Starting a new business can feel intimidating. We often hear about the failure rates shortly after discussing new business ventures.
Don’t let the numbers scare you.
According to the Bureau of Labor Statistics, 20% of small businesses fail in their first year. That means 80% succeed: the odds are in your favor. So, what are the majority of business owners doing to sustain themselves?
Why Some Businesses Fail
According to Investopedia, the primary reasons businesses fail include:
- Lack of sufficient capital
- Poor management
- Inadequate business planning
- Mismanagement marketing budget
Now that you know the common reasons why a business fails, how can you pinpoint the shortcomings and ensure that your organization will overcome them?
A lot of the work comes down to planning.
Starting a Business 101
As with any small business, launching a credit repair company takes strategy and planning. It’s recommended that you create a business plan which typically includes:
Executive Summary
This summary is a brief outline of the company's purpose and goals. The executive summary is more critical than you might initially think. A viable business is one that knows a customer’s problem and has an effective way of solving it. As you’re crafting an executive summary can you clearly describe, in one or two pages, how your business will solve a problem? Will your solution also earn you a profit? You must be able to answer yes to these firmly, otherwise, it’s back to the drawing board.
Business Description
The business description follows an executive summary. This portion of a business plan outlines vital details about your company like:
- Where are you located?
- How many employees do you have?
- What service do you offer?
- What are your company goals?
Market and Competitive Analysis
These analyses should take a quantitative and qualitative look at the market you plan to enter. For example:
- Do you know both the value and volume of your market?
- Which customer segments can you reach?
- Do you understand the buying patterns of these clients?
- Are there any economic barriers or regulations you need to be aware of?
- Who is your competition?
Did you know that 42% of small businesses fail because there’s no market need for their services or products? A market and competitive analysis will help understand the necessity of your product before jumping in. Although, with credit repair, there is always a need for informed and dedicated credit repair specialists!
Operations and Management Financial Projections
These projections should show how the business will grow—and how quickly. Proper financial forecasts should include operational and staffing plans that will help make your business a success.
Gather additional resources
Remember, you’re not the first small business owner. There is a plethora of free materials you can access to help guide your research and development phase. For instance, your local Small Business Administration is a great place to start.
If you’re specializing in credit repair, many resources can help you learn what steps you’ll need to take to add credit repair services to your business from experts in the field.
Getting Into Credit Repair
Credit repair is a great business to get into. Whether it’s an add-on to another industry like real estate or tax preparation— or you go at it as a unique opportunity— there is low overhead and a large market to serve.
Many business owners who go into credit repair build their clientele by:
1. Becoming a local authority
Becoming a local credit repair expert helps you build trust within your neighborhood, provides opportunities to educate your community, and opens the doors to becoming the go-to service provider in your area.
2. Defining a niche
Don’t chase after everyone who knows about credit. Instead, limit your scope for maximum impact. Maybe that means targeting people who have been recently turned down for mortgages and have a credit score between 540 and 620.
3. Constantly learning
The more you know about credit repair, the more effective you’ll be for your clients. The more effective you are for your clients, the more business you can drum up.
4. Starting your business from home
Operating from your home is a great way to lower overhead costs, which can help mitigate cash flow issues and provide more flexibility for you to customize pricing or practices for your clients.
5. Taking a credit repair course
Learn about different options you have to bring your credit repair business to the next level. Learn from seasoned experts who know the tricks of the trade.
Get the Support You Need
Credit repair technology has evolved dramatically over the last few years. When starting a new credit repair company, consider software that can support your business goals. For example:
- Business Software Integrations: The most robust credit repair tools have APIs that connect to your existing lead generation software, bookkeeping software, and CRM software.
- Automated Dispute Process: Credit repair service are especially valuable to clients who need to dispute items with the bureaus. It’s tedious work and requires consistent follow-up month after month. A service that eliminates the busy work from both sides of the table is a win-win.
- Affordability: The software you buy should not cut into your profits, find a tool to fit inside your budget.
- Affiliate Management Tools: Finding partnerships throughout your community is a great way to earn referrals. Rewards your affiliates by giving them a finder’s fee, initiated directly from your software.
- Scalable Growth Tools: As your business grows, ensure your tool maintains affordable user pricing, appropriate credit repair education, and an intuitive user interface that makes training and education simple.
- Good Reviews: Do your homework before jumping in. See what other superusers of the technology say about the program.
Many statistics that paint the picture of what it’s like to be a small business owner in the U.S., but there is one statistic that is most important. Small business owners make up more than 90% of the economy. Small businesses are a big deal. When executed with strategy, there is a fantastic opportunity for small business owners.
Ready to dive in? Learn more about starting your new credit repair company.
