Repo Company Business Plan [Sample Template]

A repo company, short for “repossession company,” is a business that specializes in the repossession of assets or property on behalf of creditors or lienholders.

Repossession typically occurs when a borrower fails to make payments on a financed asset, such as a car, boat, or other valuable property, and the creditor has the legal right to take back the asset due to the borrower’s default on the loan or lease agreement.

It’s important to note that repo companies must adhere to strict legal guidelines and regulations when repossessing assets.

These regulations vary by jurisdiction, but they generally require that repo agents operate within the bounds of the law and avoid using force or intimidation during the repossession process. Violating these regulations can lead to legal consequences for the repo company.

Steps on How to Write a Repo Company Business Plan

1. Executive Summary

Jarome Smith® Repo Company, Inc. is a reputable and professional repossession company located in Fort Wayne, Indiana.

Founded in 2005 by Mr. Jarome Smith, our company has been serving financial institutions, lenders, and creditors by providing efficient and legal asset recovery services. With over 18 years of experience in the industry, our team is dedicated to delivering reliable and ethical repo services.

Our seasoned repo agents and staff bring a wealth of experience and professionalism to every repossession case. We employ cutting-edge tracking and skip-tracing technology to locate assets efficiently and effectively.

With a deep understanding of legal requirements, we prioritize compliance to prevent any legal issues for our clients. We provide timely and transparent updates to our clients, ensuring they are well-informed throughout the repossession process.

2. Company Profile

a. Our Products and Services

Our company specializes in a wide range of repossession services, including but not limited to:

Automotive Repossession: We have a fleet of well-equipped tow trucks and a team of experienced repo agents ready to handle the safe and efficient repossession of vehicles.

Asset Location: Utilizing modern skip-tracing techniques and technology, we excel in locating hard-to-find assets and individuals.

Storage and Inventory Management: We maintain secure storage facilities to safeguard repossessed assets until they are returned to creditors or sold at auction.

Legal Compliance: Our operations adhere to all federal and state laws governing asset recovery, ensuring a smooth and legally sound process.

b. Nature of the Business

Jarome Smith® Repo Company, Inc. operates a business-to-consumer business model.

c. The Industry

Jarome Smith® Repo Company, Inc. will operate in the broader financial services industry.

d. Mission Statement

At Jarome Smith® Repo Company, Inc., our mission is to provide unparalleled asset recovery solutions that exceed the expectations of our clients. We are committed to safeguarding the interests of financial institutions, lenders, and creditors while upholding the highest standards of professionalism, ethics, and legal compliance.

e. Vision Statement

Our vision at Jarome Smith® Repo Company, Inc. is to be the leading repossession company in Fort Wayne, Indiana, and beyond.

We aspire to set industry standards for excellence, innovation, and client satisfaction. We see ourselves as more than just a repo service provider; we envision being a strategic partner for our clients, helping them navigate the challenges of asset recovery in an ever-changing financial landscape.

f. Our Tagline (Slogan)

Jarome Smith® Repo Company, Inc. – “Your Road to Financial Freedom Starts Here”

g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)

Jarome Smith® Repo Company, Inc. will be formed as a Limited Liability Company (LLC).

h. Our Organizational Structure

• Chief Operating Officer (Owner)
• General Manager
• Risk and Compliance Manager
• Accountant
• Administrative Officer
• Repo Operatives
• Customer Service Representatives

i. Ownership/Shareholder Structure and Board Members

• Jarome Smith (Owner and Chairman/Chief Executive Officer) 56 Percent Shares
• Charles Morgan (Board Member) 14 Percent Shares
• Golden Harvey (Board Member) 10 Percent Shares
• Lawrence Bond (Board Member) 10 Percent Shares
• Florence Nevada (Board Member and Secretary) 10 Percent Shares.

3. SWOT Analysis

a. Strength

• Jarome Smith® Repo Company, Inc. has a team of seasoned repo agents and staff with extensive industry experience, ensuring efficient and professional asset recovery.
• The company utilizes cutting-edge tracking and skip-tracing technology to locate and recover assets effectively.
• A deep understanding of federal and state laws governing asset recovery ensures legal compliance and minimizes legal risks.
• Jarome Smith® Repo Company, Inc. is known for its professionalism, ethics, and transparent operations, earning trust among clients.
• The company provides timely and transparent updates to clients, fostering strong communication and trust.

b. Weakness

• Jarome Smith® Repo Company, Inc. relies heavily on the economic climate and lending practices, making it vulnerable to fluctuations in the financial services industry.
• Evolving regulations in the repossession industry can pose compliance challenges and increase operational complexity.

c. Opportunities

• There’s an opportunity to expand services beyond Fort Wayne, Indiana, tapping into new markets and client segments.
• Exploring related services such as asset remarketing or collateral management can diversify revenue streams.
• Continued investment in technology can enhance efficiency and improve asset location capabilities.
• Collaborating with financial institutions and lenders can lead to long-term partnerships and a stable client base.

i. How Big is the Industry?

