When considering starting a credit repair business there are many questions you need to ask and get answered. It's very important to choose the right credit repair business model to satisfy your needs, goals, and perhaps even limitations. I mention limitations because few of us come into a new business totally prepared with every skill set and requirement necessary. In most cases, only after we are in business do we realize certain elements that are required that we didn’t beforehand.
There are actually 3 different business model types in the credit repair industry. Here are some questions you need to consider before choosing the right one.
What Are Your Goals?
a) Income (initially and long term)
b) Time (time to recuperate investment and hours a week to devote to the business)
How Much Can You Invest?
a) Start-up costs
Which Credit Repair Business Model Should You Choose?
Here are those credit repair business model types, what is required, and some of the advantages and disadvantages of each. Choosing the right one for you depends on your goals, your skills, your time, and the money you have to invest.
Starting Your Own Business
1) Federal & state laws and regulations
2) Credit repair business software
4) Credit repair training
5) Office (home or other)
8) Sales skills
9) Admin skills
10) Limited income unless you want to expand & hire staff
Conclusion- You must have a substantial amount of time & money to invest. You must also enjoy admin work, as well as understand that your customer base will be limited unless you hire staff.
Buying a Franchise
1) Significant investment $12,000 to $20,000
2) Still need to be concerned with Federal & State laws and regulations
3) Website, training, administrative should all be provided
5) Marketing skills
6) Sales skills
7) Limited income unless you hire sales staff
Conclusion- You must have a substantial amount of time & money to invest. And the franchisor must train you on how to market and sell against the competition
Owning an Independent Agency
1) Low start-up cost- less than $300 (includes the services for yourself)
2) The parent company has satisfied all state & federal requirements
3) Website, marketing materials, training through online recorded and live credit repair classes, administrative are all provided
4) Credit repair business training in sales & marketing
5) The ability to add multiple Agencies provides unlimited income potential along with a residual income component
6) No staff needed
Conclusion- This is the lowest risk option providing potentially the highest reward. It also provides the ability to start making sales and earning income quicker.
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This article was originally posted in 2014 and was updated in July 2023.