Perhaps one of the biggest opportunities of the digital age is the ability to start and scale a company at low cost. In fact, two-thirds of U.S. entrepreneurs start their businesses from the comfort of their condos.
The question is: how many of those businesses will survive the first year, let alone thrive? Research by Small Biz suggests that 90% of of new startups fail for one of four main reasons:
- Incompetence due to insufficient planning, poor product pricing and bad financial management
- Lack of industry knowledge
- Inadequate business acumen
- Personal issues
Fortunately though, where there’s a will – and a strategic plan – there is most definitely a way. Take Integrated Loan Assistance, a mortgage and auto loan company, for example. They turned a mere $600 into a thriving multi-million dollar business. And Point Boosters who help military service members repair their credit, grew from 211 to 1,500 active clients in the space of just five months. So, how did they do it? Or better yet, how can you create the ultimate credit repair company too?
1. Clarify Your Dreams
In the same way that Michael Phelps, the most decorated Olympian of all time, credited his success to having a grand vision, you can adopt a crystal clear strategy for your business. Your first step to building the credit repair business of your dreams is to determine exactly what success looks like to you.
It’s time for business-owner pie-in-the-sky thinking. Write down every single thought that comes to mind when you think about your credit repair company. The more specific you can be, the better:
- What is my ideal annual revenue?
- What is monthly recurring revenue?
- What does my working day look like?
- Who am I working with?
- How will my business help other people?
- How big do I want my business to be?
- Why do I want to build my dream company?
Science has shown that going the extra mile to vividly describe your dreams can pay dividends. Did you know that people who write down their dreams are 42 percent more likely to accomplish them? That’s a huge gap between those who dream big dreams and those who turn dreams into reality.
Writing down your dreams will help you to stay on the right track. Every time you’re faced with a business decision you can ask yourself: Will this take me closer to where I want my company to be?
2. Create Your Financial Game Plan
Knowing that many new businesses fail from meager financial planning and poor industry expertise means that having a robust game plan is crucial.
For your business to be sustainable, it must – first and foremost – be profitable and generate cash flow. Therefore, it makes sense to prioritize the financial specifics of your business.
Because you know what your dream credit repair company means in “real terms” now, you can use the ROI calculator to uncover the building blocks of what you need to get there.
Play with the ROI calculator until you have found a couple of different ways for you to hit your target monthly salary. Adjust the fields for:
- How much you will charge clients at the start of service (introductory fee)
- The recurring monthly fee your clients will pay thereafter
- How many active clients you’ll start with
- How many clients you intend to add each month
- How many cancellations you expect to have every month
- The number of years (should be based upon how long you want it to take to achieve your goals)
If the results from the ROI calculator intimidate you, you’re doing it right. It means that you have a big vision for your business, and your future. The more honest you are about your starting point, the more likely it is that you will create an achievable game plan.
A target monthly recurring revenue of $50,000, for example, could be achieved in various ways depending upon your starting point.
Example A: You’re a Business Newbie
If you’ve never owned a business before but have been thinking about starting a credit repair company for some time, this is for you.
By working at a steady, sustainable, pace, you aim to reach your target monthly recurring revenue within three years. Every year, you’ll scale up and double the number of clients you have. You know that success doesn’t happen overnight and you’re ready and willing to put in the work!
You might not have much credit repair experience yet, but you’re committed to continued learning and becoming the best in your field. Here are the stats you’re expecting when you start your credit repair business:
- From year one to year three: You expect an average cancellation rate of around 20%
- Year one: You start with no active clients, but aim to close 15 new clients every month, keeping 80% of new clients, or 12 out of every 15 new clients
- Year two: You start the year with 144 active clients and aim to close 30 new clients every month
- Year three: You start the year with 404 clients and aim to add 60 new clients every month
Though you expect to increase your prices every six months or so, for simplicity you keep the introductory and recurring fees consistent in the ROI calculator. Setting the initial fee at $100 and the recurring fee at $210 means that your recurring monthly income will be $57,557 in three years.
