Table of Content

    Do you want to start judgement recovery business?

    Do you want to judgement recovery business? Well, there are many benefits of starting this business, for instance, you’ll need low initial investment for its startup and growth. Secondly, you can also start it from a small office and can increase your setup with time.

    However, you’ll face difficulty in finding high-paying clients so it is highly recommended that you prepare a judgement recovery business plan for your startup. The business plan will also establish the basis of your company’s operations and decisions, and will also help you find great clients. To help you write one, we are providing the sample business plan for a judgement recovery business startup named ‘Sam Judgement Recovery Consultants’.

    Executive Summary

    2.1 The Business

    Sam Judgement Recovery Consultants will be a licensed and insured judgement recovery business started in a leased office in Downtown Chicago. The business will provide judgment recovery services as well as other related services in the debt collection services industry.

    2.2 Management

    Sam Judgement Recovery Consultants will be owned by Nick Sam, a law graduate from the University of Illinois who has more than 10 years of experience working at various capacities within the debt collection industry in the US. Sam has also worked with various financial organizations as their legal consultants and knows how to start a judgement recovery business.

    2.3 Customers

    Sam Judgement Recovery Consultants will provide services to individuals, organizations, and corporates located across Chicago. Our location is ideal for starting a judgement recovery business and we hope to make the most out of it.

    2.4 Business Target

    Our target is to balance the initial cost of the startup with earned profits and to achieve the net profit margin of $10k per month by the end of the first year.

    Company Summary

    Sam Judgement Recovery Consultants will be owned by Nick Sam, a law graduate from the University of Illinois and a fellow at The National Judgment Network (NJN). Sam has worked with various financial organizations as their legal consultants after he graduated from college. He has more than 10 years of experience working at various capacities within the debt collection industry in the US.

    3.1 Why the Business is being started

    Sam did his degree in law but he was always aware of his business acumen. He is exceptional when it comes to business management and profit generation, that’s why he decided to start his own judgment recovery business a long time ago. This business will be started with the purpose of making profits in this industry while also providing quality services.

    3.2 How the Business will be started

    Before going into details of how to start a judgment recovery business, you’ll have to find out what is required for your startup. Sam Judgement Recovery Consultants will be a licensed and insured judgement recovery business started in a leased office in Downtown Chicago. For the startup, the company will procure computer systems, business internet connection, as well as usual office inventory. The startup summary is as follows:

    The detailed startup requirements are given below:

    Start-up Expenses
    Legal $55 300
    Consultants $0
    Insurance $32 750
    Rent $32 500
    Research and Development $32 750
    Expensed Equipment $32 750
    Signs $1 250
    TOTAL START-UP EXPENSES $187 300
    Start-up Assets $220 875
    Cash Required $332 500
    Start-up Inventory $32 625
    Other Current Assets $232 500
    Long-term Assets $235 000
    TOTAL ASSETS $121 875
    Total Requirements $245 000
    START-UP FUNDING
    START-UP FUNDING $273 125
    Start-up Expenses to Fund $151 875
    Start-up Assets to Fund $123 000
    TOTAL FUNDING REQUIRED $0
    Assets $23 125
    Non-cash Assets from Start-up $18 750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18 750
    Cash Balance on Starting Date $21 875
    TOTAL ASSETS $373 125
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $620 125
    Planned Investment $620 125
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $620 125
    Loss at Start-up (Start-up Expenses) $313 125
    TOTAL CAPITAL $251 875
    TOTAL CAPITAL AND LIABILITIES $251 875
    Total Funding $255 000

    Products

    Sam Judgement Recovery Consultants will provide judgment recovery services as well as other related services in the debt collection services industry. Some of our notable services include but are not limited to:

    • Debt collection services
    • Account and bill collection services
    • Tax collection services
    • Other miscellaneous services including settlement assistance, cease and desist collections processing. dispute processing, credit reporting services, repossession services, and delinquent account collection services

    Marketing Analysis of Judgement Recovery Business

    The most important component of an effective judgement recovery business is its accurate marketing analysis that’s why Sam acquired the services of marketing experts to get the help required for this phase. Marketing analysis helps you identify your target audience so that you can direct your attention towards them and turn them into your loyal customers. It helps you know where there is a judgement recovery business opportunity so that you can launch your startup there.

