HOW TO START YOUR OWN
CREDIT AND DEBT COUNSELING SERVICE


Here's a business idea that meets all the aspirations of the
American Dream.

You can start small with little or no investment, develop it
in your spare time, and parlay it into a $100,000 a year income -
all within the next twelve months or so.

Really, all it takes to move on this one is an empathy for
people, a basic understanding of money management, about 500
business cards, some smart advertising, and you're in business.
Your greatest expense or investment, of course, will be for
advertising.

The first, and most important thing to learn is the "thought
processes" in the minds of the people or firms that lend money.
No one lends money with the thoughts of foreclosing on the loan
and taking away a borrower's collateral. Whenever the lender is
forced into such a situation, everybody loses. The borrower loses
his possessions, and the lender ends up with about one tenth of
the money he originally loaned out.

Therefore, the lending institution will generally do
everything possible to work with the borrower as long as he
continues to show good faith in attempting to repay the full
amount of the loan. The most important thing a borrower should
do, once he finds himself in a financial bind, is get in touch
with his creditors and apprise them of his situation. Usually,
the lender will set up a meeting for an open discussion between
himself and the borrower, in order to adjust or work out a more
convenient repayment schedule.

Most people who borrow money are having money management
problems to begin with, and are actually terrified to death at the
thought of people from the loan company calling them. Although
they generally won't admit it, most are aware that they are having
problems managing their money. They are embarrassed about it, and
instead of openly seeking help, they attempt to cover up the
problem, and then hide from or avoid the very people who want to
help them.

Over the past three years, personal and small business
bankruptcies have been soaring to record levels. At the bottom
line, very few people want to file bankruptcy against their
creditors, because regardless how easy it is, the thought of
having "gone bankrupt," still leaves a stigma.

And this is where you step in with your Professional Credit
and Debt Counseling Service. You should never have any trouble
finding clients.

Remember, step one is always to notify the client's creditors.
This is the first instruction (or job) that you give to the client
after you've heard his story. The borrower should be the one to
notify the creditors, and ideally, he should call each on the
phone, set up a meeting and then discuss with the lender his
current financial situation as well as his plans to rectify the
problems, and resume payments. The plan he'll discuss with the
lender will be the plan you assist him in setting up.

If the borrower is in over his head and with no other
alternative, you should immediately advise him to file for relief
under "The Wage Earner's Plan," as explained in Chapter 13 of the
Federal Bankruptcy Act. In essence, this "plan" gives the debtor
time to regroup and reorganize his financial situation without
being hounded by bill collectors.

Anyone who's capable of earning wages, salaries or
commissions, can make use of this plan. It should in no way be
thought of as bankruptcy. This is simply a court supervised
method for a borrower to pay off his debts. The borrower simply
draws up a plan to pay off his debts over a three-year period. If
the court accepts the plan, the lenders are almost obligated to
accept it. While more recent bankruptcy laws still leave room for
abuse by dishonest "big business," they fortunately have improved
the outlook for the "little guy."

Your job as a Credit and Debt Counselor is to meet with the
overextended borrower, listen to his problems, and help him to
plan a budget to live by, and set up a plan for the proper
management of his income that will include money for him to live
on, plus regular payments to his creditors. In the beginning, you
can meet in the borrower's home, pretty much the same way an
insurance agent does. Later on, you'll probably want your own
office, but a formal office for your business will never be
absolutely necessary.

Many people are reluctant to be seen walking into a Credit
Counselor's office. Again, there's a personal embarrassment - the
thought of their friends seeing them, and the worry of what other
people will think of them. So if you do opt for an office, make
it as unobtrusive and as confidential as possible. A sign stating
"Money Management Consultant" would be appropriate. Gaining the
confidence and trust of your clients will be the secret of your
success. And do not underestimate the power of "word-of-mouth"
recommendations by grateful clients.

Follow the methods of the insurance salesman, making
everything as comfortable as possible for your clients. So long
as you listen to your client's problems, and then work with him to
plan a budget he can live with while paying off his bills, you
won't be required to have a license in most states. You simply
listen, assist the borrower in planning a budget, and he
administers it himself. He makes all the contacts with his
creditors, and makes all the payments directly to them. To give
you the money and have you disburse it among his creditors would
require a license for your business.

Step two in your service is to find out the total amount of
cash your client has coming in each month, and on what dates.
Calculate according to his current obligations, how much he needs
for living expenses: Rent or mortgage payment, utilities, food
and clothing. The remainder of his available income is then
budgeted for division among his creditors.

One of the best (and easiest) methods of money management
within a budget is via envelopes. The wage earner marks a
different envelope for each of his obligations. He then makes
predetermined amount of deposit in each of these envelopes each
payday.

Thus, if his mortgage was $500 per month, and he brought home
$750 each pay day, you'd probably advise that he "deposit" $250
each payday into the mortgage envelope. And so it would be with
each payment envelope.

