Business Plan

for

JUSTICE JUDGMENT RECOVERY

2500 E. Imperial Highway, PMB #385

Brea, California 92821

714/996-8049

By combining old fashioned values such as honesty and integrity, going the extra mile, and using cutting edge computer technology, JUSTICE JUDGMENT RECOVERY will lead the market, striving to provide quality results every time.

Original Creation Date: 10/31/2000 (Personal Notes in Red added 10/14/04)

Table of Contents

1.0EXECUTIVE SUMMARYPage 3

1.1Objectives 4

1.2Mission 4

1.3Keys to Success 5

2.0COMPANY SUMMARYPage 5

2.1Ownership 5

2.2Location and Facilities 5

3.0SERVICESPage 6

3.1Services Description 7

4.0MARKET ANALYSISPage 7

4.1Target Market 8

4.2Marketing Strategy 8

4.3Marketing Literature 9

4.4Industry Competition 10

4.5Technology and Continuing Education 10

5.0PRICING STRATEGY AND SALES FORECAST Page 11

5.1Pricing Stategy 11

5.2Sales Forecast 11

6.0MANAGEMENT SUMMARYPage 11

6.1Organizational Structure 12

6.2Personnel 12

6.3Payroll Forecast 13

7.0FINANCIAL PLANPage 13

7.1Start-Up Summary 13

7.2Important Assumptions 15

7.3Projected Monthly Operating Expenses 15

7.4Break-Even Analysis 18

1.0EXECUTIVE SUMMARY

JUSTICE JUDGMENT RECOVERY is in the process of being formed as a partnership between Madam Justice and Her Son Justice (names changed to protect the innocent). This plan is written as a guide for strategy and managing this new business, and will also serve as a basis for a detailed marketing plan. The first day of business will be November 1, 2000.

  • The objectives of JUSTICE JUDGMENT RECOVERY are to generate a profit, and to

grow at a challenging and manageable rate while providing a worthwhile service to the

community.

  • The mission of JUSTICE JUDGMENT RECOVERY is to provide fast and reliable

recovery of monies due judgment holders who have been unable to collect themselves.

  • The keys to the success of JUSTICE JUDGMENT RECOVERY will be marketing and

networking, responsiveness and results, and generating word-of-mouth advertising from

satisfied customers.

  • The initial primary service offered by JUSTICE JUDGMENT RECOVERY will be Judicial

Judgment Recovery, although Child Support Recovery and Pre-Employment Screening

will be available but not marketed until in the future.

(These were two additional courses we had purchased from Windsor but later we

discovered these were not viable businesses for us.)

  • The local market for this business, while not new, is wide open for new and expanding

judicial judgment recovery firms.

(This was not true, but at the time I didn't have the skills to find out how many such

companies were actually operating in this county as there is no listing for

Judgment Recovery Services in the phone book.)

  • An initial financial analysis of the viability of this venture shows outstanding promise and

results. Several sources note that the judicial judgment recovery business is easy to

start, requires little up-front capital, and has the potential to be quite lucrative in today’s

“just sue ‘em” world. (Geez, I was so naïve.)

In conclusion, this business plan projects rapid growth and high net profits over the next three years. Implementing this plan, in conjunction with a detailed marketing plan, will ensure that JUSTICE JUDGMENT RECOVERY rapidly becomes a profitable venture for the owners and remain solvent.

(Unfortunately, it was just too unrealistic to believe we could receive two judgment payoffs each week for the amount of judgments we would be handling.)

1.1OBJECTIVES

The objectives of this business plan are:

A.To provide a written guide for starting and managing this judicial judgment recovery

business; a strategic framework for developing a comprehensive marketing plan.

B.The intended audience of this plan is only the owners of this business – it is not intended to obtain financing from outside sources.

C.The scope of this plan is to provide detailed monthly projections for the current plan year, and yearly summaries for the following two years.

