Starting a bail bonds business is just the first (and arguably, the easiest) step. The real hurdle is staying open for those first critical years.
A few tips for making it to year three:
The entrepreneurial side of you has taken over, and you’ve decided on the bail bonding industry for your new business venture. You’ve already talked to the jurisdiction you want to service, and you fully understand the requirements to open your doors and start writing criminal bail bonds.
Before you make that final step and sign your name with a surety company or write a large check to fund your bonding escrow account, you need to make sure you have the necessary tools and skills to remain open for your first three years.
Most people new to bonding believe that because their prospective clients are incarcerated, finding customers will be “like shooting fish in barrel.” The new bondsman may think that the phone will ring just because their name is listed in the intake area of the jail.
This is absolutely incorrect. Just because a defendant may find himself in dire need of bail bonding services, that doesn’t mean he’ll turn to you for those services. After all, you’re not the only guy firing into the barrel.
There are three questions you should ask (and try to answer) before you open the doors and write your first bail bond:
1. How will you win new customers from established bail bonding companies?
Remember: Defendants shopping for criminal bail bonds are not so different from any other type of consumer. People are creatures of habit. Frequent arrestees tend to use the same bonding company over and over, for the same reason they’re regulars at a restaurant or auto repair shop. Understanding the importance of customer loyalty and brand familiarity is paramount to a beginning bondsman.
A new bonding company must create a strong marketing plan that will show prospective new clients why their services are a better choice than other local bail bondsmen. Think carefully about how can you provide a better experience for defendants. Whether it’s through excellent customer service, payment plans, or discounted rates (check local statues regarding premium rates), the customer must have a reason to call you.
The next step is to get the word out. The new bondsman must be prepared to make himself known to future prospective clients before they need him. This means handing out lots of business cards to potential clients and having your company added to any bail bonding provider lists maintained by the criminal court system (if such a listing exists in your jurisdiction). It may also mean paying for advertising in bars, title pawn shops, public transportation stops, and some periodicals.
Click here for an introduction to regulations governing the bail bonding industry (related to fees and premiums, marketing, and business arrangements with attorneys or public officials). Rules differ from state to state.
2. What kind of record-keeping software do you need?
Before the grand opening, every new bondsman should select and install case management software that fits their needs. Many small start-ups overlook this step and feel they can make the purchase at a later time, only to realize that when they fall behind with data tracking, it is very hard to catch up.
From the time the first bail bond is signed, the criminal process has already started, and the clock is running. It may be easy to remember one or two defendants, but what happens if your business increases to writing 25 or 30 bonds a week? Better to get your software management system up and running before you’re busy serving customers.
Selecting software is a relatively easy process, as most developers offer trial periods to test their product. The minimum software requirements a bondsman will need include court date reminders, payment plan reminders, and data fields that cover all the information on your applications.
There are also a few companies that have web based software specifically designed for bail bonding, so take your time and choose wisely.
3. Do you have a great bail enforcement agent yet?
New bondsmen sometimes overlook the fact that a bond forfeiture is not the only reason that a defendant must be returned to the jail to relieve the company of liability. Factors such as non-payment of bond premiums, the defendant attempting to leave the jurisdiction to hide, and new arrests are just some of the reasons to return a defendant to jail.
Hiring quality bail enforcement agents is a task that should occur within the first thirty days of opening, if not sooner. There are many people who identify themselves as bounty hunters, bail recovery agents, or fugitive recovery agents, but finding one that fits your needs can be time consuming.
Hiring a bounty hunter that does not represent the type of business you are creating can be counterproductive and even lead to bankruptcy. The liability a company is exposed to lies in the hands of the bounty hunter.
[quote align=”center” color=”#999999″]The liability a company is exposed to lies in the hands of the bounty hunter.[/quote]
When choosing a quality bail recovery agent, there’s more to consider than how many arrests he has made; you should also take into account his personal manner, and how he relates to defendants and their families. Does he treat them with respect and courtesy, or disregard and hostility? A bounty hunter who makes your customers angry can cause so much negative word-of-mouth advertising that your phones could stop ringing.
A skilled and professional bounty hunter will keep a bail bondsman in business for many years by keeping the liability low. Each defendant that is arrested removes the potential for having to pay the bond in court and will increase the reputation of your business by taking liability seriously.
Although there are many other facets to consider when starting a bonding company, keeping these three considerations in mind will go a long way toward keeping you operational and generating cash flow for the first three years.
It’s also important to remember that every business owner must be willing to shift tactics and respond to an always changing economy. As your business grows, your target demographic may change, or the number of bond violations may increase; so remaining flexible is key.
About the Author:
Jim Evancho is owner of a Specialized Protection Services, an Atlanta-area investigations company.