Many people find this kind of system scary in the beginning,
but after they've used it for a month, they swear by it as the
only way to keep bills up to date.

Of course, the most important thing you want to advise your
clients to do is destroy all their credit cards. Best of all,
have them cut them in half, and send them back with a short note
explaining what they are doing and why - getting a handle on their
debts according to their actual income. Basically, that's all
there is to your counseling service.

You'll need a first meeting to hear the problems, and to make
your proposals. A second meeting will be in order to polish and
endorse the planning. Perhaps a third meeting at the end of the
first month to assist them in making their payments from their
obligation envelopes. Finally, you'll want to keep in touch with
them and ask how they are doing from time to time. You'll find
that most of the people you serve today will need your services
again at some time within the next five years - sad, but
statistically true.

It's a "fast-track" and ever-changing world. People who are
poor money manager today invariable encounter money problems again
and again, regardless of how often they get everything paid off.
This is, unfortunately, what keeps the lending institutions in
business, and presents the opportunity for you to become wealthy
as a Professional Credit and Debt Counselor.

You'll need a receipt book. Drop by any large stationery
store and get the most impressive one available. You should
charge $100, more or less, for your services. Three counseling
sessions, with the payments at $10 per month spread over ten
months is an ideal arrangement. Explain your fee during your
first contact - $100 in payments of $10 per month per ten months.
You'll find the sound of a $100 fee affords an intangible degree
of respect for your services, while the explanation of modest $10
monthly payments closes the sale for you.

Always carry an attaché case, and at each meeting, work at the
kitchen or dining room table. If it's a husband and wife, be sure
that each is seated beside you. If it's just one person, have him
or her to your right if you're right-handed; to your left if
you're left-handed. Never have a client opposite you, across the
table. Round tables are best for empathy, agreement and
cooperation; this has been proven psychologically - just believe
it, and be guided accordingly.

Always carry a yellow legal pad, and have plenty of pencils
with erasers available. The legal pad lends authority to your
knowledge, while leaving plenty of room for alternatives. The
pencils and erasers eliminate the symbolic fear of every thing
being "cast in stone," and conveys the feeling of negotiation.

You should be well-dressed, a portrayal of the traditional
"financial officer," and yet in warm colors to accentuate your
empathy with the problems of your clients. By all means, you
should be sparkling clean and well-groomed. Do not smoke during a
meeting with a client, and always diplomatically refuse any
alcoholic drinks that may be offered. Try to "talk" with your
clients. You must never show any signs of disapproval of the
actions that resulted in your clients being in their present
predicament, nor should you sound as if you're lecturing or
speaking to children. Remember - and you can tell your client -
this has happened to many stable, conscientious people.

Maintain an attitude of understanding and a sincere desire to
help them out of their current "tight spot." Don't let them get
going on a deprecatory tangent, either. Should they start down
that path, simply tell them, "These things happen to everyone, and
what's done is done; the important thing now is working out the
solution to the problem."

As mentioned earlier, your only real investment to set
yourself up in this business will be for advertising. Even that
does not have to be a "saved up" cash outlay. You can start off
by planning to run a two-column wide by three-inch deep
advertisement in your most read area newspaper. Check with the
newspaper office to get the best price on a bulk space contract.

Under this kind of agreement, you sign to pay for a certain
minimum number of column inches for the next year, and as a
result, your rates are considerably lower than those paid by the
infrequent advertiser. Best of all, the newspaper will bill you
after the ad has run, and allow you 30 days from the date of your
billing to pay.

You should plan to run an ad in the newspaper for at least
three days a week, especially in the Sunday editions, every week.
You might also want to run the same ad in several of your weekly
Shoppers Newspapers. Definitely have a flyer made up describing
your services. About once a month, hire 7th or 8th grade school
children to hand these out for you in the busy shopping centers.
Another good place to hand them out is at the entrances to your
state's employment service offices. Small 3 by 5 announcement
cards or descriptive business cards on all the bulletin boards in
the area will also pull in business. Finally - and most
importantly - just as soon as you can afford it, an advertisement
and listing in the yellow pages of your telephone directory should
be bought. Telephone directories come out on a regular (usually
annual) schedule, so check ahead, and anticipate cost and date you
may expect results.

A good place to check for help in writing your advertising is
your area colleges. The students will generally help you in
exchange for the opportunity to build a portfolio. There's never
a need to pay the "out-of-sight" high prices demanded for
professional copywriting and advertising design by some agencies,
even if you have the money. All finished ads are unproven, and
you have no guarantee that one is better than another until you
begin testing or using it.

The important element is that your ad says what you want it to
say - that is looks good and makes you feel that it will appeal to
your potential customers - that it instills a confidence within
you that it will bring in the customers. Use the "AIDA" formula:
ATTENTION, INTEREST, DESIRE, ACTION!