The size of the repossession (repo) industry can vary depending on the region, economic conditions, and the specific assets being repossessed. The repo industry includes a mix of large national and regional repo companies, as well as smaller local operators. The competitive landscape can influence the industry’s overall size and growth.

ii. Is the Industry Growing or Declining?

Economic factors, such as unemployment rates, consumer debt levels, and interest rates, have a significant impact on the repo industry. During economic downturns, more borrowers may struggle to make payments, leading to increased repossession activity. Conversely, during economic growth periods, repossession rates tend to decline.

Changes in laws and regulations governing repossession practices can also impact the industry. Stricter regulations or changes in consumer protection laws can affect how repo companies operate.

iii. What are the Future Trends in the Industry?

The repo industry is increasingly incorporating advanced technology, such as GPS tracking, license plate recognition, and skip tracing software, to enhance efficiency and improve asset location. This trend is likely to continue, with further advancements in data analytics and artificial intelligence for more accurate asset tracking.

Regulatory changes are an ongoing concern in the industry. Repo companies will continue adapting to evolving regulations related to privacy, debt collection practices, and consumer protection. Staying up-to-date with and complying with these regulations is crucial.

Repo companies are exploring alternative methods of asset recovery, including negotiation and voluntary surrenders, to avoid confrontational repossessions. These approaches can minimize risks and maintain positive customer relations.

With growing awareness of environmental issues, repo companies may be encouraged to adopt greener practices, such as using fuel-efficient vehicles and reducing their carbon footprint during asset recovery operations.

iv. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to a repo business because a repo business is a niche idea in the financial services industry.

v. Can You Sell a Franchise of Your Business in the Future?

Jarome Smith® Repo Company, Inc. will not sell franchises in the near future.

d. Threats

• Economic recessions can lead to increased defaults and a challenging operating environment.
• Intense competition in the repossession industry may affect pricing and market share.
• Evolving regulations or legal restrictions can impact operations and require adjustments in business practices.
• Any negative incidents or unethical practices can harm the company’s reputation and client trust.
• Rapid technological advancements may necessitate continuous investment to remain competitive.

i. Who are the Major Competitors?

• Manheim Auto Auctions
• Agero, Inc.
• International Recovery Corporation
• Allied Finance Adjusters
• Reliable Asset Recovery
• American Recovery Association (ARA)
• RAB Inc.
• American Recovery Specialists
• Repo Solutions, Inc.
• International Recovery & Remarketing Group
• Cucollector
• TFA | Time Finance Adjusters
• Certified Asset Recovery
• Repossession Pro
• Loss Prevention Services
• MBSi Corp
• Recovery Database Network (RDN)
• Digital Recognition Network (DRN)
• PassTime
• Repo com

ii. Is There a Franchise for the Repo Business? 

No, there are no franchise opportunities for the repo business.

iii. Are There Policies, Regulations, or Zoning Laws Affecting the Repo Business?

Yes, the repossession (repo) business in the United States is subject to various policies, regulations, and zoning laws that govern its operations. These regulations are typically aimed at ensuring the fair and legal conduct of repo activities, protecting consumers’ rights, and maintaining public safety.

Many states require repo companies and repo agents to obtain licenses or permits to operate legally. Licensing requirements often include background checks, training, and surety bonds.

Compliance with the Uniform Commercial Code (UCC) governs secured transactions and the repossession of collateral in many states. Repo companies must adhere to the UCC’s provisions when repossessing assets.vLaws may stipulate the notice that repo companies must provide to borrowers before repossession occurs.

This notice informs the borrower of their rights and the repossession process. Repo companies handle sensitive personal information during skip tracing and asset location.

Privacy laws, such as the Gramm-Leach-Bliley Act, require them to protect this data. While primarily applicable to third-party debt collectors, some aspects of the Fair Debt Collection Practices Act (FDCPA) may apply to repo companies, especially when dealing with consumer debt.