    5.1 Market Trends

    To get an idea of the current market of this business, you can go through judgement recovery business review in financial resources. According to recent statistics, there are more 8,900 registered and licensed Judgment Recovery or Debt Collection Agencies handling finances worth more than $12 billion annually and employing over 125,000 people across the US.

    The increase in the judgement recovery industry is due to the fact that this business can be started with little investments but can still yield good profits. All you need to do is collect money from debtors who have been commanded to pay a creditor by a court. You’ll also need to show some smartness in investigating and uncovering hidden assets of debtors in order to recover the debt that is owed. Since the renowned judgement recovery consultants charge a whopping sum to their clients, startups have a greater chance to succeed and grow in this industry.

    5.2 Marketing Segmentation

    Our target market will be individuals, organizations, and corporates, divided as follows:

    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 Corporate Sector: The biggest consumer of our services will be the business sector ranging from small startups to multinational companies. This sector includes but is not limited to restaurants and food companies, IT and software development firms, product manufacturers and distributors, real estate owners, hotels and branding and advertising agencies. These businesses frequently judgement recovery services as well as other collection services.

    5.2.2 Individuals: Our second target group will comprise of individuals including famous people and celebrities who will be needing our services regarding matters related to mortgages, dealings, and investments.

    5.2.3 Institutions and Organizations: Our third target group comprises of institutions and organizations such as government organizations, non-profit organizations, social bodies, and religious and cultural organizations.

    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Corporate Sector 48% 22 334 32 344 43 665 52 544 66 432 10,00%
    Individuals 32% 12 867 14 433 15 999 17 565 19 131 15,32%
    Institutions and Organizations 20% 11 433 13 344 16 553 18 745 20 545 13,43%
    Total 100% 46 634 60 121 76 217 88 854 106 108 9,54%

    5.3 Business Target

    Besides our aim of becoming the best judgement recovery business of Chicago in the next 5 years, our business targets are summarized as follows:

    • To balance the initial cost of the startup with earned profits by the end of the first year
    • To achieve the net profit margin of $10k/month by the first year, $15k by the second year, and $25k by the third year

    5.4 Product Pricing

    Product pricing is an important factor when it comes to businesses like us. After considering the market demands and our current competition, we have priced our products in lower ranges as of our competitors so as to survive in the market and attract customers. We’ll charge no fee for a free consultation.

    Strategy

    If you are planning to start a judgement recovery business but don’t know much about what is a judgement recovery business then you must do your research before proceeding further. No doubt, it is a profitable business but you’ll have to do extensive research to find out is judgement recovery a good business or not. After you have made up your mind to start one, make sure to create a sales strategy beforehand as it would help you decide many other important things.

    6.1 Competitive Analysis

    As we have mentioned before, there are more than 125,000 judgement recovery companies in the United States, so we undoubtedly have a tough competition ahead. However, we hope to surpass all of them by providing exceptional quality services and unparalleled customer experience within affordable rates.

    We will provide a free-of-cost, no-obligation estimate at the very moment you get in touch with one of our employees. Once we have made a contract with a client, we’ll keep things as secure as possible while also ensuring transparency. Our competitive rates and quality of service will allow us to stand out among our competitors.

    6.2 Sales Strategy

    In order to attract our potential customers toward us, we’ll take several steps some of which are described below.

    • We will carry out a large-scale advertising campaign on social media sites including Facebook, Twitter, Instagram, and YouTube
    • We will arrange free consultation seminars in various organizations and companies and will thus promote ourselves to our potential customers
    • We will offer a 20% discount on our services for the first three months of our launch so as to introduce ourselves

    6.3 Sales Monthly

    Our monthly sales from target groups are forecasted as follows:

    6.4 Sales Yearly

    Our yearly sales from target groups are forecasted as follows:

    6.5 Sales Forecast

    Our forecasted sales are given in the following column charts.

    The detailed information about the company’s forecasted sales is given in the following table.

