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Bankruptcy can happen to anyone—despite their best efforts. And while most people understand that bankruptcy is generally bad for them, many don’t realize the details of how it can impact you. Read below to find out what happens to your credit score after bankruptcy and what you can do to repair your credit afterward.

What Happens to Your Credit Score after Bankruptcy?

After bankruptcy, your credit score can plummet. It will have a devastating impact on your credit health. The exact effects will vary, depending on your credit score and other factors. But according to top scoring model FICO, filing for bankruptcy can send a good credit score of 700 or above plummeting by at least 200 points. If your score is a bit lower—around 680—you can lose between 130 and 150 points.

That said, people with good to exceptional credit scores will see the most notable impact of bankruptcy. If your credit score is already fair or poor—below 670—you may not see large point drops. Yet, the end result will often still be a very low credit score. You simply don’t have as many points to lose to fall to that very poor rating.

Additionally, lenders may hesitate to lend to you if there is a bankruptcy on your credit report.

Do All Bankruptcies Have Equal Impact?

The type of bankruptcy you file and the amount of debt you need to get rid of have varying effects on your credit score.

What Happens to Your Credit Score after Chapter 7 and Chapter 13?

Consumers and small business owners usually choose from two types of bankruptcy filings—7 and 13. These are chapters in the federal bankruptcy code.

  • Chapter 7: This option is designed to liquidate, or sell off, your non-exempt assets or valuable property. The proceeds are used to discharge, or wipe out, your debt. In most cases, debtors don’t have enough non-exempt assets to repay their debt. But the court discharges those bills anyway. Chapter 7 is reported on your credit report for up to 10 years.
  • Chapter 13: With this option, you can discharge some of your debt, like medical bills. Meanwhile, you can also partially repay other debts—like a home mortgage or car loan—over a three to five-year period. The three major credit bureaus include Chapter 13 bankruptcy on your report for up to seven years.

Of the two options, Chapter 7 has the more negative impact on your creditors. That’s because you make no repayments. So, financial institutions view you as a higher credit risk. Your score may take a bigger hit with Chapter 7 because of this negative impression.

With Chapter 13, you’re making good on some or all your debt. So, it isn’t reported on your credit report for as long as Chapter 7. Also, you may give future lenders a bit more of a desirable impression of your credit worthiness due to this payment history. This can translate to a slightly more beneficial outcome for your credit rating.

What Bankruptcy Debt Discharges Do to Your Credit

The number of debts and amount you discharge also impact your bankruptcy credit score. Defaulting on several accounts with large balances has more effect than low debt elimination. Your credit history may also play a role if you have positive accounts as well as negative ones. Whether the ratio between these accounts is high or low can make some difference in your score.

Overall, these factors don’t carry much weight for your credit score after bankruptcy, though. The bankruptcy itself and how recently you filed are the most important things that credit agencies and lenders consider. No matter how high your credit score was before a bankruptcy, there will be a noticeable drop immediately after filing. But over time, the impact lessens.

Though Chapter 7 stays on your report for up to 10 years, the debt you discharge may go away sooner. That’s because most negative accounts fall off your report seven years or so after any final payment or activity. But some Chapter 13 debts may show up on your report after the bankruptcy drops off. That’s due to the three to five year repayment time frame. The seven-year period doesn’t start until the account becomes inactive.

How Soon Can You Improve Your Credit Score after Bankruptcy?

Some people mistakenly believe that getting rid of a debt will help their credit rating. So, they think their credit score might increase after bankruptcy discharge. Unfortunately, making regular debt payments is the only method that could improve your credit. But, you can still start working on raising your credit score immediately after a bankruptcy.

Your score won’t go up right away. But the sooner you get started on good credit habits, the sooner the impact will show on your report.

Your low post-bankruptcy credit score doesn’t mean you can’t get some forms of credit. However, it will be more difficult and the terms will likely be expensive. Your best option is a secured credit card. Responsible use and timely payments can help you down the road to a better credit score.

How to Rebuild Your Credit Score after Bankruptcy

While the details of your bankruptcy may remain on your credit report for up to 10 years, this doesn’t mean you have to wait that long to rebuild your credit. There are steps you can take to restore your credit score after bankruptcy.

Over time, your credit score will start to rise if you’re handling credit responsibly. In fact, you may notice an increase in your credit score in as little as 18 months. This increase may be enough to help you obtain some forms of credit, such as a credit card or auto loan, even with bankruptcy on your credit report.

Here’s a look at several steps you can take to start rebuilding your credit score after bankruptcy.

1. Check and Monitor Your Credit Report and Score

It’s important to check and monitor your credit report and score after a bankruptcy. Start by requesting a free copy of your credit report from the three major credit bureaus. Next, check to make sure all the information listed is correct. For example, make sure every account included in your bankruptcy now reports a zero balance. Once you make this initial assessment of your credit report, use a service, such as Credit.com’s Free Credit Score, to regularly monitor your credit.

