Starting a Staffing Company
Temporary staffing is one of the fastest-growing industries in the market. As more companies rely on temporary staffing to fill open positions, there will be even greater opportunities to build a successful staffing agency. If you have considered starting your own business, now is the time.
Starting your own temporary staffing agency is a time-intensive process that involves more than choosing an appropriately catchy business name, but you can reap large rewards if you do the legwork. Below, we break down the process.
Know your industry.
Before you file any paperwork, make sure you understand the industry you want to serve – preferably, by working in it. Holding an advanced position in your target industry will provide you with valuable perspective about your ideal candidate: the skill set, education, and certifications that companies are seeking – and how much companies are paying for the right talent. You can use this information when you draft an employment application (more on that later).
Background in the industry can also give you a competitive marketing edge with companies who will have greater confidence in your expertise.
Understand the law and government regulations.
Do you know if you need to incorporate? (You do.) Which corporate structure will provide the most protection? The answer to that question will depend on your individual situation, but it is important to separate your personal business from that of your staffing company. Without the appropriate structure, any issues you face in your company could lead to personal financial issues as well.
Your responsibility does not end there, however. Make sure you research requirements for filing taxes, obtaining relevant licensure, and purchasing insurance so you are operating legally and can meet your obligations when they arise.
Have a financial plan.
Starting a business isn’t free. You have to pay to incorporate (including filing and insurance costs), to purchase or rent office space, to furnish your office with the necessary equipment, and to market your services to potential clients and candidates. Once you begin staffing employees, you are also responsible for their payroll – whether or not the company has paid you.
Figure out what your operating costs will be in relation to your income, and revisit the plan regularly so you are prepared for unexpected expenses. No matter how successful you are otherwise, a lack of cash on hand can sink your new business overnight.
Find your staffing niche.
Don’t try to compete for contracts with every single company that is looking for staff; instead, choose a single industry (or subset of an industry) and differentiate your agency by recruiting talented professionals to fill those open positions. You will save time and money, and you will build a reputation as a reliable source of exceptional professionals.
Write your application and build your fee structure.
This is where your industry expertise will help you stand out to potential candidates. Craft an application that focuses on the necessary skill sets. You can then quickly and accurately identify strong candidates for your staffing clients.
Also, decide how much you want to charge for your staffing services. Consider the average salary for professionals in your niche, the cost to you of staffing the employee, and a reasonable upcharge to generate profit. (Making money, after all, is likely why you started a business.)
Get your name out there!
Reach out! Let people know that you are in business and ready to hit the ground running. Find out where the best places are to post job openings, including recruiting Web sites. Cultivate your contacts and ask them for an introduction to companies looking for temporary staff. Attend staffing trade shows and association events to make new contacts and gain valuable advice.
Finally, don’t underestimate the power of social media – join relevant LinkedIn groups, follow staffing users and topics on Twitter, and engage potential clients and talent on Facebook. Pinterest is also rapidly gaining traction in the staffing industry, so consider adding the platform to your marketing arsenal.
Details of the process may vary based on your individual situation, but by following this general road map for starting your temporary staffing agency you will be in great shape to start staffing and earning profits.
Factor Finders provides funding support to temporary staffing agencies in a variety of industries. Learn more about our factoring programs for staffing companies.
Next post: Choosing Your Niche