Repo companies often maintain impound lots or storage yards for repossessed assets. Local zoning and land use regulations may govern the location and operation of these facilities.

Repo companies typically use tow trucks to transport repossessed vehicles. Regulations on tow truck operation and licensing vary by state and locality. Repo companies often need to carry specific insurance coverage to protect themselves and their clients in case of damage or liability during the repossession process.

4. Marketing Plan

a. Who Is Your Target Audience?

i. Age Range: Primarily adults aged 25 to 65. A focus on individuals in their 30s to 50s who are more likely to have assets requiring repossession, such as vehicles or equipment.

ii. Level of Education: High school diploma or equivalent and above. While the level of education may vary, our target audience may include individuals with a diverse range of educational backgrounds.

iii. Income Level: Our target audience may span various income levels but with a focus on those who have loans, leases, or assets that require repossession. Middle to upper-middle-income individuals and families.

iv. Ethnicity: Diverse representation, reflecting the demographic makeup of our service area, which could include individuals from various ethnic backgrounds.

v. Language: Primarily English-speaking customers, but we may also cater to non-English speakers in your service area.

vi. Geographical Location: Residents and businesses in Fort Wayne, Indiana, and potentially neighboring areas.

vii. Lifestyle: Our target audience includes individuals and businesses facing financial challenges, such as loan defaults or lease terminations. This audience may consist of a mix of urban and suburban dwellers, potentially including homeowners and renters.

b. Advertising and Promotion Strategies

• Use FOMO to Run Photo Promotions.
• Share Your Events in Local Groups and Pages.
• Turn Your Social Media Channels into a Resource
• Host Themed Events That Catch Attention.
• Tap Into Text Marketing.
• Develop Your Business Directory Profiles
• Build Relationships with Other Businesses in our Area

i. Traditional Marketing Strategies

• Broadcast Marketing -Television & Radio Channels.
• Marketing through Direct Mail.
• Print Media Marketing – Newspapers & Magazines.
• Out-of-Home” marketing (OOH marketing) – Public Transits like Buses and Trains, Billboards, Street Furniture, and Cabs.
• Including direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.

ii. Digital Marketing Strategies

• Social Media Marketing Platforms.
• Influencer Marketing.
• Email Marketing.
• Content Marketing.
• Search Engine Optimization (SEO) Marketing.
• Pay-per-click (PPC).
• Affiliate Marketing
• Mobile Marketing.

iii. Social Media Marketing Plan

• Create a personalized experience for our customers.
• Create an efficient content marketing strategy.
• Create a community for our audience.
• Start using chatbots.
• Gear up our profiles with a diverse content strategy.
• Use brand advocates.
• Create profiles on the relevant social media channels.
• Run cross-channel campaigns.

c. Pricing Strategy

Jarome Smith® Repo Company, Inc. will adopt the following pricing strategies:

• Cost-Plus Pricing
• Value-Based Pricing
• Competitive Pricing
• Dynamic Pricing
• Bundle Pricing

5. Sales and Distribution Plan

a. Sales Channels

Jarome Smith® Repo Company, Inc. will employ a multi-channel marketing and sales strategy to reach our target audience. This includes engaging with financial institutions, lenders, and creditors directly to secure contracts for repossession services.

Maintaining a professional website that showcases services, contact information, and client testimonials to attract potential clients.

Building relationships within the financial and lending industry, attending industry events, and joining relevant trade associations to connect with potential clients. Collaborating with attorneys, collection agencies, and other professionals who may refer clients in need of repossession services.

Running local advertisements in print, radio, or digital media to raise awareness and attract clients in the Fort Wayne, Indiana area.

b. Inventory Strategy

Jarome Smith® Repo Company, Inc. will operate an inventory strategy that is based on a day-to-day methodology to follow for ordering, maintaining, and processing items in our repo office. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.

c. Payment Options for Customers

Here are the payment options that Jarome Smith® Repo Company, Inc. will make available to its clients;

• Bank Transfers
• Credit or Debit Card
• Cash
• Checks
• Electronic Payment Systems such as PayPal or Venmo.

d. Return Policy, Incentives and Guarantees

Return Policy:

Jarome Smith® Repo Company, Inc. typically deals with the repossession of assets on behalf of its clients, and the nature of the business may not involve traditional product returns. However, there could be situations where a client may request a return or release of a repossessed asset.

