How to Start a Staffing Agency in 5 Steps (and Who Can Help)

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How to Start a Staffing Agency in 5 Steps (and Who Can Help)

By starting a staffing agency and putting people to work, you’re not only changing people’s lives by giving them the opportunity but also helping the local economy by assisting businesses to stay staffed so they can continue to operate. There is no question that there’s a need for more staffing agencies. The American Staffing Association (ASA) reports that staffing companies put 16 million temporary and contract employees to work every year. The need isn’t going anywhere, as ASA says the growth of the staffing industry is outpacing overall economic and employment growth.

Learn how to start a staffing agency and where you can turn for help during the process.

Step 1: Laying the Foundation

The first step in starting a staffing agency is to conduct thorough research and develop a comprehensive business plan. Determine your target market, identify the industries you wish to focus on and assess the demand for staffing services in those sectors. When looking into what industries to focus on, consider your experience. For example, if you’ve been in the technology sector, capitalize on your connections and expertise by recruiting and working with technology professionals.

Define your agency’s mission, values, and unique selling points. Research your potential competition. Understand whom they’ve made strong partnerships with already. Then see how you can make your staffing agency stand out in the market against them.

Additionally, consider the legal requirements and regulations of operating a staffing agency in your region. Obtain any necessary licenses or permits to ensure compliance with the law. You might need special licensing if you’re going into the healthcare sector.

As mentioned above, make a thorough business plan. It’s your guide to how to start a staffing agency and grow it. Create milestones you want to meet and decide a feasible timeline to meet them. Business plans will also help you receive funding.

Step 2: Determine Funding

Part of your business plan will include financial planning. This will help determine how much money you’ll need to open your staffing agency and run day-to-day operations. The U.S. Chamber of Commerce recommends that business owners have three to six months of cash saved that could cover any operating expenses. Operation expenses include employees, office rent, technology, insurance, and marketing and advertising funds. Payroll funding is also one of the primary barriers to entry for new staffing companies with most relying on payroll factoring or other loans with high interest rates. Usually, new owners will have to pay incredibly high factoring rates initially. This is until the store grows large enough to obtain true payroll funding, typically at $1 million in revenue.

When starting a staffing agency, it’s essential to remember that clients typically pay you AFTER the work is done, meaning you have to outsource funds.

So now that you have an idea of how much money you need when considering how to start a temp agency, it’s time to decide how you’ll find that funding. The U.S. Small Business Administration gives three options: self-funding, investors, or loans. Self-funding looks like tapping into your savings or retirement fund, while investors can use a form of venture capital investments to help you. This means investors use their capital to fund you in return for equity. Lastly, a small business loan allows you to keep complete ownership of your company.

Step 3: Build a Strong Network

Establishing and nurturing a robust network is crucial to succeeding in the staffing industry. Contact local businesses, attend industry events, and join professional associations to connect with potential clients and candidates. Networking platforms and social media are also effective tools for expanding your reach. Cultivate relationships with industry influencers, hiring managers, and HR professionals to gain valuable insights and referrals.

Step 4: Attracting Candidates

When looking at how to start a staffing agency, you must establish efficient recruitment and selection processes to match candidates with suitable opportunities. Develop a compelling employer brand that resonates with job seekers, highlighting the benefits of working with your agency. Utilize various channels such as online job boards, social media advertising, and partnerships with educational institutions. Finally, implement a rigorous screening process to ensure the qualifications and compatibility of potential candidates with your clients’ needs.

Step 5: Building Client Relationships

Developing strong partnerships with clients is crucial to the success of your staffing agency. First, identify companies in your target industries that regularly require temporary or permanent staff. Next, approach them with your services, emphasizing the benefits of partnering with your agency. Then, tailor your staffing solutions to meet their specific needs, providing reliable, prompt, and professional service.

Then cultivate long-term relationships by consistently delivering exceptional candidates and providing excellent customer service. Monitor their satisfaction by performing surveys with them or asking for feedback.

Feeling Overwhelmed?

Starting a temp agency can be daunting, and you may sometimes feel overwhelmed. Remember that you don’t have to navigate this journey alone. Seek support from industry experts, business mentors, or entrepreneurial networks. Join forums and online communities where you can connect with experienced staffing agency owners who can offer guidance and advice. You can attend relevant workshops, seminars, or webinars to enhance your knowledge and skills. By tapping into available resources, you can gain valuable insights and alleviate the stress of venturing into a new business.

If you’re overwhelmed or feel you can’t hire enough staff, outsource things like marketing, invoicing, or accounting. Doing so allows you to focus on nurturing those clients and talent relationships.

Partner with a Franchise: AtWork

If you desire a smoother and more streamlined path to success, partnering with one of the country’s largest contingent and permanent workforce solutions providers as an AtWork franchisee is a game-changer. AtWork offers comprehensive support and proven systems refined through years of experience. As an AtWork franchisee, you gain access to a well-established brand, extensive training programs, ongoing operational support, marketing tools, and a vast network of industry connections. For example, AtWork corporate will handle all your backroom accounting, including staffing payroll, client invoicing and payroll funding. This alleviates a lot of the pressure that comes along with business ownership for AtWork franchisees and is often one of the primary barriers for most independent startups. AtWork can provide you with the guidance, resources, and credibility necessary to thrive in the competitive staffing industry.

Get started today and learn how to start a staffing agency with our help.

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