How to Start a Temp Staffing Agency
Starting a staffing agency may seem daunting, but staying organized and focused is key. Follow these guidelines and you’ll be well-positioned for future success.
1. Gain some experience.
Too many people start a staffing business with little to no experience in the industry. It’s always a good idea to come in with some knowledge of the industry – not just as a temporary employee, but as an administrator as well.
2. Research all the governmental requirements.
Evaluate areas such as licensing, taxing and workers’ compensation, as requirements vary by state. And don’t skip out on your taxes or borrow from your tax money – it will catch up with you in the end.
3. Execute a realistic cash flow analysis and projection.
In the first year, staffing firms should do this on a monthly basis so they can plan for cash flow needs. There are also many costs firms don’t take into account, such as workers’ compensation insurance, rent and phone bills. Determine your income and expenses and then how much cash you’ll need to operate on a day-to-day basis.
4. Talk to people in the industry.
There’s always free advice out there. Pick people’s brains who have started a firm before. Talk to owners who are not in your niche or geographic area to avoid any competition.
5. Develop a niche.
While it may sound like a good idea to be a “jack of all trades,” it is actually more beneficial to operate primarily within a single niche. This will allow you to stay up-to-date on current needs and trends in whatever industry you choose and also narrow down your competition. Take a look at where your strengths lie, what industries are prevalent and what is underserved in your geographic area.
6. Hit the streets.
If you’re just starting out, you’re going to need both clients and employees. Use the contacts you have to bring people on board. If you don’t have any, knock on doors. Ask where you can post job listings in the area and talk to businesses about their temporary staffing needs.