In a struggling economy a New York repossession business can do quite well. As more and more people tighten budgets, some get behind on debts as payments move to the back burner. When that debt involves a piece of personal property, such as an automobile, the creditor (such as a bank or rent-to-own center) will repossess the item. That’s where a repo business comes in – the repo man picks up the property and delivers it to the creditor.
Determine what type of business entity you want for your repossession service, such as a corporation, sole proprietorship, partnership or limited liability company. (See Resources for more information).
Decide on the name you want for your New York repossession business. Check to see if that name is available by searching the New York State Division of Corporations Business Entity Database (see Resource). State law requires the name you choose to be distinguishable from names used by other registered businesses.
Access the Internal Revenue Service website (see Resources) to apply for an Employer Identification Number (EIN). This number creates a separate tax-paying entity and allows use of something other than your personal social security number on registration forms, business checking accounts and business tax filings.
Download the appropriate forms from the New York Division of Corporations. The References link below provides access to all of the forms, and the form you use depends upon the type of business entity you plan to create. Fill out the forms and submit them according to the provided application instructions.
Apply for a Sales Tax License with the State of New York if, as a part of your repossession service, you provide clients with temporary storage services for the items you repossess, including automobiles. You can access online applications through the New York State Online Permit Assistance and Licensing (OPAL), available in the Resource section below.
Research your competitors. Find out their prices, the services they offer and information about their customers. This gives you a heads-up on how to be competitive and obtain new clients.
Contemplate what services you will offer. For example, you can specialize in automobile repossession or expand your services to pick up furniture, appliances, boats and even farm equipment. Then determine the charges for each service. According to Thomas Investigative Publications, the average service charge for recovering a vehicle is between $150 and $250 for up to 30 minutes of work.
Obtain the equipment needed to run a successful New York repo business. A large pick-up truck is functional but something with towing capabilities would help, considering that vehicles are the most commonly repossessed items. You may need a moving truck for picking up several larger items such as furniture and appliances in one day. If you plan to hold items for later delivery to the client, you may also need a storage facility.
Look into leasing or renting office space for your New York repo service if you plan to have employees who work on several jobs throughout the day. Running this type of business out of your home is possible, but an office will help you to stay organized and keep the business separate from your personal life.
Promote your business to banks, lenders, car title loan companies, revenue offices and rent-to-own centers. Visit potential clients in person because representatives are more likely to listen to the services and prices you offer. Have a price list available to show them.