JUSTICE JUDGMENT RECOVERY’S short term objective is to start the company quickly and inexpensively, with a minimum of debt.

JUSTICE JUDGMENT RECOVERY’S long term objective is to grow the company into a stable and profitable entity that the owners can easily and comfortably manage.

A.Profit

To generate sufficient profit to finance future growth and to provide the resources needed

to achieve the other objectives of the company and its owners (net profit of at least $125,652.08 in the first 14 months - totally unrealistic.) It is the goal of the owners to each make enough so that at the end of 3 years their personal investments will provide them with a comfortable living and they can pursue whatever endeavors that strike their fancies.

B.Growth

To grow the business at a rate that is both challenging and manageable, leading the market with rapid success and trustworthiness. We will grow from 1 small money case to 104 big money cases at the end of 3 years.

(We planned on taking on 2 cases a week and successfully collecting them, not knowing the odds against doing so.)

C.Citizenship

To be intellectual and social assets to the community and environment by volunteering to find 1 deadbeat dad each week and make him pay child support.

(We were relying on the information in the course we purchased from Windsor and did not realize this was not a viable objective for us - that by assigning their judgment to us a mother could lose everything if the father declared bankruptcy.)

1.2MISSION

  • Purpose

JUSTICE JUDGMENT RECOVERY will provide justice in the form of fast, reliable judicial judgment recovery to local individuals and businesses. JUSTICE JUDGMENT RECOVERY will provide solutions and results to those who don’t know how to do so themselves!

  • Vision

By providing fast response, informed expertise, and consistently high quality results, JUSTICE JUDGMENT RECOVERY will generate enough satisfied repeat business customers and new customers brought in by word-of-mouth to provide a stable client base. This will generate sufficient profit to provide a comfortable living for its owners and allow them to start making investments for the future.

  • Mission

Our mission is to help those who do not have the means or the knowledge to collect a judgment award which they are rightfully due. We vow to help any and all clients to achieve the justice awarded them by the courts.

  • Marketing Slogan

JUSTICE JUDGMENT RECOVERY – We’re Out For Justice!

1.3KEYS TO SUCCESS

The keys to our success will be:

  • Marketing and Networking Getting our name out there.
  • Responsiveness Responding to inquiries as fast as possible and only taking

on clients we can collect from.

  • Results Locating the debtor and his assets and forwarding money

to clients as fast as possible – keeping clients informed.

  • Relationships Developing loyal repeat business customers (retainers)

and satisfied customers that pass our name along to

potential clients.

  • Our Values Collecting in a legal, ethical, but aggressive manner and

reporting to our clients with honesty and integrity.

  • Profit A significant profit will be made on each case.

2.0COMPANY SUMMARY

JUSTICE JUDGMENT RECOVERY will be a start-up venture with the following characteristics:

  • JUSTICE JUDGMENT RECOVERY will initially be a partnership.
  • The goal will be to start the venture as inexpensively as possible, with personal financing.
  • JUSTICE JUDGMENT RECOVERY will be a home office start-up, utilizing one bedroom in the owners’ condominium.

2.1OWNERSHIP

JUSTICE JUDGMENT RECOVERY will be created initially as a partnership, owned and operated by Madam Justice and Her Son Justice. Incorporation, possibly as a LLC and possibly in Nevada, will be explored as a later option when recommended by our accountant.

2.2LOCATION AND FACILITIES

This is a home office venture, located in one bedroom of the owners’ condo in Placentia – north Orange County. At this time, we know of no other persons pulling court files at the North County Fullerton Courthouse for the purpose of judicial judgment recovery. This means north county is wide open for our services. (We shortly learned there were at 5 other businesses here.)

We wish to keep our privacy for security reasons so all customer contact will be by telephone - we will not advertise our home address and last name. We will rent a personal mailbox at Mailboxes, Etc. and use that as our mailing address. (The one we picked was for access convenience - it was just down the street. Unfortunately, the businesses in that particular shopping center did not have individual street addresses - they all had the same street number and then an individually assigned suite number. By the time we added on our PMB number, the address was often too long for some forms and our PMB number was dropped off. This ended up in some of our mail being misdirected. If Mailboxes, Etc. had its own address, we could just have added on our PMB number, making it look like a suite number but not saying so because that's against the law.)