2. Dispute Any Inaccuracies

If you find any inaccuracies on your credit report, be sure to file a dispute with the credit reporting agency. This includes any accounts under your bankruptcy that don’t show a zero balance. The credit dispute process can take 30 to 45 days to complete, but it’s an important step to take. In many cases, you can complete the dispute process yourself, but you can also seek help from a reputable credit repair service company if necessary.

3. Make On-Time Payments

If you’ve had a bankruptcy, it’s more important than ever to be sure you’re making on-time payments. Building a history of on-time payments can help restore your credit score and show lenders you’ve taken control of your finances. If you haven’t done so already, create a budget to help manage your money. This step can ensure you always have enough funds available to pay your bills on time and help you set up an emergency fund.

4. Make Your Phone and Utility Payments Count

You may not realize it, but your phone and utility payments aren’t usually included in your credit report. Even if you pay these bills on time every month, it won’t impact your credit score. After bankruptcy, you need to make sure you get credit for every positive step you take.

Fortunately, there are services available, such as Credit.com’s ExtraCredit®, that help you report these payments to your credit report. Be sure to sign up for one of these programs as soon as possible.

5. Pay Down Debt

If you have any credit accounts that weren’t part of your bankruptcy, make sure you continue to repay these loans as quickly as possible. Do your best to pay off at least 70% of this outstanding balance to bring your credit utilization rate under 30%. For larger credit accounts, such as student loans, paying off 70% right away may not be possible. In these cases, making your regular monthly payments is enough to start rebuilding your credit score after bankruptcy.

6. Obtain a Secured Credit Card

Once you start rebuilding your credit, you may qualify for a secured credit card. This type of credit card requires you to put down some type of security, typically cash. Regularly using this credit card and making on-time payments is a good way to start repairing your credit. After a year or so of making on-time credit card payments, you may qualify for an unsecured credit card.

7. Control Spending

If out-of-control spending led to your bankruptcy issues, take the time to get control of your spending. Set a strict budget that allows you to pay all your bills plus set some money aside each month for savings. Once you start rebuilding your credit, resist the urge to open too many credit accounts. Instead, only open credit accounts that fit your budget.

8. Apply for a Credit-Building Loan

You can also consider taking out a credit-building loan. Typically, these are smaller loans for amounts such as $500 or $1,000, and they come with a set repayment schedule. These loans are specifically designed to help rebuild your credit. You may find credit-building loans available at smaller community banks and credit unions.

Start Improving Your Credit after Bankruptcy Today

To eventually raise your credit score after Chapter 7 or Chapter 13, you must stay aware and alert about your credit usage. Check your credit with Credit.com’s free credit report card. This provides you with a point of reference as you start rebuilding your credit.

Stay on top of your credit usage and how it’s reflected on your credit report. Access convenient tools that allow you to do this quickly and easily. Be smart and responsible with your finances. Then check on how your efforts are paying off with timely credit score monitoring.

Source: credit.com

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The following is a guest post by Daniela MckVicker, a blogger for Top Writers Review.

Considering offering credit to your customers? A credit policy is a document that you need. It outlines the conditions of credit sales, giving your customers one more way to make orders. For your business, it helps encourage new sales and manage associated risks.

If you need help with writing a business credit policy, consider these guidelines. 

What Is a Credit Policy?

A credit policy is a document that defines credit and payment terms for customers and policies to mitigate risk from extending credit to those who can’t meet their obligations. These guidelines are critical for businesses selling their products and services in credit. 

When broken down into essential parts, a credit policy includes:

  • Evaluation of a customer’s creditworthiness 
  • Decision process to extend credit to customers (terms, conditions, etc.)
  • Credit limits for customers 
  • Methods of dealing with delinquent accounts 

A sound credit policy minimizes the risk of not receiving funds from sales made on credit. So, writing this policy requires knowledge of a company’s financial capabilities, applicable laws, and risks involved. 

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Before Writing: Credit Policy Do’s and Don’ts

If you’re writing a new draft or updating the current credit policy, keep these tips in mind:

  • Don’t keep it confidential. Everyone in your company should know how you’re going to manage credit sales.
  • Don’t make the policy so strict, so you have opportunities to adjust the credit decision-making process later.
  • Don’t make the policy too broad and/or open to interpretation. This might cause conflicting interpretations by department members or other stakeholders.
  • Do make credit approval limits clear for those with authority to grant credits.
  • Do include procedures to reduce credit risks and sales where customers are unable to pay off the debt.
  • Do include guidelines on keeping company and customer information private.
  • Do state that any unlawful or unethical behavior within the credit department is strictly prohibited. 

How to Write an Effective Business Credit Policy

Let’s go over each important section in business credit policies. 

1. Explain the Purpose of the Policy

The first section of a business’s credit policy is dedicated to the conditions, responsibilities, and rights of the credit department. Describe how it works and helps to meet the goals you’re trying to achieve as an organization. 

For example:

“The credit department is responsible for establishing payment terms for the company’s customers and monitoring these terms to ensure compliance. The present credit policy describes alternative payment methods to customers.”

