Do you want to start a staffing agency and want to know the cost breakdown? If YES, here are 13 factors that affect the cost of opening a recruitment agency. The consulting industry in the United States of America, United Kingdom, Canada and Australia is indeed a big and thriving industry and staffing agency is a subset of the industry.

Those who run staffing agencies are classified as Human Resource consultants or recruitment consultants. If you are looking for a business that requires less stress and perhaps minimal start–up capital, you can consider starting a staffing consulting business.

The cost of launching and running a staffing consulting firm when compared to the turnover you get can be poles apart (this is applicable when you have been able to establish your feet in the industry). The cost of running the recruitment process from start to finish could be restricted to the cost of making phone calls, transportation and internet subscriptions.

With that, it is easier to place a projection on the profits you are likely going to make if you are able to successfully seal a staffing deal. One good thing about starting a staffing agency business is that you have the options of starting it on a small scale from your home or from a virtual or shared office space with minimal overhead and running cost.

Other factors that may be slightly different in terms of costing when it comes to starting a standard staffing agency business in any of the countries listed above are cost of labor, cost of transportation and logistics, local tax, insurance policies, business incorporation fee, rent/leasing amongst other factors.

Estimated Cost Breakdown to Start a Staffing Agency

These are the key expenses you are expected to make when starting a medium scale but standard staffing business in the United States of America;

  1. The total fee for registering the business in the United States of America – $750.
  2. Legal expenses for obtaining licenses and permits as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $8,300.
  3. Marketing promotion expenses for the grand opening of the staffing agency in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  4. The cost for hiring business consultant (including writing business plan) – $2,500.
  5. The cost for insurance (general insurance, health insurance, liability insurance, workers’ compensation, overhead expense disability insurance, and business owner’s policy group insurance) coverage at a total premium – ,400.
  6. The cost for leasing an office facility in a centralized business district – $70,000.
  7. The cost for remodeling the facility – $10,000.
  8. Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits ($6,500).
  9. The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $30,000.
  10. The cost for start-up inventory (writing materials, files/folders, stick–on papers, notice board, office pins and printing ink et al) – $5,000.
  11. The cost for store equipment (cash register, security, ventilation, signage) – $8,750.
  12. The cost for the purchase of furniture and gadgets (Fax machines, photocopy machine, telephone, printing machines, filling cabin, computers, tables and chairs et al) – $14,000.
  13. The cost of purchase and installation of CCTVs: $3,500.
  14. The cost for building and hosting a website: $600.
  15. The cost for opening party: $5,000.
  16. Miscellaneous: $5,000.

You will need an estimate of two hundred and fifty thousand dollars ($250,000) to successfully set up a medium scale but standard staffing agency in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with at least three staff members and more.

Starting a small scale but standard staffing agency business (from home, shared office space or virtual office space and with less than 3 employees in the United States of America will cost about five thousand dollars to fifteen thousand dollars ($5,000 to $15,000).

When it comes to starting a standard and large scale staffing agency with several offices and training centers in key cities in the United States of America, a staffing agency with the intention of selling franchise, then you should look towards budgeting well over one million, five hundred thousand dollars ($1.5 million). Having said that, here are some of the factors that will influence the cost of opening a staffing agency in the United States of America;

13 Factors That Determine How Much It Cost to Open a Staffing Agency

1. The Type of Staffing Agency

A major factor that will determine the overall cost of opening a staffing agency in the United States of America is the type of staffing agency the owner of the business wants to start. There are different types of staffing agencies such as Contract, Contract-to-hire, Temporary, Part-time, Full-time, GAP Staffing (Graphic Arts Professional) – executive staffing agency, maid and cleaners staffing agency, causal worker staffing agency and nursery recruiting, amongst others.

You will quite agree that the cost put into opening an executive staffing agency will be far different from the cost of opening a maid and cleaners agency. In the United States, some states require job-search-consulting firms to be licensed as employment agencies. The fact that executive staffing agencies also provide training means that the cost of opening such business will be more.

2. The Choice of Location

Another major factor that will determine the cost of opening a staffing agency in the United States of America is the location. In business, location is key part of what determine the success of the business. There are business consultants cum realtors who are specialized in helping people choose an ideal location for their business; a location that will guarantee them to profitability and to breakeven within the shortest time frame.

So, you will now agree that location can influence the cost of starting a staffing agency business. For example, renting or leasing a staffing agency office facility in a location that is off the city center or off employment hub will be less expensive when compared to renting or leasing an office facility in a business district.

3. The Required Licenses and Permits

In the United States of America, you cannot open staffing agency without first applying for the mandatory license and permits. Of course, you would need building license, zonal permits, and signage permits amongst others. As expected, these license ad permits cost money and it will influence the overall cost of opening the business in the United States.

Please note that there may be several inspections you must pass before you can be issued your licenses and permits – this will also cost you money. In order to get the overall cost of licensing and permits associated with opening a new staffing agency in the United States, we will advise that you reach out to your city government. You also need to consider state and federal requirements, so do your homework long before you set a date for the grand opening.

4. The Type of Facility

The type of facility you want to run your staffing agency business from is also a major factor that will determine the overall cost of opening the business. As regards the facility, you have the options of renting, leasing or designing and constructing your own office facility from the scratch. With renting and leasing, you might just have to spend extra to modify the facility to fit into what you have in mind.