We will use an email address provided free by National Judgment Network so our names will not be made public. (Instead, we created our own website and used that email address.)

Computer facilities will initially consists of Madam Justice’s existing Micron system. Utilities are already provided, included in the space rent calculated at $500.00 per month.

Current telephone line and cable modem serving the location will be used. Unfortunately, it will

not be registered in the business name because of the gigantic increase of costs between a

residence listing and a business listing. It will, however, have Caller ID and outgoing calls will have ID Blocked. (This cost saving measure really hurt us, as anyone who lost our phone number could not go to the phone book to find it.)

3.0SERVICES

Last year, 30,996 Small Claims Court cases were filed in Orange County. Of those, 18,381 went to trial and received a judgment. The person who loses the case is ordered to pay within 30 days and is called the judgment debtor. The person who is awarded the money judgment is called the judgment creditor. The court has no control or responsibility to see that a judgment is paid, so about 80% of those judgments – 4 out of 5 – will never be collected. The debtor is upset about losing and doesn’t want to pay – so he doesn’t! And the creditor, not knowing what to do, is shafted.

JUSTICE JUDGMENT RECOVERY can collect when the judgment creditor can’t. We have the resources, expertise, and determination to execute the awarded judgment and see justice served. We will secretly conduct a thorough investigation to uncover any of the debtor’s assets or sources of income, and take whatever steps necessary to legally seize them! We do not notify the debtor of what we are going to do – we just do it!

We use our computer sources to access credit bureau reports for information to track down the debtor, even if he has moved to another state. We will garnish wages, attach bank accounts, and seize assets as necessary. We collect the money to which the creditor is legally and rightfully entitled, plus interest! (Notice we did not mention how we would locate employers and bank accounts - we had no idea how difficult it would be to obtain this information without paying a fortune for it.)

The creditor puts out no money upfront for our service. We charge them neither an application fee nor expenses. All research and legal costs incurred are advanced by us. Our fee is a flat 50% of the revenues collected on the creditor’s behalf.

  • JUSTICE JUDGMENT RECOVERY will offer individual and business Small Claims Court lawsuit winners a quick, thorough and honest source of recovering the monies due them by judgment debtors.
  • In the future JUSTICE JUDGMENT RECOVERY will also collect for civil and superior court claims.
  • We also plan to offer Pre-Employment Screening and Child Support Recovery in the future.

3.1SERVICE DESCRIPTION

JUSTICE JUDGMENT RECOVERY will start out offering Small Claims court judicial judgment recovery, corresponding to what industry experts have identified as the primary opportunity in judicial judgment recovery. Presently we will only work judgments awarded in Southern California because of traveling to the courthouses.

  • Judicial Judgment Recovery

Start with small claims court judgments, then take on civil and superior court

judgments as our recovery acumen increases and we have enough operating

capital from the smaller cases to wait for recovery on the larger dollar cases.

  • Child Support Recovery

Although we have the capability to start immediately working this kind of judicial

judgment, we are not yet trained in it yet and won’t start marketing this service

until we are. Also, we’re hoping at some point in the future to do this kind of

recovery free of charge as our way of giving back to the community. (Not only did it

turn out that we could be hurting a judgment creditor by having their judgment

assigned to us, we ended up not being able to reconcile ourselves with making our

fee from that which should rightfully go towards supporting a child.)

  • Pre-Employment Screening

We can offer this service right at the start but, because we need to study up on

the field, we plan not to start marketing this service to local businesses until we

are fully aware of all the laws governing this market. (In California, you are required to

have a Private Investigator's License to perform this service so we were unable to

branch out into this market.)

