Do you want to start a medical staffing agency? If YES, here is a complete guide to starting a medical staffing agency business with NO money and no experience.
Okay, so we have provided you an in-depth sample medical staffing agency business plan template. We also took it further by analyzing and drafting a sample medical staffing agency marketing plan backed up by actionable guerrilla marketing ideas for medical staffing agencies. In this article, we will be considering all the requirements for starting a medical staffing agency business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Why Start a Medical Staffing Agency Business?
- Starting a Medical Staffing Agency Business – Market Research and Feasibility Studies
- Starting a Medical Staffing Agency Business – Legal Matter
- Is Professional Certification Needed to Run a Medical Staffing Agency Business?
- Starting a Medical Staffing Agency Business – Technical and Manpower Details
- Starting a Medical Staffing Agency Business – The Marketing Plan
Why Start a Medical Staffing Agency Business?
High demand, positive long term growth outlook and handsome profit margins are some of the incentives fueling the growth of the medical staffing industry. The medical staffing agency fills a peculiar space in America’s healthcare delivery system. With shortfalls in skilled and experienced healthcare givers, health organizations are under immense pressure to source for talents.
Hence, the setting is ripe for another medical staffing agency to step in. This is what you want to do right?However, the task is daunting as there is a lot to be done, a mountain of paper works to file, start-up capital to source for and all these can get you overwhelmed. This is why this article was written to guide you through the process of setting up and running a profitable agency.
This article aims to provide you with detailed information of everything you need to know; from industry overview to valuable data, from insights into your possible competition to market analysis, we bring to your notice regulations and standards you need to be aware of, best business entity to set up (whether a limited partnership would be ideal or a limited liability company, or if it would make sense to go solo), practically everything you need to know including the legal aspects of running the business.
Starting a Medical Staffing Agency Business – A Complete Guide
- Industry Overview
The medical industry historically has always had high demand for personnel; this is in part due to the human need. However, with the recent technological advancement and increased life expectancy, Americans are in need of medical care more than ever and this has placed an unbearable even to breaking point pressure on medical institutions, health care organizations, home health care providers and all health care related organizations.
There are several factors which have led to this pressure on the medical organization, and the chief factor is the shortfall in supply of skilled and experienced health care workers. The cause of this shortfall may include insufficient intake of college students to study these courses, the prohibitive cost of majoring in any of the specialty fields leading students to shy away from applying to medical schools, and several other factors which is beyond the scope of this article.
However, one factor of interest is the increasing weariness of most health workers for full-time salaried positions. The increased pressure and heightened stress from over work due to staff shortage and the high caregiver/patient ratio makes it unattractive working in these health-care facilities.
With this shortfall and subsequent high demand, medical organizations, home health care givers and other related primary health care givers are willing to pay premium to attract top talents to their organizations.
Data from The Bureau of Labor Statistics shows an upward trend in jobs created within the healthcare sector in 2014 and which averaged 14.9 million by the end of the year, a 2.1% increase from the same time in 2013 and this trend is expected to continue.
To further buttress the robust demand for talents in the medical talent acquisition, Ani Turner, deputy director of the Center for Sustainable Health Spending at the Altarum Institute said “I don’t see any reason why it’s going to drop off – the year-end pace of hiring”, citing the Patient and Affordable Care Act which has created more households with health insurance and the rising employment opportunities giving people more income to budget for healthcare.
Analysts are pointing to the aging Baby Boomers as another driving factor for the high demand of care givers. It is being projected that by 2022 20% of the workforce would have retired and amongst these retirees are the health workers leaving a huge skills gap to be filled.
We have established that there is a need to be filled, a market for your service and a long term growth prospect. Now the question is how do you make a successful entry into the market, keeping in mind the unique nature of the health sector and all the regulatory obligations you are expected to comply with?
Starting a Medical Staffing Agency Business – Market Research and Feasibility Studies
- Demographics and Psychographics
One of the best things about venturing into staffing and recruitment business is the slew of data and information at your disposal. With the click of a button, you can access various reports and studies concerning industry trends, employment statistics and the general sentiment of the niche you are preparing to make an entry into.
