A repossession business operates by obtaining goods from individuals or companies who are unable to pay their debts, loans or other financial obligations. The repo company secures the assets on behalf of the bank, government or main lender. The bank or local government may then resell the items or put them up for sale at a public auction. Starting a repo business in Wisconsin requires detailed knowledge of the business climate in your city or town. Repo companies may find more success in bigger cities such as Madison or Milwaukee.
Things You Will Need
Create a business plan for your repo business. Choose a clear target market such as banks, government offices, or companies who lend money. Also include an analysis of the competition. Research your city and list the number of repo companies already in existence. Call a couple of them to get pricing information and compare their rates. Badgerland Auto Recovery Inc is a major auto repossession company in Milwaukee, and you can reach them at (414) 529-0260. In Madison there's Wisconsin Auto Repossession, and you can reach them at (608) 242-9201. Also include financial projections and how much you will need to get started. Usual start-up costs will include the cost of vehicles, insurance, building or renting a place, and licenses to start operating. You can start this business in a small scale with less than $10,000 (as of September 2010).
Secure financing. Contact your local branch of the Small Business Administration (SBA) for free guidance during the funding process. Use your business plan to pitch the business idea to lenders and investors. You should plan to cover the operational expenses for at least the first year. The SBA can help you polish your business plan and presentation to get it ready for investors. You can also contact the Wisconsin Small Business Development Center at 1-800-940-7232. The Wisconsin District Office of the SBA is located at 740 Regent Street, Suite 100 Madison, WI 53715. You can reach them at (608) 441-5263.
Set up a location for your services. Contact your local government in Wisconsin for zoning regulations regarding a repossession company. If you're specializing in vehicle repossession, there might be additional restrictions regarding the location such as ample parking space and storage facilities. For other types of repo businesses, you will need safe storage facilities and vehicles to move the products back and forth. As a repo business, you will not need a storefront or commercial space in highly trafficked areas. A simple warehouse space will be enough to start.
Register your repossession business with the State of Wisconsin. You can start your business as a sole proprietor, corporation or limited liability company (LLC). LLCs in Wisconsin can file their registration electronically through the Wisconsin Department of Financial Institutions website (link under the resources section of this article). The filing fee is $130 (as of September 2010). Also get an Employer Identification Number (EIN) from the IRS.gov website if you're planning on having employees.
Obtain insurance for all your vehicles, equipment and employees if you have any.
Market your services and build networks. According to the New York Times, the number of repossessions nationally is expected to slow through 2012 because new car sales have slowed and banks are tightening lending standards. This means stronger competition in this business, and new repo business owners should place a lot of emphasis marketing and advertising their services. Contact local banks and lending companies and let them know about your services. Offer low introductory service rates to start building relationships with the major repo job providers in the area. Leave them your business cards with contact information. Join your local chamber of commerce to network with other repo companies and discuss marketing strategies. Build a simple website explaining your services and include rates and contact information.
Pay close attention to trends in the economy as economic downturns usually mean more repossessions.