Treat this section as an introduction that you’ll later use to teach employees. Save the specifics for the subsequent parts – there’s plenty of space for that. 

2. List the Roles and Responsibilities of Credit Department Members

Explain the duties of each member who works in the credit department. By doing so, you’re defining their roles and letting them know what’s expected of them. 

Here are some common credit department positions, along with brief descriptions:

  • Chief Financial Officer (CFO). Responsible for managing the entire department, making policies and finance-related decisions
  • Credit manager. Organizes and controls the credit department by training personnel, setting up credit rules and procedures, and authorizing credit limits. Reports directly to CFO
  • Collections manager. Manages the credit collection effort by collaborating with third-party collection agencies. Reports to the credit manager
  • Credit analyst. Reviews financials, evaluates and assigns credit lines for customers
  • Billing clerk. Prepares the invoices and sends them to customers in time. 

3. Describe Credit Application Process

The credit application process is the process that leads to the initiation or extension of credit to a customer. In this section, the main purpose is to explain this process and the procedure of approval. 

To apply for credit, customers must also provide a number of documents. Commonly, companies request credit bureau reports, credit references, financial statements, and public records. 

Some of the most important points to provide in this section:

  • Description of conditions on which a customer can apply for credit
  • Documents the customer must provide to get their application reviewed (bank references, statement of payment terms, etc.)
  • Identification of credit department employees responsible for reviewing customer applications
  • Description of the customer’s creditworthiness evaluation and relevant credit limits. 

4. Decide Who Can Get Extended Credit

Obviously, your business can’t give away credits like Christmas cookies. In some cases, customers will have histories of not delivering on their obligations–so your policy should call for credit checks on every applicant. 

In addition to asking customers to provide relevant documents, have your credit department also get in touch with nationwide credit reporting agencies. The three main credit bureaus are Equifax, Experian, and TransUnion, which can provide a free credit report once every 12 months. 

Advise your customers on how and when to talk to a credit reporting agency about their reports. Keep in mind, however, that you’re legally required to ask customers for permission before making a credit report inquiry. 

5. Set Credit Limits

The credit policy defines the credit limit for your business. In other words, it gives your employees instructions on the amount to give and when to stop extending credit. Following these guidelines will help to reduce many risks. 

For small businesses, a $5,000 credit limit is reasonable. This amount could reach up to $10,000 for a mid-sized company. However, the right amount for your business depends on two things: a customer’s credit history and your liabilities. 

First, take a good look at a customer’s documents (income, debts, etc.) to determine the limit they could realistically handle. Second, ask yourself if you could still pay your own liabilities if that customer failed to pay credit on time. If the answer is “no,” then reducing the credit limit should be a good idea. Make sure to include these credit limits in your policy.

6. Define Terms and Conditions of Credit Sales

These are the terms and conditions for delivering products or services on credit. They’re essential for credit applications, sales contracts, emails, orders, and invoices–all sales-related documents. 

They protect your rights by setting credit limits, customer responsibilities, and other important points. For example, describe when you will begin charging interest, extension conditions, interest rate, late payment fees, early payment discounts, and deposit requirements. 

7. Plan for Handling Past Due Accounts

Unfortunately, even with your best effort to manage credit risks, some customers won’t pay collections on time. That’s why you need to have a plan for pursuing unpaid debts. 

In most cases, credit policies instruct to send urgent payment reminders. Consider using debt collection agencies if a customer doesn’t pay after getting notified multiple times. Should that customer fail to meet their obligations on more than one sale, close their account. 

8. Make Changes

A credit policy should be “a living document.” To evaluate if their credit department helps to meet business goals, companies have to measure its performance. This is where specific goals based on the company’s strategy come in. 

For example, the credit department might be tasked with reducing the average number of days it takes to collect on credit sales by 20%. Comparing credit sales data for a defined period defines if the credit department met this goal. 

The effectiveness of credit department efforts measured by goals defines changes to be made in the policy. If the department struggles to meet the goals, consider making appropriate changes to the document. 

Source: credit.com

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A proposed set of higher risk weights for mortgage-related assets at banks could broadly compound current strains on home affordability and conflict with other policies and rulemaking promoting it, critics testified at a congressional hearing Thursday.

The new rules not only increase portfolio lending expenditures for low down payment loans, but aspects like a possible change affecting servicing rights also add costs for lenders and the market at large, said Bob Broeksmit, president and CEO, Mortgage Bankers Association.

The rights and associated work of handling loan payments are a key cost for the mortgage industry at large and if depositories further withdraw from investments in them, costs for nonbank lenders already struggling to profit due to higher rates could rise, he said.

“The mortgage servicing value is an integral part of how every mortgage is priced, not just mortgages made by these banks,” Broeksmit said at a House Financial Services subcommittee hearing. The subcommittee involved is focused on financial institutions and monetary policy.