In such cases, the company’s return policy may include:

• Repossession agents will only release a repossessed asset to the client or entity that has authorized the repossession. This ensures that the asset is returned to the rightful owner.
• The company may require proof of ownership or proper authorization before initiating the return process.
• The company may inspect the condition of the asset to ensure it is in the same condition as when it was repossessed.
• There may be fees associated with the return process, such as storage fees, transportation costs, and administrative charges, which the client is responsible for covering.

Incentives:

• Clients who provide a high volume of repossession work may be eligible for discounts or preferential pricing.
• Clients who refer new business to the repo company may receive incentives or referral bonuses.

Guarantees:

• Assuring clients that all repossession activities will be carried out in strict compliance with state and federal laws and industry regulations.
• Ensuring clients receive timely and transparent reporting throughout the repossession process, including updates on asset location and recovery.
• Pledging to protect the confidentiality and security of sensitive client information, especially during skip tracing and asset location.

e. Customer Support Strategy

We will provide multiple communication channels for customers to reach out, including phone, email, and a dedicated customer support portal on our website. Maintain extended business hours to accommodate customer inquiries and concerns outside regular working hours.

Train our customer support team to be knowledgeable about repos, local regulations, and our company’s services. Emphasize empathy and active listening skills to address customer needs and concerns effectively. Strive for prompt response times to customer inquiries, aiming to acknowledge and address their concerns within a reasonable timeframe.

Implement a ticketing system to track and prioritize customer requests efficiently. Develop and maintain a comprehensive FAQ section on our website to provide answers to common customer questions.

6. Operational Plan

Identify, locate, and repossess assets on behalf of clients in accordance with applicable laws and regulations. Utilize advanced technology and skip-tracing techniques to enhance the efficiency of asset location. Ensure professional and ethical conduct during all repossession activities.

Build and maintain strong relationships with financial institutions, lenders, and creditors as primary clients. Provide transparent communication and reporting to clients throughout the repossession process. Offer customized solutions to meet the unique needs and preferences of each client.

Stay up-to-date with federal and state laws governing asset recovery, including the Uniform Commercial Code (UCC) and other relevant regulations. Ensure all repo agents are properly licensed and trained, and conduct regular compliance checks. Implement strict adherence to legal and ethical standards to protect the company and its clients.

a. What Happens During a Typical Day at a Repo Business?

In a typical day at a repo business, agents and staff engage in a multifaceted process. They begin by reviewing case files, identifying repossession targets, and utilizing advanced technology and skip-tracing techniques to locate assets. Repo agents then execute repossession orders, ensuring compliance with legal and ethical standards.

Assets are securely transported and stored, with detailed records maintained. Communication with clients, reporting, and client relations management are ongoing priorities. Additionally, adherence to industry regulations, training, and maintaining a professional and safe work environment are integral parts of each day in the repo business.

b. Production Process

There is no production process.

c. Service Procedure

Jarome Smith® Repo Company, Inc. will follow a systematic service procedure, starting with client requests for asset recovery. We will then employ advanced technology and skip-tracing methods to locate and verify the assets. Our agents execute repossessions in compliance with legal and ethical standards, ensuring minimal disruption.

Once assets are secured, they are transported and stored securely. Detailed records are maintained throughout the process. Jarome Smith® Repo Company, Inc. prioritizes transparent communication with clients and provides timely updates.

We will also offer customized solutions to meet clients’ unique needs. Adherence to industry regulations, training, and a commitment to professionalism and ethics are central to the service procedure.

d. The Supply Chain

Jarome Smith® Repo Company, Inc. manages a supply chain that primarily involves the procurement and maintenance of repossession equipment, technology, and operational resources. This includes tow trucks, GPS tracking systems, skip tracing software, and secure storage facilities for repossessed assets.

The company also sources office supplies and administrative tools. A streamlined supply chain ensures efficient asset recovery processes and adherence to legal and industry standards, ultimately serving the needs of financial institution clients and asset recovery operations.

e. Sources of Income

Jarome Smith® Repo Company, Inc. generates income primarily through the following sources:

• Repossession Fees
• Storage Fees
• Transportation Fees
• Asset Remarketing
• Additional Services
• Late Payment Charges
• Client Retainers
• Referral Incentives
• Asset Recovery Insurance
• Online Directory Listings
• Technology Solutions.

7. Financial Plan

a. Amount Needed to Start your Repo Company Business?

Jarome Smith® Repo Company, Inc. would need an estimate of $350,000 to successfully set up our repo company in the United States of America. Please note that this amount includes the salaries of all the staff for the first month of operation.

b. What are the Costs Involved?

