Over the last couple of decades, I have seen auto repossession companies come and go. Both friends and competitors have closed their doors before my eyes for a variety of reasons. Some closed their doors due to money management and poor business practices. Others closed their doors as a result of illness or old age. I have often heard divorce and personal problems cited as reasons for throwing in the towel. Out of everything I have heard, I would say one of the most frequent reasons for closing an auto repossession business was just being plain tired and giving up. Time and time again, I have had repo company owners tell me they were burned out and closing their doors. They were tired of battling with staff, clients, debtors, and other headaches that come with owning an auto repossession. If you, as the owner, are burned out, your business will also become burned out. Your office staff and repossession agents will catch vibes you put off, and business will suffer. Never let your employees see you down. For your sake and your business’ sake, you need to always be on top side. Having a positive attitude will be contagious and will lead to your business running better. Of course, this will lead to higher profits and business growth. I have been in the offices of both types of companies – the “burned out” one and the “on top side” one. The two are farther apart than the East coast is from the West coast, and it is the “on top side” business that is raking in the cash. Not only is the business making money, but the staff and owner are having a blast doing what they love! In the “burned out” office, you can slice and dice the thick tension, see the pain in everyone’s face and loosely predict the date and time they will go bankrupt. Most of us got into this business with a great love for the auto repossession industry and the life that goes with it. If you get burned out, you will lose the love for this industry and, just like a marriage, the relationship will come to a painful end.
Archive for November, 2011
In an earlier post, we talked about learning to respond to the word “no” and how to be persistent in this business. Today’s tip was inspired by Bryan McCollister, owner of Faith Financial, Fort Worth, Texas. It also deals with the word “no”, but in a different way. You should not only learn how to overcome the obstacle word “no”, but you need to learn how to say “no” as well. Saying “no” could be used in response to a request for free storage or maybe for doing work on a contingent basis or possibly for a low fee for repossession work. Far too many auto repossession companies are taking any business they can get without weighing the costs. These “eager beavers”, jumping at any work that is thrown at them, are the reason why auto finance companies are expecting every agent to work for pennies and provide free services. These same lenders are in the business of making money, and yet expect you to work for free. They would not be providing auto loans to people if they were not making money, and you should not do work for them if you are not making money.
When I talk to people in the auto finance world, I often ask them a couple of questions that make them squirm. The first is, “Would you do your job if you were only going to get paid if the people paid up or the car gets recovered?” Another is, “Would you come in to work on Saturday and Sunday if you were not going to get paid for those hours?” None of them ever say that they would, and then I compare that to freebies that auto repossession company owners are often asked to do by clients.
About 10 years ago, I used to do work for a client that paid well. We got $325 a car, plus keys plus transport with a cure fee, if we got the debtor to pay up. We picked up about 100 or more voluntary repos a month that made it a guaranteed $30,000 a month account for us. We were very happy to do their auto repossession work because we were making a nice profit. I recently spoke with an auto repossession company owner in my old area that is currently doing the same company’s work. He is doing their invols for a whopping all-inclusive fee of $265 a car. He must make keys, transport the cars to auction, and does not get a cure fee for that price. I know he is not making money, he knows he is not making money, and you know it, too. He should have said “no” to that account from the start. The cost of business has gone up since I did auto repo work for them.
How is it possible that this lender’s fee has gone down and not risen to $450 per repo plus keys and transport with a cure? That question demands an answer, and the answer is that some poor soul needed work so badly, that he was afraid to say “no”. Lenders weigh the decision on whether or not to put you on their vendor list, and you need to do the same when thinking about doing work for a client. If you are not going to make money working for a client, then you need to just say “no”.
I am not talking about making a living, either! A person makes a living at a job, but business owners need to make money – not lose money. Weigh the costs before bringing on a new client, and if you are not going to make good money, then you need to turn them down with a confident “No”!!!