For a medical staffing agency, defining your demographics and being specific with the market you intend serving is key to running a successful agency. While defining your market, keep in mind the two set of groups you are servicing; the health worker you are intending to provide placement for and the organization that needs these skilled workers. Suggested possible clients for your medical staffing agency include;
- Nursing Homes
- Assisted Living Centers
- Physicians’ Offices
- Social Service agencies
- Insurance companies
- And businesses with health centers
List of Niche ideas Within the Starting a Medical Staffing Agency Business – A Complete Guide That You Can Specialize in
There are many specialty areas in the medical staffing industry. As a business owner making an entry into the market, one thing you want to do is to differentiate your business from the army of similar businesses already in the market and to figure out a way to gain enough market share.
How will you do this if you are into several or all of the niches available? It is strategic for your business to brand yourself as an expert in a particular niche. Even if you go on to provide services in other niches, you would have been known for one thing and whenever the need for that arises, people would know who or where to turn to. This is the idea behind niche specialization.
We have listed all available niches in the medical staffing sector for you to get an idea of what is available and make your decision on which to major in;
- Registered Nurse staffing niche
- Travelling Registered Nurse staffing niche
- Physicians and Surgeons staffing niche
- Optometrists staffing niche
- Occupational Therapists staffing niche
- Medical Scientists staffing niche
- Audiologists staffing niche
- Physical Therapists staffing niche
- Diagnostic Medical Sonographers staffing niche
- Biomedical Engineers staffing niche
Bear in mind that choosing a niche does not guarantee success, but you must work hard to own and become the top dog of your niche. That way, whenever a need for something in your niche comes up, your business will be the first to come to mind.
The Level of Competition in the Medical Staffing Agency Industry
The health care staffing industry is an .1 billion industry in the united states, with an estimated annual growth rate of 7% per annum. This is good news and as well bad news for you. The good news is that there is a huge market to play with. The bad news is that other businesses are going to be competing with you for a chunk of this pie.
So, bracing yourself with relevant information about how stiff this competition (Approximately 22,400 staffing agencies in the U.S.) is going to be is a smart move which hopefully will help inform your positioning and marketing strategies.
To understand the competition you are going to face, take a look at these statistics. According to a survey, 45 percent of 100 respondents who are members of the American Staffing Association said recruiting was their biggest challenge. 70 percent of the respondent rated finding candidates as a challenge of 7 or higher (on a scale of 1 – 10).
What does this mean for your business?
Taking into consideration your unique niche – healthcare staffing niche, the perennial dearth of skilled and experienced workers, and the plethora of other agencies scourging for candidates and clients, you will understand the level of competition here.
In spite of this tight competition, there is a huge room to grow a successful agency. With proper positioning, effective marketing strategies and quality service delivery, you can easily gain a large market share for your business.
List of Well – Known Brands in the Medical Staffing Industry
Just as in every other industry, there are certain businesses who over time rise to the top of their market either through implementing innovate strategies, merging and acquisition or sheer hard work, and the medical staffing industry has her fair share of dominant players.
It doesn’t hurt as a new entrant to the market to identify who the top dogs are; from the U.S health care market, here are the major brands dominating the landscape;
- AMN HealthCare Services
- Thomas H. Lee
- Beecken Petty O’Keefee & Company
- Clearview Capital
- EmCare Inc.
- Accountable Healthcare Staffing
- Cross Country Healthcare
- Local Staff, LLC
- OGH, LLc
- Medical Solutions L.L.C.
- Leonard Green & Partners
- CHG Healthcare Services
- Jackson Healthcare
- Maxim Healthcare Services
The economic outlook and long term growth of the industry correlates with the GDP of the nation, hence taking a look at how the economy is performing and its forecasted future performances will provide insight into how the staffing industry – more specifically the medical staffing niche will perform.
Also, a look at key industry growth drivers and their long term trend offers a valuable insight into this industry. The economy, post-recession, has been on an upward trend and it is expected to continue at least into the near future. Hopefully, the economic policies of the new government will stimulate and encourage further expansion of the economy. As the GDP expands, so does staffing and recruiting. As GDP contracts so does staffing and recruiting. Hence a strong economic growth means more firms will be willing to expand and this means recruiting more staff.
The staffing data has historically been an indicator of economic activities and a leading employment indicator. Hence the recent upsurge for talents leading to pressures on staffing agencies especially medical staffing agencies to source for and recruit quality talent is an indicator of the growth potentials of the industry.