Let us assume that you want to construct your office facility from the scratch. It means that you will buy the land or a property, construct and equip the office facility to fit into the ideal picture of a staffing agency that you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility. This indeed will greatly influence the overall cost of opening your staffing agency.

5. Additional Service Offerings

Another key factor that will determine the cost of opening and operating a staffing agency in the United States of America is the additional service offerings of the agency. There are different types of staffing agencies and these staffing agencies are designed to offer different services.

For example, the services offered by Contract, Contract-to-hire, Temporary, Part-time, Full-time, GAP Staffing (Graphic Arts Professional) are all different. Full- time cum executive staffing agencies go beyond just hiring staff members for companies, but may also go ahead to training new employees. With that in mind, you will agree that they are expected spend more to set up their own agency.

6. The Number of Offices they Want to Start With

Another very important factor that determines the cost of opening a staffing agency in the United States of America is the number of offices they intend starting with.

No doubt, there are new businesses that start big with the aim of announcing their presence with a bang hence they may want to open two or more offices in different locations at the same time or within a short interval. Aside from the cost of renting or leasing office facilities in such situation, it will also cost you more to furnish and equip the offices.

7. The Cost of Hiring and Paying a Business Consultant and Attorney

As expected, if you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney. A business consultant will help with drafting a workable business plan document for the staffing agency, a marketing plan and strategy, comprehensive SWOT analysis, etc for the business.

An attorney on the other hand, will help you with registering the business, drafting contract documents and offering you all the legal expertise that will help you start the business on the right foundation. You will agree that these services will cost you money and it will indeed influence the overall cost of opening a staffing agency in the United States of America.

8. The Cost for Branding, Promotion and Marketing of the Staffing Agency

The cost for branding, promoting and marketing the staffing agency business is yet another key factor that will determine the overall cost of opening a staffing agency in the United States of America. Trust me, if you need massive results when it comes to winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion and marketing of your new staffing agency.

It is not cheap to come by an expert in branding, promotion and marketing that will help you compete with brands that are already determining the market direction in the industry in your city. So, if you add the cost of paying a branding and marketing expert, it will sure increase the cost of opening your staffing agency.

9. The Cost for Furnishing and Equipping the Staffing Agency Office and Training Facilities

Another factor that will determine the cost of opening a staffing agency is the cost of furnishing and equipping the office. You will quite agree that aside from the basic facilities that are expected to be found in an office, an investor may decide to spend more than expected to furnish office to look unique.

Also, before you can open a staffing agency, you should budget and buy training chairs and tables, projectors, flat screen TVs, sound system, DVD players, Satellite dish and decoder, office furniture (table, stools and sofas), telephones, filing cabinets), office equipment (cash register, security and fire alarm and protection gadgets, CCTV, ventilation, signage), fire and fancy lightening amongst others. All these will cost money and it will influence the overall cost of opening your agency.

10. The Cost for Insurance

The cost for paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a staffing agency in the United States of America. Interestingly, in the United States, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.

Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your own staffing agency business.

11. The Cost for Registering the Business

The cost for registering the staffing agency business is yet another cost that will influence the overall cost of opening a staffing agency in the United States of America. Although, the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a staffing agency in the United States of America.

12. Cost of Recruiting and Training Your Staff

The fact that you are opening your staffing agency as a new business means that you are expected to recruit and train your staff to conform to the kind of agency you want to operate. The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire trainers that will help you train and bring your new hires up to speed.

13. The Cost for Grand Opening of the Staffing Agency

No staffing agency opens its door for business without first organizing an opening party to officially launch the business. This means that the cost of grand opening is part of the factors that will determine the overall cost of opening a staffing agency business in the United States of America.

You can choose to do a soft opening if you operate on a low budget or you can choose to go for grand opening party. The bottom line is that it is a cost that must be part of your budget and this cost will influence the overall cost of opening the staffing agency business.

Can a Staffing Agency be Bootstrapped on a Lean Budget Right from Home?

Staffing agency service business can indeed be bootstrapped on a lean budget right from home. This is possible because of the nature of the services offered by a staffing agency. In some cases, a staffing agency might not necessarily meet physically with an applicant and employer of labor before sealing a recruitment deal. The deal can be concluded via phone calls, emails and fax et al.

These are activities that can be carried out even in the bedroom. All you need to do to bootstrap your staffing agency on a lean budget from your home is to ensure that you create a small office space within your apartment and also make provision for business meetings venue outside your house. It could be a shared office space or a virtual office space.

How Much Does It Cost to Buy a Staffing Agency Franchise?

In the United States of America, the Average Cost of Purchasing a Staffing Agency Franchise is $35,000. Examples of 3 Well – Known Staffing Agency Franchising Companies in the United States of America are;

  1. PrideStaff Franchises
  2. AtWork Franchise
  3. Link Staffing Services Franchise

In Conclusion,

Please note that there are other factors not listed above that will sure influence the overall cost of opening your staffing agency business which is why we advise that you work with a result driven business consultant in your city to give you the needed guide and info as it relates to the unique factors in your location that will influence the overall cost of opening your staffing agency business.

Ajaero Tony Martins