    Sales Forecast
    Unit Sales Year 1 Year 2 Year 3
    Debt collection services 1 887 030 2 680 320 2 588 240
    Account and bill connection services 802 370 815 430 823 540
    Tax collection services 539 320 770230 1 002 310
    Miscellaneous services 265 450 322 390 393 320
    TOTAL UNIT SALES 3 494 170 4 588 370 4 807 410
    Unit Prices Year 1 Year 2 Year 3
    Debt collection services $140,00 $150,00 $160,00
    Account and bill connection services $600,00 $800,00 $1 000,00
    Tax collection services $700,00 $800,00 $900,00
    Miscellaneous services $650,00 $750,00 $850,00
    Sales
    Debt collection services $2 149 800 $2 784 000 $3 383 200
    Account and bill connection services $120 050 $194 500 $268 500
    Tax collection services $50 110 $71 600 $93 000
    Miscellaneous services $139 350 $194 600 $249 850
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Debt collection services $0,70 $0,80 $0,90
    Account and bill connection services $0,40 $0,45 $0,50
    Tax collection services $0,30 $0,35 $0,40
    Miscellaneous services $3,00 $3,50 $4,00
    Direct Cost of Sales
    Debt collection services $989 300 $1 839 000 $2 679 700
    Account and bill connection services $66 600 $119 900 $173 200
    Tax collection services $17 900 $35 000 $52 100
    Miscellaneous services $19 400 $67 600 $115 800
    Subtotal Direct Cost of Sales $1 294 100 $1 699 400 $2 104 700

    Personnel plan

    Personnel plan is an important part of a judgement recovery business plan since it gives an estimate about the staff you require along with their salaries so make sure to prepare it carefully. If you need help to prepare one, you can take help from this  how to start a judgement recovery business pdf or other similar templates available online.

    7.1 Company Staff

    Sam will act as the General Manager of the company and will initially hire the following people:

    • 1 Accountant to maintain financial and other records
    • 2 Sales Executives responsible to market and discover new ventures
    • 6 Investigators to find credit and asset information of debtors
    • 3 Collection Officers to collect funds
    • 2 Customer Representatives to interact with customers
    • 1 Front Desk Officer to act as a receptionist

    7.2 Average Salary of Employees

    The estimated salaries of the staff required are given in the following table.

     Personnel Plan
    Year 1 Year 2 Year 3
    Accountant $85 000 $95 000 $105 000
    Sales Executives $50 000 $55 000 $60 000
    Investigators $387 000 $394 000 $401 000
    Collection Officers $250 000 $255 000 $260 000
    Customer Representatives $85 000 $95 000 $105 000
    Front Desk Officers $50 000 $55 000 $60 000
    Total Salaries $522 000 $544 000 $566 000

    Financial Plan

    Just like the other plans, you must also prepare a detailed financial plan covering all financial aspects of your judgement recovery startup. The financial plan should present a detailed map of the costs of startup, rent, utilities, inventory, payroll, equipment, and how these costs will be covered by the earned profits.

    In case you are wondering about is judgement recovery a viable business, a financial plan is what will answer your question, so make sure to prepare it carefully. You can also seek help from financial experts to get all the help required.

    8.1 Important Assumptions

     General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10,00% 11,00% 12,00%
    Long-term Interest Rate 10,00% 10,00% 10,00%
    Tax Rate 26,42% 27,76% 28,12%
    Other 0 0 0

    8.2 Brake-even Analysis

     Brake-Even Analysis
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159 740
    Assumptions:
    Average Per-Unit Revenue $260,87
    Average Per-Unit Variable Cost $0,89
    Estimated Monthly Fixed Cost $196 410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss
    Year 1 Year 2 Year 3
    Sales $309 069 $385 934 $462 799
    Direct Cost of Sales $15 100 $19 153 $23 206
    Other $0 $0 $0
    TOTAL COST OF SALES $15 100 $19 153 $23 206
    Gross Margin $293 969 $366 781 $439 593
    Gross Margin % 94,98% 94,72% 94,46%
    Expenses
    Payroll $138 036 $162 898 $187 760
    Sales and Marketing and Other Expenses $1 850 $2 000 $2 150
    Depreciation $2 070 $2 070 $2 070
    Leased Equipment $0 $0 $0
    Utilities $4 000 $4 250 $4 500
    Insurance $1 800 $1 800 $1 800
    Rent $6 500 $7 000 $7 500
    Payroll Taxes $34 510 $40 726 $46 942
    Other $0 $0 $0
    Total Operating Expenses $188 766 $220 744 $252 722
    Profit Before Interest and Taxes $105 205 $146 040 $186 875
    EBITDA $107 275 $148 110 $188 945
    Interest Expense $0 $0 $0
    Taxes Incurred $26 838 $37 315 $47 792
    Net Profit $78 367 $108 725 $139 083
    Net Profit/Sales 30,00% 39,32% 48,64%