Mortgage servicing rights already have a relatively high risk weighting under current bank capital rules that discourage holding them in amounts above 25% of Tier One common equity. The proposal would lower the cap to 10% of common stock or other assets in that category.

Broeksmit also reiterated his past criticisms of moving from a risk-weighting of 50% for most home mortgages outside the income-producing sector, to a proposed step-up of percentages in that category by loan-to-value ratio that’s in excess of global Basel III rules.

“If these increased capital requirements go into effect, banks will make fewer mortgage loans or they will raise the price,” said Broeksmit.

He also doubled-down on his previously stated concerns about the fact that the new requirements don’t account for the additional protection private mortgage insurance can provide to loans with lower down payments.

Others testifying said the capital rules could put a strain on mortgages that have balloon payments due in a higher rate market.

“In a time of historic inflation, the fastest increase in interest rates in modern history, and a growing likelihood of the credit crunch, now is not the time to raise capital levels,” said Committee Chair Rep. Andy Barr, R.-Ky. “Such action threatens to further constrain credit availability and put already-sensitive sectors such as commercial real estate in further peril.”

The new capital rules also could be a constraint on lines of credit used both by businesses and consumers, Broeksmit said.

“If I understand this voluminous proposal correctly, banks would be required to hold capital on the maximum amount that could be drawn rather than the amount that is outstanding. That could have a really chilling effect on … small business credit and also home equity lines of credit where consumers take that out and use it as they need it,” he said.

Other speakers and some Democratic members of Congress debated the assertion that the rule would hurt access to financing.

“We strongly disagree that new capital requirements will undermine credit availability,” said Alexa Philo, senior policy analyst, Americans for Financial Reform, after Rep. Ayanna Pressley, D.-Mass, asked whether the new rules could protect the availability of lending in a downturn.

There’s a significant body of research that has found that domestic financial institutions with higher reserves provided more financing than those with lower capital levels, Philo said.

“Well capitalized, large U.S. banks had higher loan originations and liquidity,” she said.

Source: nationalmortgagenews.com

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MILWAUKEE, Sept. 14, 2023 /PRNewswire/ — Northwestern Mutual, a leading financial security company, announced today that Anne F. Ackerley and Andrew J. Harmening have been appointed to serve on its Board of Trustees. As a mutual company with a responsibility to policyowners, Northwestern Mutual has a Board of Trustees elected by its policyowners with responsibility … [Read more…]

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Marketing is an expense, but it can also be considered an investment in the success of your small business. When done correctly, it can build your brand, draw prospective customers to your website or store, and ultimately drive revenue.

To make the most of your marketing dollars and successfully promote your small business, you’ll want to avoid the following mistakes.

1. Not making market research a priority

Market research, one of the first stages in the marketing process, is used to confirm demand for your business’s product or service, identify its target market and assess competitors.

“If we think of marketing, it’s not only the promotion of services, the promotion only of products. It’s the creation of products. It’s the creation of services. It’s connecting with people,” says Islam Gouda, a marketing scholar and author. “As a small business, I want to understand how my customers are thinking about different aspects in terms of their wants or their needs.”

When researching your target market, consider the platforms and channels they frequent and market your business there.

”Make sure that you’re really focusing on how people are going to find you,” says Jennifer Fortney, president of Cascade Communication, a PR and marketing communications company based in Chicago. Beyond the largest, most popular platforms, Fortney suggests also looking into niche publications and local magazines.

2. Brand inconsistency

“Always have consistent branding across all your channels: your social media, your LinkedIn profile, your website, your brochures, your fliers, whatever it is,” says Vanessa Castillo Bell, a consultant for the Arizona Minority Business Development Agency. “Once you have consistent branding all across your channels, your customers will recognize your brand.”

Establish brand guidelines for the logos, colors, images and text you’ll use across your marketing materials. Consistent branding creates a brand identity that looks professional and can offer benefits such as increased customer trust and loyalty — which can all lead to higher revenue for your business.

3. Not having a clear website strategy

There are many platforms on which to market your business, but your website is especially important. “Businesses own their website. That’s their online home,” Castillo Bell says. Therefore, you have complete control over what information you provide and how.

Castillo Bell recommends learning search engine optimization (SEO) techniques and identifying keywords that your customers would use to search for your products and business. Including those keywords in blogs, newsletters, white papers, videos and other types of content marketing can help your website appear on search engine results pages and gain traffic. Optimizing your website for mobile — since many consumers search online using their phones — is another key step, Castillo Bell says.

You’ll also want to make important details about your business easily accessible to website visitors. “If you’re a local business, be very specific about your location, what areas you serve, and put all of that information on your website,” Fortney says.

Building an effective marketing strategy requires patience; however, a mistake many businesses make is that “they are looking for a quick process,” Gouda says. “They are looking to generate revenue on the spot. They do not wait for return on investment,” he says. Ultimately, “they confuse marketing and sales.”

In reality, the results from your marketing strategy may not be noticeable for months. Researching your target audience, creating consistent messaging in all your marketing materials and exploring free marketing ideas can all help you stay the course.

