How to Start an Abstractors Business

Abstractors gather and review information from one or many sources. They digest the information, chose the most relevant and important information, and present it in one document. The document is called an abstract. Abstractors work in real estate, especially as housing title examiners, as well as in legal, medical and scientific fields and in a wide range of industries. Individual abstractors turn over at a high rate, which offers opportunities for properly planned start-up companies to become successful.

• 1

  Research what abstractor services you intend to sell. Having knowledge in the area you serve is crucial to reducing the time required to start. If you have experience in science and medicine, deciding to compete for business as a title examination company means you probably have to spend time learning the real estate laws of your state. Experience in the area helps you plan and market. Five years working as an information technology consultant prepares you to make appropriate choices for your company because you already know some jargon and the outlook of people in this industry.

• 2

  Prepare a business plan. Your plan is a significant document for securing investors and loans because it describes the ways in which you intend to operate your business. It describes what you expect to sell, how you will attract customers, who your competitors are, and what employees or contractor writers and equipment you need. Some abstractor firms specialize in information about their geographic area or region. Others seek a much narrower focus, but a larger group of potential customers. They may serve all of North America, but only companies providing transportation. Those firms that are international in scope require employees or contract help with language skills that match the countries they serve.

• 3

  Collect information about the competition to ensure your business meets an unmet need or is competitive with the other firms providing abstracts. Companies that require constant input of new information in usable form often have employees hired for that purpose. To market to these companies, you must demonstrate that you can provide better or more thorough information and get it to them faster and at less expense. The nonprofit group SCORE has a website with useful information about preparing business and marketing plans.

• 4

  Obtain the money you need to get started and stay in business until your shop starts to earn a profit. About 50 percent of small businesses fail in the first five years, according to the U.S. Small Business Administration. One common reason is lack of sufficient funding.

  Seeking investors means being responsible to them and providing them a share of profits. You may be able to borrow money from banks. This means you will start out with debt. As part of your business plan, prepare a cash flow analysis so you can see quickly how much income you must make each period to meet your financial obligations. Don't hesitate to obtain help with this analysis, as it provides you with critical information.