Example B: You Already Own Another Business
You and your business partner have decided that starting a credit repair business together is a sound idea. You both know how to get a business moving quickly, as well as how to find, and keep, clients. You won’t have any active clients initially but you’re both certain with your backgrounds that it won’t take long to gain traction.
- As a worst case, you expect to lose 40% of your clients every month
- Year one: You aim to add 20 new clients every month: charging them an initial monthly fee of $99 and a recurring monthly fee of $199 thereafter. This makes your monthly recurring revenue $10,945.
- Year two: You both have enough expertise, credibility, and cash flow to shift your prices higher and hire new recruits. Your new introductory price is $120, and the recurring monthly fee thereafter is $250. You start this year with 144 active clients, based on this calculation: (20 clients gained x 12 months) - (8 clients lost x 12 months) = 144 active clients
Due to the new prices though, you expect a higher churn rate, and anticipate losing 30 clients every month.
With the new pricing structure and high influx of clients, you can achieve your target of $50,000 per month before the end of Q1 of year two.
3. Become a Credit Repair Guru
Regardless of the extent of your current expertise, continuous improvement is key for your business to thrive.
Money is personal. And for people to trust you with theirs, you’ll need to demonstrate that you have the skills and experience to deliver.
It’s fairly easy to start learning the credit repair basics, with various resources and information available online. But, be honest: will the basics be enough to distinguish you from competitors?
“Develop a passion for learning. If you do, you will never cease to grow.” – Anthony J. D’Angelo
Consider earning credit repair certifications, and set-aside money in your business for continued learning and development. The world of finance is always changing and your clients will rely on you to have the best, most recent knowledge of the industry.
If you consistently invest in learning, over time you will see which aspects of your training have delivered the best ROI. Each class you complete will deliver a different result; whether that be as tangible as attracting a new client, or simply by expanding your industry knowledge.
4. Provide Real Value
For your business to endure, it must provide real, consistent value to its users. When you provide a high-quality service, referrals will be a huge wheel of your revenue-generating mill.
Entrepreneur and motivational speaker Rob Moore describes the formula for success as Wealth/Success = (Value + Fair Exchange) x Leverage.
Essentially the formula says that success is based upon your ability to provide real value to an audience (Value), at a fair price (Fair Exchange) while being able to scale-up (Leverage).
In a credit repair business, providing real value is inherent to your job. Most people can benefit greatly from credit repair services and see an increase in their score within months. The aspects that credit repair business owners often find challenging are setting a fair price and scaling.
Credit repair business owners who charge by the items deleted (pay-per-delete) lose out because this model is not scalable. Imagine that you’re in the second year of your business and you have 200 active clients each month. Your income is beholden to the whims of the credit bureaus and creditors, even if you are working just as hard for each and every client. That is not a scalable business model and you’ll either burn out from exhaustion or stay stuck as a small business barely scraping by. A better way to price is through research and validated learning.
Understand your business costs and revenue targets, then set your prices through continued market research and customer feedback. The right pricing combined with an easily scalable solution like intuitive credit repair software, will boost your business towards success.
5. Set and Check Milestones
To ensure you’re always working towards your dream business, make sure you set milestones for your business and review them regularly.
Creating milestones doesn’t mean that everything will be done perfectly, but if you regularly review where you are against your goals, you will always be able to see how close you are to building the credit repair business of your dreams.
As a Credit Repair Cloud software user, you get free business coaching sessions to stay aligned with industry best practices and your business goals.
6. Watch Your Dreams Come True
As you hit deadlines and smash goals, watch your dream blossom to life.
All work and no play can lead to burn-out; take the time to celebrate the wins – big or small – and enjoy what you’ve created.
Looking for more insight to help get your dream credit repair business off the ground? Read how to do it here.