From Facebook and YouTube to Instagram, TikTok and many more platforms, social media is a great place to market your business. However, trying to build an online presence on multiple channels doesn’t guarantee success.

“Just because a social media outlet or a social media platform exists doesn’t mean you have to use it. If you stretch yourself too thin, you’ll do none of it well,” Fortney says. “Own one. Pick one that’s the best for your business and your product or service, own it.”

After you’ve become successful in managing one platform, consider whether you want to add another social channel to your marketing strategy.

6. Not utilizing free resources

Before paying consultants to help with your marketing strategy, “one resource you should take advantage of is your free agencies,” Castillo Bell says.

The U.S. Small Business Administration, Small Business Development Centers, Minority Business Development Agencies and community development financial institutions, as well as nonprofit organizations for women, minorities and veteran small-business owners, can all be good options when you need free or low-cost help with your marketing plan.

Source: nerdwallet.com

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This article is part of a series put together by the Total Mortgage marketing team that provides sales professionals with a crash course in marketing and self-promotion. To read other articles in this series, click here.

Video marketing is kind of having a moment right now.

In the past, using video to market to consumers was the m.o. of big companies with a lot of money and manpower to throw around. That is, not really in reach for your average loan officer or realtor. Now, however, it’s easier than ever to create simple videos and get them in front of potential customers on your own.

Why add video to your marketing strategy?

Interest in video is growing fast, and it won’t stop any time soon. Last year, Facebook’s video viewership doubled from 4 billion a day to 8 billion—in just 7 months. The experts at Syndacast, meanwhile, predict that a whopping 74% of internet traffic will be video by 2017. Basically, all signs say that the next big trend in digital marketing is video. Combine that with the potential to increase conversions by up to 30%, and it’s a trend you want to be a part of.

SEO (search engine optimization) benefits are another point to consider. Put simply, Google likes to feed people the best content they can. When their search algorithm sees a multimedia page, like an informative blog with an accompanying video, they’re much more likely to recommend your page to searchers.

Think you’re on board with video? Great. In this guide, we’re going to assume you’re working on some kind of short informative video, but that isn’t the only option available to you.

Types of marketing videos

Filming without pinning down a format can set you up for a lot of wasted time in front of the camera. These are a few of the most common kinds of videos you’ll see.

  • FAQs address specific problems or questions a viewer might have, and are usually short, semi-scripted, and informative. You can also use a similar format to highlight certain products or give a demonstration.
  • Interviews involve a conversation, either between multiple people on camera or between one person speaking to another off camera. They work best when you have access to someone with a skill set or experience level that entices your audience.
  • Testimonials put your customers on screen to advocate for you. These sometimes have an interview-like format, though they may require more scripting.
  • Culture videos put you (and your company) front and center, giving customers a taste for who you are and why you do what you do with the help of dynamic music, candid footage, and smart voice-overs, interviews, or graphics.
  • Ads require a tight focus, careful scripting, and a clear beginning, middle, and end. They often cost more than other video options and will probably require the help of an outside production company.

Marketing video basics

Whether your video team is just a neighbor with a camera or a whole marketing department, it helps to have a firm handle on what goes into making a marketing video. While it can be a complex process, ultimately, you really only need a few basic things to get started:

  • A decent camera and microphone
  • Someone knowledgeable to man the camera for you
  • Access to video editing software
  • Good lighting
  • A quiet, non-distracting place to film

Of course, there are plenty of ways to step up your game. That can mean getting better equipment, springing for a green screen, or shooting b-roll (that is, relevant secondary footage you can cut in to demonstrate ideas or give viewers a break from primary footage).

If you’re just starting out and don’t have a large budget for video, keep it simple. There are plenty of services that help you make the most of the devices you already have and integrate easily with email. Bombbomb and Talk Fusion are two good places to start.

Where to use your video

Before you even start putting together a script, you need to decide where this video is going and how you plan to showcase it. That’s because what you put around the video needs to have some impact on the content of it—and vice versa—if you want to engage people.

Here are some common areas where companies use video (a few of which we’re already using at Total Mortgage):

Email. If you have any sort of email campaign in place, be it an extensive drip campaign set in motion by first contact or simple check-ins as a customer hits milestones, adding relevant and helpful videos can make your emails go farther. A lot farther. Video can increase email click-through-rate by up to 300%.

Home page.  If your home page is lacking personality, a video can help add a human touch. Typically, these take the form of about us or product highlight videos, but don’t let that limit you. Just keep in mind one thing: your home page is prime real estate. It’s what potential clients and others interested in your business will see first. Whatever you choose to put here should be well-done and relevant.

Testimonial pages. If you have a great relationship with a satisfied borrower who has an interesting story to tell, a customer story video can be a helpful addition to your testimonial page.