Other key factors driving this demand are the shortfall in supply of healthcare professionals. Take for instance the projection by the Bureau of Labor Statistics that put the number of vacancies that would emerge for registered nurses at 1.2 million between 2014 and 2022. This creates a huge demand for available talents.
An aging workforce with all the attendant diseases and chronic health issues elderly people are susceptible to is also placing the healthcare resources under serious pressure. This means that there will be more people who need medical care. An aging health care giver also presents its own challenge, as more and more medical staff join the rank of retirees with no sufficient and qualified candidates to step into their shoes.
The Affordable Care Act (ACA) otherwise known as Obamacare has created over 25 million households qualified to access health care under this policy, adding more strain to an already over-stretched healthcare service system.
These indicators all point to one thing – a positive market demand for more healthcare givers. However, the challenge for medical staffing agencies will be to figure out innovate strategies to attract quality staff for their clients.
Starting Your Own Medical Staff Agency: From Ground Up or Buying into A Franchise
There are several routes you can take while starting your own medical staffing agency. You can choose to buy into an already established franchise or start yours from the ground up. Whichever path you choose to go, here are some things to bear in mind;
- Going it all alone means you are completely in control and responsible for the running of the agency. No external help, no training or marketing aid from anyone. The odds of failure are higher here. But, just as well, there are enormous benefits.
- If you like to be in total control then this is for you. You have the liberty to set and implement the direction you want your agency to toll. You also enjoy the profit from the business 100% without paying any fees to anybody.
- If you like a little bit of structure and support then taking the franchise route would be what you need. Recruiting Franchisers usually promise to provide business training, maybe software, advertising, market penetration and a recognizable brand you can leverage on to grow your business.
- It is quite expensive to buy into a franchise; you are going to be coughing out an initial sign on fee in the region of $20,000 – $200,000 and 10% – 20% monthly gross revenue.
Possible Threats and Challenges You Will Face in the Medical Staffing Agency Business
At this point, you have made up your mind on the route to follow in pursuing your medical staffing agency. Just as with any other business venture, starting your own medical staffing agency has its own threats and challenges. Coming to grips with the challenges inherent in running your own healthcare staffing agency affords you the opportunity to plan for any eventualities that may arise in the future.
What are the factors which could threaten your business? Asking and answering this question is the first step in planning against threats to your business. Here are some events that may pose as threats for your business;
- New competitor enters your home market: This is a real threat to your market share since you will be competing with the new entrants for the market that was previously yours. And it could even get more threatening if the new business has implemented some market disruptive strategies. You have to keep an eye on your industry news to follow new developments.
- Presence of an established competition: Gaining traction in a market with a dominant brand is a bit difficult; however with ingenuity and innovation you can gain a considerable market and mind share.
- The healthcare industry is highly susceptible to change in Regulations and Policies by the government: Take for instance the far-reaching effect of the introduction of the ACA and also the uncertainty concerning the new government’s healthcare policy. These two events have dramatic consequences for healthcare providers including staffing firms. Hence this is a major challenge you are going to face while running your business.
- Economic fluctuations pose another threat: This is definitely out of your control, however you can prepare for it. During an economic crunch, businesses generally try to cut costs and these in most cases are in the form of job cuts and a pause in recruitment. This surely affects staffing businesses resulting to reduced revenue and in severe cases to closure. To mitigate the effect of economic downturn, diversifying into other complementary services is recommended.
Starting a Medical Staffing Agency Business – Legal Matter
- Best Legal Entity for Your Business
There are several factors to consider when choosing a legal entity for your new start up. You will have to decide whether to register as a partnership, a limited liability company (LLC), or as a sole proprietorship for your medical staffing agency. Registering your business with your state Department of Corporation is the first step in turning your idea of a staffing agency into a solid concrete reality.
Maybe before now you have heard of partnerships, Limited Liability Company and sole proprietorship but you wonder what the difference is between them, the benefits each has to offer, the ease of registering either of them and what they actually mean.
If any of those describes you just know that it is OK, and in this section of the article we are going to take a closer look at each and hopefully by the end of the section you would have gained sufficient knowledge to make an informed decision concerning which would be best for your business, taking in consideration your peculiar situation and the goals you have for the new company.
