property and
they can buy them too. That way they can have free storage all they want. The
Forwarding Companies can learn how to get collateral also. Or better yet, they can
rent the lots from you at going rates. What do you all think? Someday, the Industry
will return to a rate that everyone can make a living with. But, it looks like it has to
collapse before that day will come.
