Do you want to start a temp staffing agency from home? If YES, here is a complete guide to starting a temp agency business with NO money and no experience.
Okay, so we have provided you an in-depth sample temp agency business plan template. We also took it further by analyzing and drafting a sample temp agency marketing plan backed up by actionable guerrilla marketing ideas for temp agencies. In this article, we will be considering all the requirements for starting a temp agency business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Temp Agency Business?
Having multiple stream of income is one of the surest ways of becoming rich. This is one of the reasons why starting a business will never go out of fashion. If you have been tinkering with stating a business that would fetch you money in real time, then you can opt for the temp agency business.
The consulting industry in the United States of America is indeed a big and thriving industry and the temp staffing agency is a subset of the industry. Those who run staffing agencies are classified as Human Resource consultants or recruitment consultants.
What is a Temp Agency and How Do They Make Money?
A temp agency is responsible for recruiting temporary workers for businesses and organizations. Organizations in need of short-term workers contact temporary work agencies to send temporary workers, or temps, to work in their companies. Some temp staffing agencies offer services beyond just recruiting employees for their clients but also help in training and preparing the employees to fit into the role that they are being recruited for. Usually such temp staffing agencies charge more than those who just recruit employees for their clients.
When it comes to getting paid, some temp staffing agencies charge their clients applicant administrative fees so as to enable them process their application, match them with employers and successfully help them secure jobs. Processing the application of an applicant includes helping them restructure their CVs and cover letters so as to fit into the expectation of the recruiter (the organization they want to work for).
In essence, it is commonplace for a temp staffing agency to earn their money by charging their clients (employers of labor) for the amount of work the employee undertakes. In most cases, the staffing temp agency receives the same amount as the employee. Temp staffing agencies make more money when they help organizations recruit highly skilled staff (consultants) to carry out high – profiled jobs.
If you are headed for a temp staffing agency, then it will do you a whole lot of good to start with recruiting temporary employees for organizations who are looking for a labor force to help them execute a contract/project which usually is time bound. With that, you are sure to make your cut and move on because there would be loads of such temporary jobs in the United States especially on construction sites.
Starting a Temp Staffing Agency Business from Home – A Complete Guide
- Industry Overview
The Office Staffing and Temp Agencies Industry that temp agencies are a part of are responsible for supplying businesses and organizations with workers for limited periods of time to complement existing staff. Even though temp workers remain employees of the temp agency, temp agencies do not provide direct supervision of their employees at clients’ work sites.
It is on record that the staffing, recruiting and workforce solutions industry makes a whooping contribution to the economy of the United States of America, and they provide jobs and career opportunities for about 14 million employees annually.
Statistics has it that in the United States of America alone, there are about 67,565 registered and licensed temp staffing agencies responsible for employing about 3,303,021 and the industry rakes in a whooping sum of $149 billion annually. The industry was projected to grow at 4.1 percent annual growth between 2011 and 2016. It is important to state that there is no establishment in this industry that has a lion market share.
A recent report published by IBISWorld shows that the regional spread of industry establishments and employment closely resemble population distribution across the country. The distribution of revenue generally correlates with the number of establishments within a region.
But some regions such as the Mid-Atlantic and West have higher revenue per establishment as a result of the relatively high-value jobs in those regions. The report further stated that Southeast region is home to 25.2 percent of industry establishments, the largest portion attributable to any region. .
The office staffing and temp agency industry will continue to blossom because more and more organizations are beginning to realize that somehow, they would need the services of employment consulting firms to help them take away the stress of recruiting temp workforce for their business.
From available statistics, it is safer to say that the office staffing and temp agency industry is growing steadily despite the competitive nature of the industry. One thing is certain, if you are well positioned, you have the required business skills, networks and you have a robust CV bank, you are likely not going to struggle to compete favorably in the office staffing and temp agency industry.
An additional reason why people prefer to start an office staffing and temp agency business is that consultants have the monopoly to charge fees as it suits them especially if they have been able to pay their dues in the industry over the years.
Starting a Temp Agency Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who hire the services of temp staffing agencies cut across all small businesses and corporate organizations both big and small that have the capacity to pay for their services hence the demographic composition for a temp staffing agency business is all encompassing.