The Limited Liability Company (LLC)
Setting up an LLC company requires more time, paper work and other legal requirements. This is because you are setting up another legal entity that is separate from the owners and which can be sued in the court of law unlike the other two we have discussed earlier.
This model is appealing for some obvious reasons which include some tax consideration, limited liability (you are only liable to the extend you invest in the business), easy to get investors, scalable and transferability of ownership maybe when you decide to exit the market. Having looked that all these models, the question for you to answer is which one is best for you?
However, we will recommend registering a Limited Liability company though it costs a little more than the others and involves greater paper works to set up. The advantages far exceed the initial investment.
Catchy Business Name ideas for Your Medical Staffing Agency
Names are not just names; they are means of identification and a tool to distinguish businesses from each other. Choosing an effective business name for your healthcare agency should be your motive when deciding on a trading name for your company.
How can you know when you have chosen an effective name for your company? An effective business name has the following traits:
- Easy to Recall
- Easily spelt
- Evokes an image just by merely reading or hearing the business name
- Use some relevant keywords such as Care
- Evoke positive emotional response
Here are some names you can use;
- KaloBios staffing Services
- CTTAPE Services
- MedicalDirectClub Services
- Medical Staffing Options US
- Medical Staffing Solutions USA
- Meteor Home Care
- New Wave Surgical Agency
Buying an Insurance Policy for Your Medical Staffing Agency
In setting up a healthcare staffing outfit, there are certain requirements demanded by law you must meet in other to operate, like buying insurance policies to cover the business. There are several policies out there to buy but which ones are mandatory for your business?
How do you identify the ones that meet your business needs and also doesn’t cost an arm and leg to service? This is where you need a professional. Let us take a look at the recommended policies to purchase for your healthcare staffing agency;
- Business Insurance
- General Liability Insurance
- Medical Professional Liability Insurance
- Fidelity Bonds
- Health and Life Insurance
- Workers Compensation Insurance
- Error and Omission Insurance
Intellectual Property Protection/Trademark
Some of the business properties which can be protected under the IP/Trademark protection law include; your business trademarks, logos, service marks, jingles and media production concepts, unregistered marks, and any proprietary applications you may have.
To begin the process of registering your trademark, first file an application with the USPTO who reviews your application through a group of attorneys and when/if your application passes the review, your trademark becomes registered.
Is Professional Certification Needed to Run a Medical Staffing Agency Business?
Applying for and getting certified by appropriate authorities in the medical sector for your business projects you as a professional who is qualified and knows what he doing.
It shows a mark of accountability and quality to your prospective client and builds trust for your brand. That aside, most of the hospitals and organizations you would be targeting requires that you get accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) before working with you.
Hence it is imperative that you know what professional accreditations to obtain for your business. Here are some of the certifications you can obtain for your business;
- Joint Commission on Accreditation of Healthcare Organizations (JCAHO). This is the foremost certification a medical staffing company needs to get.
- The American Staffing Association Certified staffing Professional (CSP)
- Join the National Association of Travel Healthcare Organizations (NATHO) if you are providing travelling nurse placement services.
List of Legal Documents You Need to Run a Medical Staffing Agency Business
Documentation is one intricate part of the business process. Whether you are registering your business, incorporating, applying for insurance or even trying to sign up some clients, you will be faced with providing certain documents and also be required to fill new ones.
There are several documents required by law in the United States to set up and operate a medical staffing agency. There are the general paper works and the industry specific ones which you must have and be ready to present when requested.
These documents show that you are licensed to operate your business, shows approval to operate from your locality, that your taxes are up to date, and that you have relevant certifications and qualifications to run a business in the medical staffing sector.
Here are some of the basic legal documents that you are expected to have in place if you want to legally run your own medical staffing company in America;
- Certificate of Incorporation
- Business License and Certification
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Consulting contract documents
- Apostille (for those who intend operating beyond the United States of America)
- VAT registration
- Federal tax identification number
Cost Benefits of the Medical Staffing Agency
In fine tuning your marketing message, it is important you understand the benefits and value you intend adding to your prospective clients. This is even more important if you are going to integrate online marketing into your marketing strategies.