• Business Registration Fees – $750.
• Legal expenses for obtaining licenses and permits – $2,300.
• Marketing, Branding, and Promotions – $5,000.
• Business Consultant Fee – $2,500.
• Insurance – $15,400.
• Rent/Lease – $80,000.
• Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
• Operational Cost (salaries of employees, payments of bills et al) – $60,000
• Tow Trucks and Equipment – $50,000
• Store Equipment (cash register, security, ventilation, signage) – $4,750
• Website: $600
• Opening party: $3,000
• Miscellaneous: $2,000

c. Do You Need to Build a Facility? If YES, How Much Will It Cost?

Jarome Smith® Repo Company, Inc. will not build a new facility for our repo company.

d. What are the Ongoing Expenses for Running a Repo Business?

• Employee Salaries and Benefits (This includes wages, health insurance, retirement contributions, and other employee-related costs.)
• Vehicle Maintenance and Fuel (Expenses include routine maintenance, repairs, fuel, insurance, and vehicle registration fees.)
• Technology and Software (Expenses include the purchase or subscription costs of software, GPS tracking systems, and database access.)
• Storage Facility Costs
• Licensing and Insurance (Expenses include license fees, bond premiums, and insurance premiums.)
• Marketing and Advertising.

e. What is the Average Salary of Your Staff?

• Chief Operating Officer (Owner) – $65,000 Per Year
• General Manager – $45,000 Per Year
• Compliance Officer – $40,000 Per Year
• Accountant – $40,000 Per Year
• Repo Operatives – $35,000 Per Year
• Sales and Marketing Officer – $32,000 Per Year
• Customer Service Representative – $30,00 Per Year

f. How Do You Get Funding to Start a Repo Business?

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks
• Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
• Source for soft loans from family members and friends.

8. Financial Projection

a. How Much Should You Charge for your Product/Service?

Repossession Fee: This is the primary fee and can range from approximately $150 to $400 or more per repossession, depending on factors like location and asset type. More complex repossessions may command higher fees.

Storage Fees: Repo companies often charge daily or monthly storage fees for holding repossessed assets in their secure storage facilities. These fees can range from $25 to $50 or more per day, depending on the size and type of asset.

Transportation Fees: Charges for transporting repossessed assets to storage facilities or auction sites can vary but typically start at around $100 and increase based on distance and the nature of the transport.

Key Cutting or Replacement Fees: If keys need to be cut or replaced to access or secure an asset, repo companies may charge fees for this service.

Skip Tracing Fees: Some repo companies offer skip tracing services to locate assets or individuals, and they may charge separate fees for these services, which can vary widely based on the complexity of the search.

Remarketing Fees: Repo companies may charge a percentage of the proceeds from the sale of repossessed assets, typically around 10% to 15% or more.

b. Sales Forecast?

• First Fiscal Year (FY1): $280,000
• Second Fiscal Year (FY2): $340,000
• Third Fiscal Year (FY3): $400,000

c. Estimated Profit You Will Make a Year?

Jarome Smith® Repo Company, Inc. is projecting to make;

• First Fiscal Year (FY1): (20% of revenue generated)
• Second Fiscal Year (FY2): (25% of revenue generated)
• Third Fiscal Year (FY3): (30% of revenue generated)

d. Profit Margin of a Repo Company Business

The profit margin of a repo company business is not fixed. It could range from 20 percent to 30 percent depending on some unique factors.

9. Growth Plan

a. How do you intend to grow and expand? By opening more retail outlets/offices or selling a franchise?

Jarome Smith® Repo Company, Inc. will grow our repo company by first opening other outlets in key cities in the United States of America, and Canada within the first ten years of establishing the business and then will start selling franchises.

b. Where do you intend to expand to and why?

Jarome Smith® Repo Company, Inc. plans to expand to;

• Charlotte, North Carolina
• New York City, New York
• Dallas, Texas
• Atlanta, Georgia
• Portland, Oregon
• Minneapolis, Minnesota
• Denver, Colorado
• Dallas, Texas
• San Diego, California
• Nashville, Tennessee.

Internationally, we plan to expand to Canada.

The reason we intend to expand to these locations is the fact that available statistics show that the cities listed above have a growing market for repo businesses.

10. Exit Plan

The Jarome Smith® Repo Company, Inc. has decided to pass on the business to a family member through succession. We have implemented a structure that will make the transfer of ownership from one generation to another seamless and hassle-free.

Our company has put together a comprehensive transition plan that involves transferring ownership, training key personnel, and informing employees, customers, and suppliers about the change.