    8.3.1 Profit Monthly

    8.3.2 Profit Yearly

    8.3.3 Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    8.4 Projected Cash Flow

     Pro Forma Cash Flow
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40 124 $45 046 $50 068
    Cash from Receivables $7 023 $8 610 $9 297
    SUBTOTAL CASH FROM OPERATIONS $47 143 $53 651 $59 359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47 143 $53 651 $55 359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21 647 $24 204 $26 951
    Bill Payments $13 539 $15 385 $170 631
    SUBTOTAL SPENT ON OPERATIONS $35 296 $39 549 $43 582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35 296 $35 489 $43 882
    Net Cash Flow $11 551 $13 167 $15 683
    Cash Balance $21 823 $22 381 $28 239

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184 666 $218 525 $252 384
    Accounts Receivable $12 613 $14 493 $16 373
    Inventory $2 980 $3 450 $3 920
    Other Current Assets $1 000 $1 000 $1 000
    TOTAL CURRENT ASSETS $201 259 $237 468 $273 677
    Long-term Assets
    Long-term Assets $10 000 $10 000 $10 000
    Accumulated Depreciation $12 420 $14 490 $16 560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198 839 $232 978 $267 117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9 482 $10 792 $12 102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9 482 $10 792 $12 102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9 482 $10 792 $12 102
    Paid-in Capital $30 000 $30 000 $30 000
    Retained Earnings $48 651 $72 636 $96 621
    Earnings $100 709 $119 555 $138 401
    TOTAL CAPITAL $189 360 $222 190 $255 020
    TOTAL LIABILITIES AND CAPITAL $198 839 $232 978 $267 117
    Net Worth $182 060 $226 240 $270 420

    8.6 Business Ratios

     Ratio Analysis
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 4,35% 30,82% 63,29% 4,00%
    Percent of Total Assets
    Accounts Receivable 5,61% 4,71% 3,81% 9,70%
    Inventory 1,85% 1,82% 1,79% 9,80%
    Other Current Assets 1,75% 2,02% 2,29% 27,40%
    Total Current Assets 138,53% 150,99% 163,45% 54,60%
    Long-term Assets -9,47% -21,01% -32,55% 58,40%
    TOTAL ASSETS 100,00% 100,00% 100,00% 100,00%
    Current Liabilities 4,68% 3,04% 2,76% 27,30%
    Long-term Liabilities 0,00% 0,00% 0,00% 25,80%
    Total Liabilities 4,68% 3,04% 2,76% 54,10%
    NET WORTH 99,32% 101,04% 102,76% 44,90%
    Percent of Sales
    Sales 100,00% 100,00% 100,00% 100,00%
    Gross Margin 94,18% 93,85% 93,52% 0,00%
    Selling, General & Administrative Expenses 74,29% 71,83% 69,37% 65,20%
    Advertising Expenses 2,06% 1,11% 0,28% 1,40%
    Profit Before Interest and Taxes 26,47% 29,30% 32,13% 2,86%
    Main Ratios
    Current 25,86 29,39 32,92 1,63
    Quick 25,4 28,88 32,36 0,84
    Total Debt to Total Assets 2,68% 1,04% 0,76% 67,10%
    Pre-tax Return on Net Worth 66,83% 71,26% 75,69% 4,40%
    Pre-tax Return on Assets 64,88% 69,75% 74,62% 9,00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19,20% 21,16% 23,12% N.A.
    Return on Equity 47,79% 50,53% 53,27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4,56 4,56 4,56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19,7 22,55 25,4 N.A.
    Accounts Payable Turnover 14,17 14,67 15,17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1,84 1,55 1,26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0,02 -0,04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120 943 $140 664 $160 385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0,45 0,48 0,51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23,66 27,01 30,36 N.A.
    Sales/Net Worth 1,68 1,29 0,9 N.A.
    Dividend Payout 0 0 0 N.A.