Greed can get the best of all of us. Do not get me wrong. There is nothing wrong with making money with your auto repossession business. As a matter of fact, we at http://repoindustry.com/ do not want you just to make a living owning a repossession business, we want you to get rich! If you are only going to make a living, then why own an auto repossession business? You can go work for someone else and just make a living, and let them deal with the headaches of being a business owner.
On the other hand, you should be sure you share the windfall with the hardworking repo agents you have working for you. If you have a big agency or want to get big, you need to realize you can’t do it without their help.
This is just one of the things the doomed company we are discussing in this series failed to realize. They were a big company, they had a great reputation, and they were making a lot of money. The owner’s sons began comparing our agent’s pay per car with other agents working for their competitors. There is nothing wrong with that if you are comparing quality along with the comparison on pay. Our repossession agents were the cherry on the milkshake! They were the best of the best! They were the biggest reason the company was great! The other companies they were comparing us to were unsuccessful. When you start comparing yourself or your business, you should never compare down, always compare up. You can never improve yourself by looking at the failures of others.
The other agents in the area were getting around $100 for every involuntary repossession they did, and our company paid us $140 per invol. Now, keep in mind this is when the lenders were willing to pay big money for repossessions. This bothered the “boys” to no end, and they constantly threw it in our faces. They were determined to keep our pay in line with the other repo companies. They finally got the owner – dad – to change the rates the repo agents were paid to $100 per repo. Talk about change! This change did not just upset things a little, but it was like a tsunami with the agents. They were furious, and even plotted to stop working so hard. It is very difficult to accept having something you are used to getting taken away from you. Greed and Change were just two things that were the beginning of the death of this once great auto repossession company.
If it ain’t broke, don’t fix it! If you get a great system going with your auto repossession business, then do not change a thing. Of course, if recurring problems come up that affect your business, you will have to make minor or major adjustments – depending on the problem. But, by all means, if things are flying right, then do not change your course of direction. If a small problem does come up and a change needs to be implemented, then tweak things “mildly” – no major changes. Making a change can affect the entire operation of your auto repossession company, and, if things are pretty much running smoothly, you do not want to do that. Do not change your office staff unless you absolutely have to.
One of the things that was the ruin of the repo company in this series was that out of nowhere they decided to make changes for no reason at all. They fired one of the best skip tracers they had because of a personality conflict. He was doing an awesome job, but he could not get along with one of the owner’s sons. The son decided to go on a campaign to get rid of him and was successful at getting him tossed. The skip tracer went to work for one of the company’s competitors and, slowly but surely, began to pull business away to his new place of employment.
You also do not want to have a high turnover rate of the repomen you have working for you. Making changes in your field agents can negatively affect your business, as well. Not only should you not change the repossession agents you have working for you, you should also try to not change their routine.
The next unnecessary change that they made at the company discussed in this series was to “shake up” the repo agents by shuffling the areas in which they worked. For the most part, the recovery rates of all the agents were really good, but they thought they were getting too comfortable working the same areas. They also were trying to punish a couple of the guys – once again over personality conflicts. They had drivers that normally worked in areas close to their homes driving 50 or more miles to work an area another agent used to cover. Then, they had the agent from that area going the same difference to the other guy’s area. Pure insanity! These repomen had developed contacts, knew the streets, knew the hiding places and had decent relationships with the police departments in the areas they had worked in. Now, they had to start from zero, and it showed in their recovery rates. The lenders began to notice that it was not business as usual, and that something had changed. I can be a bit outspoken, and I voiced my concerns to the owner. He appreciated the input, but his kids did not. They began to target me and accused me of getting in the middle of the family business.
This will be be the first post in a series called “How Not to Run An Auto Repossession Business”. Years ago, I personally worked for a truly great auto repossession business. Not only was the repo business great, but the owner was not only an awesome boss and but he was a great repoman. He had what it took to start, build and maintain an auto repossession company that had a fleet of wreckers, rollbacks and transport trucks, several offices, a skip tracing department, a locksmith department and a huge staff of office workers and repossession agents. His company performed repossession work for nearly every major lender in the United States, as well as almost every local bank and credit union. The company executed over a thousand involuntary repossession orders a month. He was known as the guy that could get any piece of collateral recovered and if he could not get the unit picked up then no one could. His recovery agents were the best paid, had the nicest and newest equipment and were known for professionally getting the job done. The repo agents that worked for this company were the envy of every repoman for miles and miles around. If you worked for this particular repossession company and you were also a great repoman , there was no doubt that you were going to make over $100,000 a year. I worked for this company as a repoman at first and later managed an office and several repossession agents. The owner of the company always had a pocket full of cash and I did too. I had decided that I was never going to leave this company – ever. Although, in the past, I had dreamed of owning my own auto repossession business, I had put that thought far in the back of my mind. Why would I own my own? I was making an ungodly amount of money without the headaches of owning my own company. My boss treated me better than I expected to be treated and never hassled me. He always trusted me and never questioned my words or actions. I always had a new wrecker to drive, made my own schedule and did not have a complaint in the world. So what happened to this company? This is what this series is about – How Not to Run An Auto Repossession Business.
You can make comments here or on the thread in our forum by clicking here
If you a repoman, repossession company owner or a lender please join the most active auto repossession industry forum on the web by clicking here