Social media. If your video is informative, funny, or short and ad-like, you would do well to add sharing it on social media to any other plans you have for it. And that doesn’t mean throwing your video up on YouTube just in case. As we’ve already mentioned, Facebook is making moves to become a major player in the video content game, and with all that targeting data at their fingertips, it’s not hard to see why. Other social options, like Snapchat and Twitter can also help boost your signal.

Ad campaigns. If your business in on the larger side and you’ve already dipped your toes into the video pool with good results, it might be time to consider going bigger. You can use an ad pretty much anywhere–on your homepage, your about us, your social pages. If the quality is high enough, you can even look into advertising online or on tv.

Writing your script

To film a video right, it really helps to know in advance what the whole thing is about. That’s where a script comes in. Scripts help you plan out the dialogue of your video. They are also important for blocking out a video and deciding where your cuts and footage would make the most sense. Often, you’ll need to go through several drafts to find one you’re happy with. Here are a few more tips to help you get it right:

Start with your audience. You may have an idea for a great video, but unless someone wants to watch it, you’re out of luck. Before you settle on one idea, make sure you know who your audience will be. If you’re in the housing industry, this can mean anything from hesitant first-time buyers to satisfied past buyers willing to refer others.

Similarly, don’t try to appeal to everyone. This is fairly standard marketing advice, but it’s something you should still keep in mind when you’re coming up with a video concept. Even though the whole point of video may seem to be racking up that view count, you’re more likely to get leads from a small but targeted audience. So instead, tailor your video to fit a specific demographic.

Personality is important. If you’re going to go through the effort of putting yourself on camera, a vital part of doing the job right means giving viewers a feel for who are. Make sure you write the same way you speak with clients in person.

Getting in and out is the hardest part. Think about some of the low budget, small business videos you’ve seen over the last few years. Where do you always end up cringing the most? Yep, the beginning and the end, where awkward intros and abrupt fades-to-black reign. It’s easy to spend most of your time polishing the meaty parts of your video, but to avoid ruining an otherwise strong video, don’t forget about the transitions.

Keep your videos short. No matter how much footage you take, remember that viewers have short attention spans. Depending on the video, you should aim for between 30 seconds to 2 minutes—but shorter is always better.

Don’t worry too much about what you put on paper. Scripts change all the time. Sometimes what you have written down just doesn’t end up fitting. In some types of videos, like a Q&A session or a short interview, you’re probably going to want to skip the script all together and stick to some pre-chosen questions. This is especially true if you think you’re going to have difficulty speaking naturally on camera.

Tips for filming day

If you’re new to this whole video thing, you may not realize how much work goes into the filming alone. Here are a few tips you’ll want to keep in mind before you get in front of the camera.

  1. Wear a solid-colored, non-green shirt. Patterns can be distracting on camera, and green may interfere with editing later on if you’re using a green screen.
  2. Practice reading your script aloud before you start filming. As we’ve already mentioned, you want to sound as natural as possible in front of the camera. A read-through will help you pick out the places that trip you up and get used to speaking conversationally—that is, not too fast or too stilted.
  3. Decide where you’re looking. Generally you’ll want to look directly at the lens, but depending on the video, you may need to look at an interviewer or something on screen.
  4. Relax. The tenser you are, the more it’s going to show up in your voice and face. Try to pretend the camera is a person and talk to it, not at it.
  5. Take a look at your takes as you finish each one. You’ll be able to see what you need to tweak in your next take.
  6. If you’re working with a videographer, talk to them the day before. It’s likely they have some other tips and requirements that are more specific to the material you’re filming.

Next steps: editing your marketing video

Once you have all your footage, it’s time to edit.

Ideally, you’d have the help of whoever manned the camera, be they hobbyist neighbor or full-time videographer, but that’s not always an option. If you’re planning on editing your video yourself, this Hubspot post offers a breakdown on several free options for video editing software. This blog post from Wordstream also has some helpful knitty-gritty tips when it comes to things like lighting, editing, and music on the cheap.

Want more?

You can learn more about what the Total Mortgage marketing team does for our loan officers by checking out other articles in this series. If you’re in the housing industry, stop by our career portal to learn more about us as a company.

Source: totalmortgage.com

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Are laundromats profitable? Or, are laundromats a dying business? Learn how much laundromats make and if laundromats are a good investment.

Are laundromats profitable? Is buying a laundromat a good investment?

Ever wondered if owning a laundromat is as profitable as people say?

I’ve been seeing a lot of videos on social media lately talking about how much money laundromats make (seems like it’s a popular small business idea right now!). So, I wanted to do my own research and learn as much as I could on the topic of laundromat businesses to see why it’s trending so much.

Whether you are looking to make extra income or if you plan on opening several laundromat businesses, there are some things to think about before you get started.

In today’s article, we’re going to talk about:

  • How profitable a laundromat can be
  • The pros and cons of owning a laundromat
  • Why a laundromat may be a smart investment
  • Tips on how to find a laundromat to buy

And more.