The reality is that when it comes to temp staffing agency services, there is certainly a wide range of available customers. In essence, your target market can’t be restricted to just specific corporate organizations within your location, but to all the corporate organizations and businesses around the city where you have your business presence and who can afford your services.
Consequently, if you are thinking of opening your own temp staffing agency then you should make your target demographics all encompassing. It should include households, corporate organizations, medium scale and small scale organizations in the city where your temp staffing agency is located.
List of Niche ideas Within the Temp Agency Business That You Can Specialize in
Even though most temp staffing agencies have a habit of employing a wide range of temp staff for corporate organizations and businesses, but that those not mean that there are no niche areas in the industry. As a matter of fact, some corporate organizations will only deal with a temp staffing agency that specializes in recruiting for specific industries, hence the need for temp staffing agencies to carve a niche for themselves.
If you do not know the area to carve a niche in, here are some areas that you can choose from;
- Office, clerical and administrative staffing
- Industrial staffing
- Healthcare staffing
- Information technology staffing
- Engineering and scientific staffing
- Professional and managerial staffing
The Level of Competition in the Temp Staffing Agency Business
No matter the level of competition in an industry, if you brand and promote your services or business fittingly, you will always make headway in the industry. Be sure that your workforce can carry out thorough recruitment of temp staff, you can deliver excellent customer care services, you know how to attract reliable and competent temp staff, and also how to reach out to your target market.
There are several temp staffing agencies and other related staffing services businesses scattered all around the United States. So, if you choose to start a temp staffing agency in the United States of America, you will unquestionably meet harder competition amongst temp staffing agencies. Besides, there are larger temp staffing agencies that determine the trends in the industry and you should be ready to compete with them for customers.
List of Well – Known Brands in the Temp Agency Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.
Here is a list of some of the leading temp staffing agencies in the United States of America and in the globe;
- Adecco Staffing
- American Recruiting and Consulting Group
- Spectrum Staffing Services
- Express Employment Professionals
- Spherion Employment Agency
- S. Staffing Agency, LLC
- United Staffing Associates – Las Vegas, NV
- Labor Systems Employment Agency
- International Staffing Consult
- American Personnel & Temps
- A Robert Half International Company
- Regional Personnel Services Inc
- Labor Finders Independence
- Working Solutions Temp Agency
- Michael Page Employment Agency
- Staffing Alternatives Employment Agency
- OnStaff USA Temp Agency
- Savant Sourcing Temp Agency
- Atlas Staffing Inc – Elk River
- PEAK Technical Staffing USA
- US Medical Staffing Temp Agency
If you are tinkering with successfully launching a business and maximizing profits, then you have to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Temp staffing agency business is not a green business; as a matter of fact, you will come across several temp staffing agencies and other office staffing and recruitment agencies when you drive through town, search through directories and browse through the internet.
As such, you should carry out thorough market survey and costing of what is required to rent a space where you want to open your temp staffing agency business and the amount required to purchase office gadgets and furniture, and also the cost to successfully run the business.
If you are considering starting a temp staffing agency, then your concern should not be limited to the cost of renting an office space and purchasing office gadgets and furniture, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
Starting Your Temp Staffing Agency Business from Scratch vs Buying a Franchise
If you are looking at starting a temp staffing agency business, it is imperative to start from the very scratch because even if you get a franchise of a temp staffing agency to buy, it might be way off your budget and the brand might not be marketable in your location.
Besides, starting a temp staffing agency from the scratch is less stressful when compared to other small scale businesses. With a temp staffing agency business, you should just try as much as possible to get the right employees, build business relationship with key stakeholders and then leverage on every marketing tool within your disposal to market your services.
