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Value Of Bad Debt
Value Of Bad Debt
Value Of Bad Debt
Value Of Bad Debt
Value Of Bad Debt
Value Of Bad Debt
Value Of Bad Debt
Value Of Bad Debt
Value Of Bad Debt
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Value Of Bad Debt

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Published in: Economy & Finance, Business
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  • 1. What is the true cost of debt to you business?
  • 2. • If your company were to write-off a $1,000 debt, how much new revenue would you have to generate to make up for this written-off debt?
  • 3. Traditional Thinking Superior Thinking • $1,000 bad debt = $1,000 • $1,000 bad debt = 100% new revenue or one new pure profit. $1,000 contract.
  • 4. The debit cycle – $1,000 gross revenue – GST = $110 – $890 net profit – Operating expense 70% = $623 – $267 gross profit – Profit Margin@ 30% = $187 $80 net profit
  • 5. • Gross revenue $1,000*12.5= $12,500 to equal $1,000 net • 12.5 times profit • The first contract brings the reduction your company even, the second $12,500 contract brings your company in the black
  • 6. • $500 debt = $6,250 • $5,000 debt = $62,500 • $20,000 debt = $250,000
  • 7. Focus on the debt opportunity
  • 8. Retainer Vs Set-up fees Rocky Mountain Collections Other collection agencies set-up Retainer fees • $1,000 • $1,000 to $4,500 • Will be paid back during the • Will never be paid back collection process • Spending “good money • Not spending “good money after bad” after bad” • Industry average returns of • Higher collection returns 11-17% – 63% • Client retention average of • Higher client retention 25% – 75-80%
  • 9. Get started to collect the bad debt now!!! • Contact Rocky Mountain Collections @ 801.558.2016

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