The Bare Minimum Needed to Start Your Foreclosure Cleanup Business
One of the quickest ways to start a foreclosure cleanup business is to 1) decide you want it, 2) do a little planning, 3) and jump right in. If you think about it too long, you’ll scare yourself to death and will get stuck in the thinking phase. But with a business like foreclosure cleanup, the industry is wide open. All the numbers point to a booming enterprise for 2010 and beyond.
Top Economists’ Predictions
With top economists labeling the rise of foreclosures among prime borrowers the “third wave of trouble,” businesses offering foreclosure cleanup services are poised for tremendous growth. In 2010 alone, well over four million homeowners will receive foreclosure notices; over half of those will go through foreclosure.
Further still, $2.5 trillion in risky loans are expected to reset in 2010 and 2011. It’s predicted that many of these loans were given to people who couldn’t afford the payments from the outset, which will make for an even more congested foreclosure market.
Foreclosure cleanup is the perfect opportunity to start a business, and, with a little planning, your doors can be open in a few weeks, ready to capitalize while offering a much-needed service. And, it’s a business that can be started part-time while still working a job.
Planning Your Foreclosure Cleanup Business
Decide to take two weeks to plan your foreclosure cleanup business. Write a business plan (outline format is fine with detailed notes) so you have a direction, a path, for your business as it relates to services, pricing, equipment and marketing.
Figure Out Which Services to Offer
During your two week business planning stage, you will figure out which services you will start out with. Foreclosure cleanup services can run the gamut. You can offer everything from debris removal, cleaning, lawn care, pressure washing, gutter cleaning, interior cleaning, painting, winterization, window and door boarding and replacement, locksmith services, inspections, and more. If you’re not careful, you’ll be all over the place, so you’ll need to be really focused in choosing the services you want to start out with in your new business.
TIP: Keep it simple in the beginning. Start by offering only those services you know you can handle in-house — and only those services for which minimum equipment purchases are needed.
Setting Your Pricing
After you create a services list, do a little research and set up your pricing guidelines. These will change often based on various factors as jobs come in, but have basic pricing guidelines already setup before you open your doors. Call “like” services to see what they are charging for, for example, lawn maintenance, debris removal, gutter cleaning, etc. Set your prices competitively based on what they are charging, the job factors, what you are putting out, and how much you want to clear off the job.
Getting Your Foreclosure Cleanup Business License
Make sure you call your County Clerk’s office to see what kind of licensing you will need and register your business formally. Go to the IRS’ website and sign up for an Employer Identification Number (EIN), also known as a Federal Tax Identification Number, so you are right with Uncle Sam’s reporting requirements once the money starts to roll in.
Getting Insurance for Your Business
Next, call around and get insurance quotes. You’ll need basic liability for your business and the proper insurance for your vehicle. It’s easiest to start out as a janitorial/maintenance type service. That’s a category that’s easiest to get insurance under; but note, you can only offer services for which that insurance covers.
Setting Up Your Website
Then, set up a quick website. There are various website templates online for a little of nothing will allow you to setup a quick webpage. Visit template sites where you can setup a website cheaply or for free.
At minimum, you will want to list information about your company, its services and your contact information on your new website.
Ordering Your Business Cards
Next, you will want to order your business cards. Try to have your business cards match the theme and/or colors of your website. This is another good reason to use printing type websites for your web page. You can order cards that will match your website’s theme easily.
Some sites even allow you to order “free” business cards if you keep their company name on the back of your cards. Not a bad tradeoff to cut costs in the start-up phase of your foreclosure cleanup business. You will wind up paying for shipping of the cards, however. (One such site will send you 100 “free” business cards and you will pay only a few dollars in shipping for the cards. Not bad.)
Create Your Marketing Material
Order some matching postcards online for your foreclosure cleanup business, and create some fliers on your computer that you can print out. Then, take them to a copy shop and duplicate — and start papering your surrounding community.
Pull Together Your Call List
Next, you will want to pull together a call list of realtors in your areas (foreclosure realtors!) as well as a list of REO assets managers at banks, a list of larger property preservation companies, and a list of landlords and real estate investors. Then you’ll want to jump right in calling them and seeing how you can service them with your new business.
Come up with a special promotion to peek especially the realtors’ interests. Also, offer them a discount if they belong to, say, NAR (National Association of Realtors). Many realtors will be coming out-of-pocket for foreclosure cleanup expenditures on their listings and will be waiting to get paid from the banks. They will appreciate a price break from your company.
Create a Phone Script for Your Business
Write a phone script so you will already know what you want to say when you call potential clients.
TIP: Make sure you get your company name and your company’s services in there. If you get a voicemail when calling, be sure to include the best time a potential client can reach you, your phone number, and your website address so they can learn more about your company.
These are just the basics to get your business off the ground quickly. Do a little industry research and get started planning today! As your business grows, you will become more formalized and add more policies and procedures that will ultimately benefit you, your business, and what is a growing cache of foreclosed homes.
Good luck out there on the front lines of the foreclosure cleanup industry!