How Collection Agencies Contribute to Small Business Economy

5/7/2015 2:08:00 PM

A majority of collection agencies in the U.S. are small businesses. In conjunction with the Small Business Administration’s National Small Business Week, Gulf Coast Collection Bureau President Jack Brown III shares about operating a small agency in the credit and collection industry.


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Did you know that a vast majority of debt collection agencies in the U.S. are small businesses? According to the ACA International and Ernst and Young study of the Impact of Third Party Debt Collection on the National and State Economies, nearly 94 percent of third-party debt collection agencies have less than 100 employees and 98 percent have less than 250 employees.

These small businesses help keep credit, goods and services available for consumers, and third-party debt collection plays an important role by recovering consumer debt back into the economy.

According to Jack Brown III, the president of Gulf Coast Collection Bureau in Sarasota, Fla., one benefit of operating a small business is the ability to quickly respond to changing customer requests and needs.

Gulf Coast Collection Bureau has 46 employees, and Brown is a second-generation agency owner with experience in various roles at the company since 1998.

Having a smaller staff allows the leadership to have a personal connection with each staff member and to know them by name, Brown said. “[It] makes all of us feel connected and part of the larger goals of the company, which allows the staff to be contributing members to the team's success,” he said.

A small business operation also allows for a closer relationship with clients.

“We are able to tailor solutions and implement them quickly to meet our clients' needs,” Brown said. “Since we do not have the multiple layers of management, we are able to adapt to the changing demands of our clients quicker than the larger competitors.”

But there are still challenges that come with operating a small business in the credit and collection industry.

“The biggest challenges of being a small business is to do more with less,” Brown said. “The reality is that our resources are not the same as our larger competitors; therefore, we have to use ingenuity and hard work to… leverage our resources. In recent years, compliance requirements have become the biggest challenges and are making the barriers to entry in our industry much higher than they used to be. This is probably the largest challenge faced by small business in the credit and collection industry.”

Overall, Brown said small businesses are vitally important to the local and national economy. 

“Many times small businesses in the collection industry service other small businesses in their community, providing those customers the ability to achieve their goals in their business and thereby supporting the broader economy as a whole.”

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