Quick summary: Yes, laundromats can be a way to make money (and even passive income!) due to people needing to wash their clothes and low costs to run. However, the amount of money that you can make is based on factors such as location and maintenance costs (new machines can be expensive!). High-quality laundromats with lots of amenities are in, and the old days of dirty and hot laundromats are not.

Are Laundromats Profitable?

Is owning a laundromat a good investment? Is owning a laundromat a good way to make money?

According to the Coin Laundry Association, there are around 35,000 laundromat businesses in the United States and nearly 95% of laundromats succeed.

That is a pretty good success rate.

It’s important to understand that, like with any other business, laundromats require an investment of money—both initial and ongoing. You’ve got your rent, machines (you will need more expensive commercial laundry equipment), utilities, and insurance.

The good news is, your income would hopefully be higher than these costs, making you a profit at the end of the month. Some people are able to run a laundromat as their full-time income, and for others it may simply be one of their side hustles.

The amount of money that you can make from a laundromat depends on your management skills, the location of your business (the average laundromat user lives within 1 mile of the laundromat that they use, so you want to be close to your customers!), and more.

Related content:

Is a Laundromat A Smart Investment? Do Laundromats Make Money?

This is a hard question to answer, as everyone is different!

For some people, a laundromat can be a smart investment, for others it may not be. The good thing, though, is that you are reading this article so that you can figure out if owning a laundromat is for you or not.

Yes, many laundromats make money. On average, a laundromat can earn a profit of around 20% to 30%.

Note: Before making a decision, I highly recommend reaching out to a financial advisor before making any decisions.

Factors Impacting A Laundromat’s Net Income

There are numerous things that can impact how much money a laundromat can make such as:

  • Location– The location of a laundromat is important in how much money you can make. This is because a laundromat located in a populated area often makes more money than one in a less populated area. The reason is, that when there are more people, there are more people likely to use laundromats.
  • Competition– If there are other laundromat businesses nearby, this could impact your profit because you now have competition. This is because too much competition may mean that there are less customers coming to your business.
  • Demographics– The demographics of people living around the area of your laundromat are important. For example, laundromats tend to do better in areas with a lot of renters, college students, or households without a washing machine or dryer (of course).

We recently stopped to use a laundromat while we were traveling in our RV. One thing we noticed was that this laundromat had a ton of amenities. Now that I’m thinking about it, this laundromat business owner was smart. They knew what their potential customer needed. They opened a laundromat right next to a popular cross-country trail, and added great amenities such as snacks and even a pay-to-use shower. These factors helped this laundromat stand apart from its competition and probably led to more people using it because it was a one-stop shop.

Some laundromats can earn profits as high as 35% or more! These are usually high-volume operations in urban areas with lots of people living nearby and they tend to offer a wider range of services such as wash-and-fold or dry-cleaning.

Owning a laundromat can be a smart investment for some people because they can possibly have a stable flow of income.

However, you will want to keep in mind that success in this type of business still depends on careful planning, an understanding of your local market, and more. Not everyone will succeed, of course.

How To Find Laundromats For Sale

Jumping into the laundromat business begins with finding a laundromat business that is for sale, or starting your own business from the ground up.

If you are looking for a laundromat business that already exists and is for sale, here are some tips and strategies for locating a laundromat for sale.

Online platforms– Many websites list laundromat businesses for sale. Examples include BizBuySell and LoopNet. These platforms can be your first stop so that you can easily look at laundromat listings. I was able to find many laundromats for sale, ranging from around $100,000 to over $1,000,000. These sites will give you a lot of information too, such as the revenue, monthly rent that the laundromat pays, the year it was started, and some background on the business.

Broker assistance– There are commercial real estate brokers with experience in the industry that can be invaluable resources. These individuals often have connections and insights that you may not have as an individual buyer. You may want to search for commercial real estate brokers in your local area and see who can help you find a laundromat business for sale.

Local advertisements– Sometimes laundromats are listed for sale in your local newspaper. You can see if there is a business for sale section in your local paper to get started.

Important Things To Think About When Purchasing A Laundromat

When you come across a potential laundromat to buy, here are some things to think about:

  • Location– As mentioned in the earlier sections, the location of a laundromat plays a very important role in if the laundromat will be successful or not.
  • Condition of equipment– Commercial laundry machines are expensive. These are not the washer and dryers that you have in the home you live in. These are meant to take a lot of loads and be running nearly all the time. Due to this, you will want to inspect the machines thoroughly and, if possible, have a professional technician check them. This is because broken or old machines could result in costly repair or replacement costs.
  • Business finances– If you find a laundromat that you are interested in, then you should ask to see their financial records and carefully review them.
  • Lease agreement– Many laundromats do not own the building that they are doing business from. Due to this, you will want to look at the terms of the lease. A laundromat with a long-term lease allows for longer operations without the risk of eviction or a sudden rent increase.
  • Demographics and competition– As you read in an earlier section, knowing more about the demographics of the local area, as well as about your laundromat competition, is important too.

Remember to approach this process with patience. Investing in a profitable laundromat is a journey that requires careful planning, research, and due diligence.