Have it at the back of your mind that most big and successful temp staffing agencies around started from ground zero and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
Possible Threats and Challenges You Will Face When Starting a Temp Staffing Agency Services
If you decide to start your own temp staffing agency services business today, one of the major challenges you are likely going to be saddled with is the presence of well – established temp staffing agencies and other related recruitment and staffing agencies that also supply temp staff. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face are economic downturn and unfavorable government policies. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
Starting a Temp Staffing Agency Business – Legal Matters
- Best legal entity to use for this type of business
Generally, you have the option of either choosing a general partnership, limited liability Company which is commonly called an LLC, or even a sole proprietorship for a business such as temp staffing agency. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale temp staffing agency especially if you are just starting out with a moderate startup capital in a small neighborhood and with just one outlet. But people prefer limited liability Company for certain reasons.
As a matter of fact, if your intention is to have offices and corporate clients all across key cities in the United States of America and other countries of the world via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your temp staffing agency services business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your temp staffing agency services business with the ability to sell franchise and have offices and corporate clients all across the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Catchy Business Name ideas Suitable for a Temp Staffing Agency
When it comes to choosing a name for your business, you should be willing to think outside the box because whatever name you opt for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are tinkering with starting your own temp staffing agency services business, here are some catchy names that you can choose from;
- Excel Professionals® Temp Staffing Agency Services, LLC
- White Collar® Temp Staffing Agency Services, LLC
- Blue Ribbon© Temp Staffing Agency Services, Inc.
- Kings Court® Temp Staffing Agency, Inc.
- Monica Granville™ Temp Staffing Agency Services, Inc.
- Theresa Brown® Temp Staffing Agency Services, Inc.
- Clear Whyte© Temp Staffing Agency Services, Inc.
- Click ‘A’ Clock® Temp Staffing Agency Services, LLC
- Fidel Dwayne© Temp Staffing Agency Services, Inc.
- Safe Hands© Employment Services, Inc.
In the United States and in most countries of the world, you couldn’t possibly operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Hence it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your temp staffing agency services business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own temp staffing agency services business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
If you are considering starting your own temp staffing agency services business, you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.
Is Professional Certification Needed to Run a Temp Staffing Agency?
Aside from the results you produce as it relates to recruiting/supplying temp staff to your customers, professional certification is one of the main reasons why most temp staffing agencies stand out. If you want to make an impact in the office staffing and temp staffing services industry, you should work towards obtaining all the needed certifications in your area of specialization.
Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in this competitive market. These are some of the certifications you can work towards attaining if you want to run your own temp staffing agency;
- Certified Recruiting Specialist (CRS)
- Recruitment Consultant Certification (RCC)
- Physician Recruiting Consultant (PRC)
- Certified Personnel Consultant (CPC)
Please note that you can successfully run a temp staffing agency in the United States and in most countries of the world without inevitably acquiring professional certifications and business license as long as you have adequate experience cum background in the office staffing and temp staffing services industry.
List of Legal Documents You Need to Run a Temp Staffing Agency
The essence of having the necessary documentation in place before inducting a business in the United States of America cannot be exaggerated. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own temp staffing agency services business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID / Tax Identification Number
- Health inspection Certificate
- Business Plan
- Contract Document
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
Financing Your Temp Staffing Agency
This is one of the most vital areas of any business. Opening a temp staffing agency services business can be cost effective if you choose to start on a small scale by running the business from your home or sharing an office space. But securing a standard office space in a business district and purchasing office gadgets and furniture are part of what will consume a large chunk of your startup capital.
If you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale temp staffing agency services business.
When it comes to financing a business, one of the major factors that you should consider is to write a good business plan. If you have got a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your temping agency services business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Selling shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
Choosing a Suitable Location for a Temp Staffing Agency
When it comes to picking a location for your temp staffing agency services business, you can start the business in any location of your choice especially if you are offering basic temp staffing supply services, which is services that do not require your clients to come to you for services except for meetings.
The location you choose to operate your temp staffing agency is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of corporate organizations and businesses with the obligatory purchasing power.
