4 Tips in Starting a Profitable Staffing Agency
Entrepreneurs can attest that staffing businesses have the potential to be profitable under the right management. However, ushering a startup company to success is easier said than done. With the number of staffing firms today, standing out from competition takes effort. You need to know how to differentiate your company, attract clients, retain them, apply for staffing business loans, hire the right people, and more.
The role of a staffing agency is to match employees to businesses in need of temporary or long-term workers. They make money by deducting a percentage of the salary set by employers (clients of the agency). The deductions vary, but it’s usually between 30% to 70% based on the supply, demand, location, and type of business.
Many business owners prefer to work with staffing agencies because of the convenience they offer. In the case of employee turnover, they can immediately find a replacement from agencies. Furthermore, leased employees have lower overhead costs compared to regular ones.
Employees also like staffing agencies because it provides many opportunities for employment. While some of the firms only offer temporary employment, it’s an easy way to gain experience that paves the way to long-term positions.
Starting your own company takes hard work, so here are four tips to help you get started.
1. Define Your Competitive Advantage
One of the most common mistakes business owners make is starting a company without clearly defining your competitive advantage. What makes you different from other firms? Why would they choose you? Employers and employees won’t have a reason to avail of your services if you’re no different from everyone else.
You can differentiate your company by answering these questions:
- What makes you different?
- What makes you better?
- If you need employees, would you get them from your own company?
- Are you willing to work for your agency?
It’s important to answer these questions as honestly as possible. Don’t open your doors to the public until you have the right answers to the questions.
Most agencies differentiate themselves through pricing. It’s easy to alter your prices and most companies are drawn to cheaper services. However, charging too low may not be the best strategy.
You may think that in order to attract more customers, you need to offer every type of service possible. However, it’s more strategic to choose to cater to a specific niche market than try to serve everyone. Recent trends found out that staffing firms that specialize in producing technical and educated professionals are at an advantage. Employers find it challenging and time-consuming to recruit a highly technical employee. If your firm can provide these talents, you’ll have the upper hand.
2. Do Business with the Right Clients
After defining your competitive advantage, it’s time to look for clients. But you shouldn’t look for just anyone – you want to find the best types of clients for your business. You need to be strategic when attracting clients to your organization.
LinkedIn, internet boards, and industry associations are some of the most common ways to find clients. However, your competitors are probably looking in here too; bombarding companies with emails and ads. There’s no harm in taking this route, but you’ll be lucky if you can get your message across in the midst of all the noise.
Another way to attract clients without much competition is cold calling. The only problem is that people hate cold calls. Don’t expect every call to be successful. Most of your calls would most likely end up in voice mail or people hanging up on you. But if they do pick up and you get your message across, you’ll have a chance to close a sale.
Another way to choose the right clients and build your business is through referrals. While this method is effective, it can also take time before you can reap results. Cold calling, along with social media posting and industry associations, is the fastest and cost-effective way to find clients.
3. Find the Right Employees
Industry experts say that employee referrals are the most effective way to hire workers. While this strategy does work, it’s only viable for established companies. Startup staffing companies find it challenging to get credible referrals.
Since there are hundreds of staffing companies that are also looking for the best, you need to step up your game. You need to make sure your company’s working environment is a place where professionals want to work. Do you offer great employee benefits? Do you have a list of reputable clients? How does your pay scale comparable to other companies in your industry?
If you’re a startup company, you can build your employee base by joining LinkedIn, and other websites such as Monster, CareerBuilder, and more. You can also attend trade shows and organizations related to your industry.
4. Become Well Versed with Human Resource Management
To create a pleasant working environment, make sure that your clients and employees are happy with their jobs. However, there will be issues that arise between your clients and employees whether you like it or not. When this occurs, it’s your responsibility to intervene and deal with the underlying issues before they become worse.
For this reason, it’s important to become well versed in handling employee and client complaints in a calm and effective manner. Keep in mind that it’s crucial to remain fair and unbiased throughout the whole ordeal. Mastering human resources management is imperative. When disputes are handled professionally, you’ll be able to build your reputation and generate referrals.
Staffing Business Loans Tailored to Your Staffing Agency’s Needs
Starting a staffing agency is no easy feat. It takes a village to get started, as well as enough working capital to keep it running. But just like any other company, there will be times when sales are scarce. Here’s where staffing business loans come in. By applying for one, you’ll be able to address the needs of your staffing agency. It’s important to know your staffing business loan options by talking to an experienced financial advisor. They’ll be able to help you find the most suitable lender and loan program for your business.