4.0MARKET ANALYSIS

Marketing usually plays a vital role in successful business ventures. However, we have been told there are some firms in this field that don’t do any direct marketing at all; instead, they buy all their leads from places such as Windsor Systems and Info Tech, and rely on repeat business and word-of-mouth customer recommendations.

  • Our market is anyone, individual or business, awarded a Small Claims Court judicial judgment that hasn’t been paid.
  • JUSTICE JUDGMENT RECOVERY will start with limited sales literature (a prospective client postcard) and logo stationary - including business cards. (Almost immediately we added a brochure to our list.) We will be listed on the National Judgment Network referral page and utilize their free email service, and will also join other professional associations to be included on their referral services. We eventually plan to put up our own website.
  • There appears to be two main classes of competition – other home-based judgment collectors and business office judgment collectors. The competitive edge for JUSTICE JUDGMENT RECOVERY is that all known competition is located in the middle and southern parts of the county, leaving north county wide open for us.
  • Computer technology and skip tracing techniques are obviously critical components of this business: it will be important to remain up-to-date on software and continuing education to remain competitive. (At this point we didn't know how we were going to do this.)

4.1TARGET MARKET

The target market of JUSTICE JUDGMENT RECOVERY is anyone who has ever won a money judicial judgment and not collected it. (We shortly discovered this did not include judgments won by financial institutions and major businesses like department stores and car dealers because they had Collection Departments devoted to judgment recovery - or they sold their debts.) We will start with Small Claims Court judgments from the Fullerton courthouse because they’re easier; we have the capability to also work Civil and Superior Court judgments.

At this time we do not know what the breakdown is for people who file lawsuits, per age or social economic group, but we will research this.

We will buy assignment of the judgment for $1, legally transfer it to our name, then go after the debtor’s assets using sources not available to the general public or collection agencies. (We naively believed that buying a credit report would provide us with everything we needed – we later found out this was not so.)

We will be paid either all at once when a bank account is seized, in payments if a paycheck is garnished, or whenever an asset is sold – such as a house. (From the Windsor course we were lead to believe that selling personal possessions and houses was quite common - in actually it is rare as they usually do not provide the needed revenue.) We will send payment to the client within ten days of our receiving payment. (We later discovered that to protect ourselves from being accused of preference payment by a JD who afterwards filed bankruptcy - which meant we would have to return all monies and if our creditor didn't do so, we would be responsible for full payment; thus we had to extend this to payment within 91 days.)

4.2MARKETING STRATEGY

Our marketing to individuals and businesses will be primarily by word-of-mouth or direct solicitation (mail and/or in person).

A.Individuals With Unsatisfied Judgment Cases

At the start of business we will solicit with a letter or postcard those individuals whose names and addresses we have pulled from unsatisfied judgment cases at the courthouse. Because we know all of these leads have actually been awarded a judgment, we feel the response should be between 8 – 13%.

(Almost immediately we added a 2nd mailing of a brochure to non-respondents.

In actuality, we naively believed that every JD would thank us for offering our services. We also naively believed that the JD's would realize that 50% of a recovery was better than 100% of nothing - and that they should not hold onto the judgment for years in case the JD miraculously came through with payment.)

We anticipate reasons they might not respond to our solicitation to include:

  • Judgment was satisfied but the court wasn’t notified
  • Judgment creditor no longer lives at address and mail isn’t forwarded
  • Judgment creditor doesn’t read solicitation or doesn’t believe our advertising

(We should have anticipated that a large number would just not want to give up 50% to us because they still held onto the hope that the JD would pay them.)

B.Individuals Who Have Won A Judgment and Called the Windsor Hotline

At the start of business we will telephone solicit only those individuals whose names and addresses we received as a hot lead from Windsor Judicial Judgment Systems. Because these leads have actually been awarded a judgment and they’ve already called asking for help, we feel we should gain about 50% as clients. We anticipate the only reason they might not allow us to recover the money is their not wanting to pay our fee.