An attention-grabbing headline (or first line) - a line or
paragraph that definitely appeals to or arouses the self-interest
of your potential customer; a "hooker," or image-building
description that causes the prospect to picture how much better
his life will be as a result of availing himself of your services;
a line that relieves the prospect's fear of making the wrong
decision (such as "Satisfaction Guaranteed"); and a demand that he
take immediate action such as "CALL NOW!" Do not approve, and do
not run any ad that does not contain all these ingredients.

Here's an example of an ad that should work very well for you:

ARE BILL COLLECTORS HOUNDING YOU?
Now there's a way to stop those dunning letters and
embarrassing phone calls. Get out of debt
completely - without bankruptcy! Preserve your
good credit rating; maintain your present
lifestyle; worry no more about bill collectors!
Just an hour or so of your time, and your money
problems can be solved! Your satisfaction is
guaranteed! Phone 123-4567 right now for an
appointment.
Nationwide Credit Counselors
123 Tenth St.
City, State.

A classified ad might read:

Solve all your money problems with this easy and
completely legal solution. 100% guaranteed
anywhere in the U.S. Call Consumer Credit
Solutions at 123-4567.

At the same time your newspaper ads begin to appear, be sure
to get a press release about your business to the business editors
and consumer advocates at all the newspapers, radio and television
stations in your area. Of help to you in this area will be our
report #3504, The Inside Secrets of Getting Free Publicity For
Your Business.

It's generally not worthwhile to advertise this particular
kind of business on radio and TV, unless you do so on a "per
inquiry" basis. For more details on this approach, see Report
#3406, How To Get Free Radio Advertising For Your Company.

After any free radio and TV talk shows, and newspaper feature
stories about your business, the next best method of spreading the
word about your business will be via the guest speaker route at
civic club meetings. And don't forget the women' s clubs. Your
talk to these groups should be "scripted," simply explaining the
alarming number of bankruptcies, the great losses suffered by
business because of bankruptcies; the exasperatingly poor record
of the American people with money management responsibilities; and
urging for support to get "back to the basics" and teach practical
money management courses in the schools, and be example in the
home. Such a talk should bring you a big round of applause and a
continuing source of referrals.

To carry this effort just a little further, set up Credit and
Debt Counseling Seminars or Workshops. You can arrange to hold
them in the banquet rooms of well-known restaurants in your area,
meeting rooms at your local community college, fraternal club
meeting halls, motels, or even churches - because of the suspicion
that you are setting up to sell something when you don't charge an
attendance fee. Most people are aware of the bottom line - that
you are trying to sell them something w hen you invite them to a
seminar or workshop. However, most feel that when there is a
cover charge, the basic information you will be giving will be
more useful than that given when there is no charge to attend.
And if they have paid some kind of fee, they will be more at ease
in listening and evaluating, without the pressure when they have
come "for free."

Seminars are one of the most lucrative (and fastest) ways of
getting a new business of to a running start. When you stage
seminars, it is imperative that you flood the area with
advertising, being sure to promote the seminar, not the product
that you are really selling.

Your seminar script should be basically the same that I have
outlined for your as a guest speaker, the difference being that
instead of closing with a call for more education in money
management, you briefly outline the simplicity of the "envelope
deposit" system. You then close with an open invitation for those
with particular problems or needing special help to call you
office and set up an appointment for personalized counseling
service.

Even before you officially open for business, you will want to
have a tentative list of people you can possibly train as
employees to handle the workload as your business grows. Rather
than pay these people a salary, simply give them a commission for
each client they handle. In other words, you can sign a client
for $100 over 10 months, sell the account to a factoring company
for 80% of the total, collect $80 in cash immediately, pay your
commission counselor $30, and bank $50 in profit with no real
work involved on your part. And if you have hired a good
counselor, you can rest assured that your client has been well
served.

Basically, that is how easy it is to put this kind of business
together and make it start paying off immediately. Remember, you
must be constantly soliciting new customers, and building the
number of customers you or your counselors talk to each day. You
should strive for an average of three counseling sessions per day,
five days per week, before seriously considering additional help.

At $10 per month from each account, this will give you $150
per week or a total account billing of $1,500 per week. By
factoring your accounts at 20% of their total value, you will have
an immediate cash income of $1,200 for the week. The factoring
company will handle all the billing and bookkeeping, eliminating
your need for those services.

The way to success in this business is, however, to keep this
happening every week. It will depend upon your advertising, the
service you give, and the reputation you build.

The prime requisite will be work and perseverance on your
part, but once you are established, with a few commission
counselors working for you, the business can easily gross $150,000
per year in even small to medium size cities. You now have the
knowledge; the rest - the action part - is up to you. Best of
luck!


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