We have all seen or heard of the shows on television that follow the lives of “Preppers.” These folks live their lives preparing for impending doom. Most all of us have little to no experience in any type of apocalyptic scenario; that goes for all those Preppers as well. Yet like worker ants, they blindly prepare.
The financial collapse midway through the first decade of this century, and resulting collections overload, should be a stark reminder to all of the importance of preparation. Now, I’m not saying we should all be as intense and obsessed as those depicted on television, but we can learn a lesson from our past.
Recent data from Equipment Leasing and Finance tracking sources puts overall sales in the pre-2008 range, and some companies are exceeding those numbers. While this is a great indication that the economy is moving in the right direction, foresight is extremely important.
We all love the best of times…..it’s like the summer of our existence. We sell and collect with ease, and bask in the warmth of things running the way they should. Some, like the grasshopper in the famous cautionary tale, see no winter in sight. No preparation is made for the impending cold, and when the winter of an economic downturn hits, those unprepared are left frozen in their ways without a source to turn to.
Unlike Preppers, we in the financial industry have seen a near-apocalyptic collapse. Charge-offs and collections are now dropping, and have been for some time. The regulations and lending guidelines set in place following the collapse have now begun to loosen. Money is more available for those who have less than “A” credit, and some have built credit back up after bankruptcy protection. **Spoiler Alert:** There will be another downturn! Charge-offs and Recoveries will spike again.
What can we do to be more prepared for the inevitable? Aligning your company with a reputable, knowledgeable, and experienced Collection Agency should be a key component of your plan. Here at Delta Management Group, Inc., we make the entire placement and collections process easy and predictable. While predictability isn’t usually a personal trait we strive for, it is crucial in a business relationship.
A placing company needs to know exactly the steps that are going to be taken on their behalf. They need transparency so they can check on placed accounts for progress, and most of all, there should be predictable and expected results. Building a lasting and mutually prosperous relationship should be the focus during this time. Even if your placements will be minimal right now, that relationship needs to be in place when the eye of the next storm hits. The process will already be in place, the results will already be predictable, and you will have a trusted source to help you work through it.
Remember, in economics, there will always be peaks and valleys. Preparation and strong Agency relationships are the key to weathering the next Collections winter storm!