It is your duty as the owner of a medical staffing agency to create an idea of the value you will add to organizations once they sign up with you, and at the same time make your employees (health workers) see the benefits of getting hired through your agency.
Here are some value propositions you can personalize for your clients;
- One major benefit health organizations gain from outsourcing their recruitment process to Staffing agencies is elimination of hiring cost. The cost of maintaining a specialized recruitment department could be quite high. This cost includes advertisement and time spent reviewing resumes and interviewing candidates.
- At the core of your business’s sustainability is your ability to provide quality staff for your clients. Knowing that your survival depends on this pushes you to go out of your way to get qualified personnel for your clients. Emphasize this point to your prospects and make them see that you can fill their open positions with people that get the job done.
- Provide a backup option for them. Medical directors understand how difficult it is running a health outfit. Staff has to be scheduled 24/7. But what happens when a staff falls ill or is due for a vacation? This is where the medical staffing agency comes in. You provide temp-staff that fills in till the permanent staff recovers or returns to work.
It is also important that you attract talents to your agency. Scouting and getting care givers to sign up with you is hard work. However, bear in mind that what most health care workers complain about is the almost inflexibility of their schedule, unpredictable shifts and the fact that they practically don’t have a life outside their work environment.
Hence positioning your message in such a manner as to address this complaint would go a long way in easing the task of recruiting them. Use the suggested value propositions below to aid you in your search.
- Signing up with a medical staffing agency gives the power back to you ( you choose when to work, where to work, choose whether you want hourly or temporary contracts).
- There is the possibility of earning more than your full-time colleagues. In addition you get health insurance, vacation pay and other benefits.
Positioning your agency as the solution to the perennial recruitment needs of health organizations and as the best platform to connect workers with their dream job is a smart strategy to ensure the growth of your business.
Financing Your Medical Staffing Agency
You may have a brilliant business idea but without the funding to get it off the ground, it would remain just an idea. Every business owner understands the importance of start-up capital in the running of a successful business. There are several financing options open to a medical staffing agency to explore in raising the needed funds for operational purposes.
Here are some of the financing routes a medical staffing company can explore to raise money for their business;
- Personal savings and sale of personal stocks and properties: Dipping into your savings and selling some assets is the first line of action most business owners take to raise fund for their business.
- From family and friends: The good old method of raising money for business. When asking for funding from relatives and friends, it is important you come to terms with the type of loan you are seeking, be specific with the repayment methods and duration.
- From Factoring Companies: This is a method of raising cash in which the staffing company leverages her future receivables to access credits from the Factoring company. This is particularly beneficial to medical staffing agencies whose clients (hospitals) take a longer time to pay, hence ensuring that they (medical staffing agency) has money to fund their payroll and for taxes.
- Raising money from investors and business partners: When making a pitch to an investor or business partner, it is important to have prepared a comprehensive and detailed business plan with information on cash flow, marketing plans, competitor insights and other relevant information that shows what the business is about and how you intend to make money.
Raising money for your staffing agency could be one of the arduous endeavors you have ever undertaken, hence to make it easier on you, prepare a comprehensive and detailed business plan beforehand.
Choosing a Suitable Location for your Medical Staffing Agency Business
Choosing a great and viable location is winning the first part of running a successful placement agency. A dead beat location not only makes the task of running a medical staffing company difficult but it can also increases the odds of failing. Hence it is imperative that you carefully choose a location that has a viable market to sustain your business.
The thing is, you may not even be aware of what makes a location great, and maybe you are wondering what signs to look out for that indicates a place would be economically viable for your setting up your business. Here are some of the things to consider when setting up your healthcare staffing company;
a. Is The Location Near Big Hospitals And Medical Colleges? One of the Business 101 lessons is siting your business near your market if you can afford it. This gives you easy access to your clients and when sourcing for employees.
Siting your medical staffing agency in a city or region with clusters of healthcare organizations reduces the cost of commuting to and fro to meetings and your employees can easily come in for interviews and documentations. Even though you may probably be doing more of your marketing online, it is still good business to choose a place that offers you the greatest access to your ideal clients.
b. Consider The Cost of Renting In An Area: Of course this is by far the greatest influence on choosing an appropriate business location. You need to choose a location that falls within your range. Over shooting your budget will only hurt you in the long term through eating deep into your profits or forcing you to set high prices.