Before cherry-picking a location for your temp staffing agency services business, ensure that you first undertake a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
These are some of the key factors that you should consider before choosing a location for your temp staffing agency services business;
- The demography of the location
- The demand for temp staff in the location
- The purchasing power of businesses in the location
- Accessibility of the location
- The number of corporate organizations, temp staffing agencies and other recruitment and staffing agencies that also recruit temp staff in the location
- The local laws and regulations in the community
- Traffic, parking and security et al
Starting a Temp Staffing Agency Business – Technical and Manpower Details
On the average, there are no special technologies or equipment to run an average temp staffing agency except for HR and recruiting software apps, computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
Regarding leasing or outright purchase of an office facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard temp staffing agency services business with plans to have corporate clients all across major cities in the United States of America, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Recruitment Specialist, Sales and Marketing Officer, Accounting Clerk, and customer services executive.
These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members excluding temp staff to run a small – scale but standard temp staffing agency services.
The Services Process Involved in Temp Staffing Agency Services Business
The truth is that the way temp staffing agencies work varies from one agency to another, but ideally, a temp staffing agency is responsible for handling both hiring and terminations, as well as employment taxes such as payroll, medical insurance and Social Security et al.
It is the practice for temp staffing agencies to have a robust CV bank so that whenever an organization demands temp employees from them; they are able to able to quickly produce qualified candidates without putting up any vacancy. It is the practice for temp staffing agencies to prepare applicants to take on some job roles before the opening even surfaces; it puts them ahead of their competitors in the industry.
When an organization requests for temp staffs from a temp staffing agency, they are expected to sign a contract document that clearly defines the scope of consulting role they want them to play. It could be just recruiting, it could be recruiting and training and it could be handling the human resources role as it relates to staffing for the organization.
It is important to state that a temp staffing agency may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
Starting a Temp Staffing Agency Business – The Marketing Plan
- Marketing ideas and Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a temp staffing agency services business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the office staffing and temp staffing services industry.
Your marketing strategy should center on reliability, swiftness, safety, pricing, thoroughness, and above all excellent customer service. You should ensure that whenever your customers hire your services (temp staff), they will get excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort should be directed at internet users.
These are some of the marketing ideas and strategies that you can adopt for your temp staffing agency services business;
- Introduce your temp staffing agency service by sending introductory letters alongside your brochure to corporate organizations, small scale businesses, medium scale businesses and other key stakeholders throughout the city where your temp staffing agency services is located
- Advertise on blogs, forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your services
- Engage in road show in targeted business communities from time to time to promote your temp staffing agency services business
- Join local temp staffing agency services business associations for industry trends and tips
- Join local chambers of commerce and industry with the aim of marketing your services
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
Factors That will Help You Get the Right Product Pricing
One key factor that will help you offer your temp staffing agency services at rock bottom prices is to source for cheap but competent labor. The truth is with cheap labor, it is easier for you to offer your services at highly competitive prices.
Another strategy that will help you offer your temp staffing agency services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your services.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
Strategies to Boost Your Temp Staffing Agency Brand Awareness and Create Your Corporate Identity
If your intention of starting a temp staffing agency business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening offices all across key cities in the United States and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your temp staffing agency services business;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your temp staffing business
- Install your billboards on strategic locations all around your city or state
- Engage in roadshows from time to time in targeted business districts to create awareness of your temp staffing agency services business
- Distribute your fliers and handbills in target areas
- Contact corporate organizations, small scale businesses, medium scale businesses and other key stakeholders throughout the city where your temp staffing agency service is located informing them about your temp staffing agency and the services you offer
- List your temp staffing agency in local directories
- Advertise your temp staffing agency in your official website and employ strategies that will help you pull traffic to the site
- Position our Flexi Banners at strategic positions in the location where your temp staffing agency is located
- Ensure that all your staff members wear your branded shirts and all your carts, vehicles, trucks and vans are well branded with your company logo et al.
Creating a Suppliers/Distribution Network for your Temp Staffing Agency
In order to successfully run a temp staffing agency services business, you must establish good business relationship with corporate organizations and other recruitment and staffing agencies within the city where your temp staffing agency is located. You would need steady request of temp staff from corporate organizations, small scale businesses, medium scale businesses and other key stakeholders in order to remain in business.
You are also expected to create business networks with managers of freelance recruiting agencies. They are in a better position to give you corporate temp staffing recruiting contract. Depending on your agreement with them, you might be compelled to pay a certain fee or commission.