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’.

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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.

Judgement Recovery Business Plan - 3 Years Profit Forecast

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:

Judgement Recovery Business Plan - Startup Cost

The detailed startup requirements are given below:

Start-up Expenses 
Legal$55 300
Insurance$32 750
Rent$32 500
Research and Development$32 750
Expensed Equipment$32 750
Signs$1 250
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 Requirements$245 000
Start-up Expenses to Fund$151 875
Start-up Assets to Fund$123 000
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
Liabilities and Capital$0
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
Capital$620 125
Planned Investment$620 125
Investor 1$0
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$313 125
Total Funding$255 000


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:

Judgement Recovery Business Plan - Marketing Segmentation

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 CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
Corporate Sector48%22 33432 34443 66552 54466 43210,00%
Individuals32%12 86714 43315 99917 56519 13115,32%
Institutions and Organizations20%11 43313 34416 55318 74520 54513,43%
Total100%46 63460 12176 21788 854106 1089,54%

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.


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:

Judgement Recovery Business Plan - Sales Monthly

6.4 Sales Yearly

Our yearly sales from target groups are forecasted as follows:

Judgement Recovery Business Plan - Sales Yearly

6.5 Sales Forecast

Our forecasted sales are given in the following column charts.

Judgement Recovery Business Plan - Unit Sales

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

Sales Forecast   
Unit SalesYear 1Year 2Year 3
Debt collection services1 887 0302 680 3202 588 240
Account and bill connection services802 370815 430823 540
Tax collection services539 3207702301 002 310
Miscellaneous services265 450322 390393 320
TOTAL UNIT SALES3 494 1704 588 3704 807 410
Unit PricesYear 1Year 2Year 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
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
Direct Unit CostsYear 1Year 2Year 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 1Year 2Year 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 1Year 2Year 3
Plan Month123
Current Interest Rate10,00%11,00%12,00%
Long-term Interest Rate10,00%10,00%10,00%
Tax Rate26,42%27,76%28,12%

8.2 Brake-even Analysis

Judgement Recovery Business Plan - Break-even Analysis
 Brake-Even Analysis 
Monthly Units Break-even5530
Monthly Revenue Break-even$159 740
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 1Year 2Year 3
Sales$309 069$385 934$462 799
Direct Cost of Sales$15 100$19 153$23 206
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%
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
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/Sales30,00%39,32%48,64%

8.3.1 Profit Monthly

Judgement Recovery Business Plan - Profit Monthly

8.3.2 Profit Yearly

Judgement Recovery Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Judgement Recovery Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Judgement Recovery Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

Judgement Recovery Business Plan - Projected Cash Flow
 Pro Forma Cash Flow   
Cash ReceivedYear 1Year 2Year 3
Cash from Operations   
Cash Sales$40 124$45 046$50 068
Cash from Receivables$7 023$8 610$9 297
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
ExpendituresYear 1Year 2Year 3
Expenditures from Operations   
Cash Spending$21 647$24 204$26 951
Bill Payments$13 539$15 385$170 631
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
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   
AssetsYear 1Year 2Year 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 ASSETS$198 839$232 978$267 117
Liabilities and CapitalYear 1Year 2Year 3
Current Liabilities   
Accounts Payable$9 482$10 792$12 102
Current Borrowing$0$0$0
Other Current Liabilities$0$0$0
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    
Sales Growth4,35%30,82%63,29%4,00%
Percent of Total Assets    
Accounts Receivable5,61%4,71%3,81%9,70%
Other Current Assets1,75%2,02%2,29%27,40%
Total Current Assets138,53%150,99%163,45%54,60%
Long-term Assets-9,47%-21,01%-32,55%58,40%
TOTAL ASSETS100,00%100,00%100,00%100,00%
Current Liabilities4,68%3,04%2,76%27,30%
Long-term Liabilities0,00%0,00%0,00%25,80%
Total Liabilities4,68%3,04%2,76%54,10%
NET WORTH99,32%101,04%102,76%44,90%
Percent of Sales    
Gross Margin94,18%93,85%93,52%0,00%
Selling, General & Administrative Expenses74,29%71,83%69,37%65,20%
Advertising Expenses2,06%1,11%0,28%1,40%
Profit Before Interest and Taxes26,47%29,30%32,13%2,86%
Main Ratios    
Total Debt to Total Assets2,68%1,04%0,76%67,10%
Pre-tax Return on Net Worth66,83%71,26%75,69%4,40%
Pre-tax Return on Assets64,88%69,75%74,62%9,00%
Additional RatiosYear 1Year 2Year 3 
Net Profit Margin19,20%21,16%23,12%N.A.
Return on Equity47,79%50,53%53,27%N.A.
Activity Ratios    
Accounts Receivable Turnover4,564,564,56N.A.
Collection Days9299106N.A.
Inventory Turnover19,722,5525,4N.A.
Accounts Payable Turnover14,1714,6715,17N.A.
Payment Days272727N.A.
Total Asset Turnover1,841,551,26N.A.
Debt Ratios    
Debt to Net Worth0-0,02-0,04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios    
Net Working Capital$120 943$140 664$160 385N.A.
Interest Coverage000N.A.
Additional Ratios    
Assets to Sales0,450,480,51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23,6627,0130,36N.A.
Sales/Net Worth1,681,290,9N.A.
Dividend Payout000N.A.