Owning A Laundromat

Operating a laundromat is more than just collecting coins from machines. There are maintenance needs, customer concerns, and potential unexpected issues that you may come across.

Below, I take you through the typical day-to-day operations of a laundromat.

Day-to-Day Operations Of A Laundromat

Opening up– Regular, reliable hours are important in the laundromat industry. Therefore, opening up the store in the early morning is always a good idea as many people like to get their laundry done first thing. Plus, many of your customers will be repeat clients, so making sure that you open up at the same time each day is required.

Machine maintenance and cleanliness– When running a laundromat, you will need to check on the washers and dryers, perform required maintenance, and make sure that your business is clean. You will also want to make sure you are well-stocked with detergents and fabric softener.

Customer service– While the average laundromat only has 2 employees or less, you will want to have good customer service. After all, a happy customer is far more likely to return and recommend your services to others.

Financial management– Collecting payments and record-keeping is something that is done every single day.

Tips on Managing a Profitable Laundromat

  • Sell extra services– Successful laundromats tend to sell many more services other than just self-service laundry. Due to this, you may want to also try diversifying your income streams so that you can make more money from your laundromat. You can sell other services such as wash-and-fold services, dry-cleaning, dog washing stations, showers, or even have vending machines.
  • Maintain your machines– Regularly maintaining your washer and dryer machines minimizes downtime and expensive repair costs, so that your laundromat can run smoothly.
  • Promote your business– Word of mouth is so important in this type of business, but don’t shy away from using social media or local advertising to draw in potential customers.

Running a money-making laundromat is much more than keeping the machines running. It involves good customer service, finding more services to sell, and marketing your laundromat business.

Frequently Asked Questions About Laundromats

Here are common questions about owning a laundromat.

How much profit can you make from a laundromat? How much do laundromat business owners make?

The profits from laundromats vary depending on location, operation expenses, size of the laundromat, the amenities you sell, and more. The average laundromat business sees a profit margin of around 20% and 30%.

The national average income for self-serve laundromats ranges between $15,000 to $200,000 per year. As you can see, that is a wide range and that is because it just depends on so many different things.

What are the pros and cons of owning a laundromat?

Like with any business, there are positives and negatives. Owning a laundromat isn’t for everyone.

Owning a self-service laundromat can earn you money and can be a stable, low-risk investment with low operating costs. It can be a fairly passive income stream as well, as you don’t need many employees (the average laundromat has 2 or fewer employees). However, running a laundromat isn’t all easy, there are challenges such as high start-up costs, machines braking, and more.

The challenges of running a laundromat include that high-quality commercial laundry machines can be quite expensive and purchasing or leasing a location with enough space for machines and customers can be a significant portion of startup costs. Also, wear and tear is going to happen in a laundromat as machines get constant use, and the cost of repairing or replacing machines can add up.

Is owning a laundromat a smart investment? Is owning a laundromat worth it?

Owning a laundromat can be a smart investment, and it can be worth it for some people. But, it will cost you money.

It costs around $100,000 to $300,000 to start a laundromat. Starting or buying a laundromat can be high, but it can also earn you a steady income. But, that doesn’t mean that it’s a smart investment for everyone. There are many factors that go into running a successful laundromat.

How to find laundromats for sale?

You can find laundromats for sale through websites, commercial real estate agents, or business brokers. You can also network with existing laundromat owners or associations who can provide insights into potential sale opportunities.

Are laundromats a dying business?

The laundromat business has changed over the years, but they are still very much needed. People use laundry facilities all the time, including myself such as when I am traveling in my RV or boat. Everyone needs to wash their clothes.

There are ways to keep your business up to date, such as having a laundromat that accepts different methods (such as credit card and cash), having a drop-off service, and making your facility comfortable (such as with WI-FI, TV, beverages, etc.).

What are the key success factors for running a laundromat?

Successfully running a laundromat depends on many factors like the location, maintaining clean and well-functioning machines, providing good customer service, having amenities (such as air conditioning or head depending on the temperature, TVs, etc.), and more.

Are Laundromats Profitable? – Summary

I hope you enjoyed this article on whether buying a laundromat is a good investment or not.

Here’s a quick summary of what we learned above about this business venture:

  • Running a laundromat can be a way to make money, but it depends on many different factors.
  • Laundry businesses typically have low labor costs (they are fairly passive businesses with a lot amount of workers needed) and can be recession-proof.
  • Owning a laundromat does have cons and challenges, such as the fact that commercial laundry machines can be quite expensive if they need to be repaired or replaced.
  • There are many laundromats for sale and you can start your search online.
  • Running a successful laundromat business in today’s world will likely mean running a higher-quality business and selling amenities for additional fees.

In all, the profitability of owning a laundromat may make the challenges worth tackling. The average laundromat is changing and improving, and there can be room to make money with this small business.

So, what do you think? Are laundromats profitable? Are you interested in owning one?

*Statistics from Coin Laundry Association

Source: makingsenseofcents.com