A tipster (send in your tips here) brought the following page to my attention from the Preferred Financial Services site which says:
The pitch seems to be to switch and become their affiliate and outsource all the back office stuff to them so you can “focus on front end operations.” But the charts show your overhead expenses remain the same in either model. What are companies going to do, convert back office staff to front office sales people and keep them on the books? In addition the models presented don’t represent that current companies will have some continued funds rolling forward each month from fees. It also seems to show that by becoming an affiliate that you’d start to immediately begin earning fees and income but how many people are going to settle enough debts in the first eight months to generate $75,000 a month? It looks like the pitch is the PFS solution has some component of up-front or advanced fees through a potential attorney model.
Does anyone have any experience with PFS on this approach?
Here is what they say:
Benefits of Working with PFS
With the coming changes in the Debt Settlement industry, PFS has your solution to maximizing your profitability during the transitional phase. PFS is not only a short term answer but also can improve your business over the long run.
To remain operational over the next 6-12 months, debt settlement companies need to adjust to the new FTC regulations. This means there will be a restriction on charging advanced fees and limiting the total fee you can charge for your services. Operationally this means you will see a dramatic drop in revenue in the short run as well as potentially lower revenues in the future. To make sure your business survives through this transition and well into the future, PFS has created a program that allows you to focus on front end operations rather than dividing your company’s resources between your front and back end departments.
PFS has projected a typical Debt Settlement company’s revenues and expenses over a 12 month period to show you just how different your business model will be after the FTC adjustments.
As you can see, the realities of the new business environment will result in the following:
- You will not break even until month 8 at the earliest if everything goes according to plan.
- You will lose over $80,000 over the first 12 months of operating under the new rules.
- Your expenses will not change significantly during this time period, even though your revenues are dropping dramatically.
- More importantly the money you spend keeping up with the business will never come back to you…
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