Due to the cost of rent and other associated costs, most business owners prefer starting their business from their homes thereby eliminating these charges and keeping their overhead cost to the minimum. If you choose to work from home, be sure to make other arrangements for meetings especially for interviews. Also consider how accessible your home is and the prevailing legislation regarding running a home business in your state.
c. How Convenient Is The Location: Choosing a location that is hard to locate is a sure sign of failure. Your business premises should be easily accessible both for your employees and clients.
For your convenience score ask yourself, how difficult is it getting to work from home, is it close to public transportation? Is there a free parking space? Is it a safe place? Honestly answering these questions will give you an indication whether the site is appropriate for your business.
Don’t be in a rush to choose a location, remember once that decision is taken – you are going to live with it for at least the next 12 months. No matter what you choose remember it is the quality of service that will keep your clients coming to you.
Starting a Medical Staffing Agency Business – Technical and Manpower Details
At this point, you pretty much know what and what you would need in terms of personnel for your agency. Hence placing ads online (Craigslist, CareerBuilder and Monster) and dropping your fliers in public places such as grocery stores, college campuses and community centers are a smart way to start advertising for applications from qualified candidates.
Prepare yourself for interviews and you can also run competence tests on your would-be employees. You are aware by now that the number of people you can comfortably employ is dependent on your start up fund. It is recommended that you have cash that would be able to keep you in business for at least the first 6 months even without anything coming in.
The Service Delivery Process of a Medical Staffing Agency
You have gotten your first client and all parties have agreed on terms and signed the contract. How do you deliver your service to your client? Does your part end the moment your nurse shows up at your client’s premise or is there something else you should still do?
Being in the staffing industry is unique in that even after delivering the health worker to your client, you are still involved in some capacity like follow ups, appraisal and provisions of resources to your outsource.
This helps to build your brand as one that cares and provides the structure for your workers to succeed. This is a win-win situation, your employees are happy and spread the word; you’re getting free publicity through word of mouth.
Starting a Medical Staffing Agency Business – The Marketing Plan
- Marketing ideas and strategies
Even if you have one of the best medical staffing companies in town, you will still need to let the people that matter to your business know you? This is where having a detailed marketing plan comes into play. When preparing your marketing plan, you would want to include such information as:
- Your target Audience Demography
- Age, Gender and Location
- Other relevant data that clearly defines this group of people for you
Another thing to consider would be channel of distribution. How are you going to reach out to your market? What channels are you going to use? When starting out, you may not have a big budget to run advertisement campaigns but there are relatively inexpensive and effective marketing options you could take advantage of such as;
- Building optimizing your website for Search engines.
- Running a blog where you post valuable contents to build up authority in your niche.
- Create and become active on social platforms. Connect with industry thought leaders here and build mutual professional relationships that could lead to business.
- Run inexpensive online ads to build up brand awareness.
- Start building your mailing list as fast as you can.
- Buy industry specific emails lists and prepare to send email blast with your effective email copies.
Strategies to Boost Your Medical Staffing Agency Brand Awareness and Create Your Corporate Identity
Branding is what your client thinks and feels about you when they hear/see your business name/logo. It is an intangible part of your business which must be carefully nurtured to create the kind of perception you want. Your brand and corporate identity are part of what differentiates your business from your competitors and makes it easy to be identified by your clients and employees.
How do you enhance and improve your brand awareness? Here are some suggestions you can implement right away;
i. Identify who you are: Identifying who you are as a business or how you want to be perceived is the first step in building a recognizable brand.
To help you gain clarity, answer these questions;
- Does your staffing company place the most qualified candidate in the shortest time?
- Do you have a high temp? Conversion rate?
- Do you offer a client web portal for easy of onboarding?
- How regularly do you report to your clients?
ii. Target Your Efforts: It doesn’t make sense to chase the wrong audience with your message. Identify who your core market is and target them with your value proposition. This has the advantage of letting you focus on the people who actually need what you provide and are willing to do business with you.
iii. Enhance Reputation and Build Credibility: Taking conscious steps to enhance your company’s reputation among the right networks sets you up for future wins. Through growing your authority platforms, through recording and sharing clients’ testimonials on your social media profiles and websites you are storing up brand equity.
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