Creating a Business Plan for Your Staffing Agency
Last Updated March 29, 2024
If you want to be a successful staffing agency owner, you need a blueprint that can put you on the path toward that success. For most, this blueprint lies in the form of a business plan.
Studies show that prospective business owners who create a business plan are 152% more likely to launch their business than those who fail to do so. Brainstorming a business plan is one thing, but actually putting in the work to start your business is another.
Prospective staffing firm owners will quickly learn that organization is one of the keys to success. Plus, there are plenty of requirements to start a staffing agency. You’ll need somewhere to note all these requirements, along with a point of reference that maps out how your business will be structured, your short- and long-term goals, revenue projections, potential financial needs, and more.
You can accomplish all of this through a single document: a business plan.
With that being said, let’s talk about how you can model your staffing agency all by simply drafting a business plan.
Before Devising Your Business Plan
Before getting started with your business plan, ensure you’re ready to handle the demands that come with running your own business by learning how to start a staffing agency. There are several federal and state documents required for opening an employment agency. These include:
- IRS Form 941
- Form I-9
- Form W-4
- Applying for an Employee Identification Number (EIN)
- Articles of Incorporation
- State Tax ID Number
- Business License and Certification
How to Create a Business Plan for Your Staffing Agency
Once you understand what you’ll need to start your staffing agency, you can get to crafting your business plan.
The nine steps below will help walk you through the process.
Identify Your Niche
The first real step of a staffing agency business plan is to consider some of the broader elements of your company, such as what (if any) niche industry you plan to prioritize staffing. You may choose an industry that you’re particularly passionate about, you have experience working in, or one that you believe could lead to a lucrative business.
While not every staffing agency outwardly advertises their niche in their name, the vast majority have an industry they specialize in above all others. Honing in on a single industry to staff can simplify your job as a business owner. An agency that recruits for all industries can still find success, but it will make it more challenging to stand out amongst your competition – think “small fish, big pond.” Agencies that focus on a single industry cast a smaller net but in a much smaller pond. This can make running a staffing agency far more manageable.
Create a Mission Statement and Executive Summary
Your mission statement and summary of your future company should be on the first page of your staffing agency business plan, as this is the first step for any business plan. This mission statement should highlight the purpose of your staffing agency – something more specific than “helping companies find top candidates.”
Make sure to answer the question, “Why?” in your mission statement. Why is matching candidates with ideal roles important to you and your business? Why is your business different?
A mission statement is crucial because it tells potential business partners (and potentially your own future employees) who you are and what you value. It will also serve as a constant reminder to yourself, especially on the most challenging days, of why you’re passionate about running a staffing agency.
Along with your company mission, include a general summary that describes your business in a few paragraphs. Think of this as an “About Us” page you’d see on a typical company website. This should include a “Product and Services” section, outlining aspects of your agency such as your niche, the services you offer, how you stand out from the competition, and how you expect to handle and work with new clients.
Collect Market Research
Conducting market research is a well-known, can’t-miss undertaking when establishing a startup. It involves analyzing market trends, industry trends, your target audience, your target clients, and your competition.
However, it’s not so simple to figure out where to start when it comes to market research.
A few ways to begin your market research journey include:
- Discovering industry experts and discussing topics with them
- Reading market reports and exploring public market data
- Subscribing to newsletters
- Utilizing market research tools, such as GoogleTrends, BuzzSumo, and SEMRush
- Interviewing or surveying your target audience
- Building buyer personas
As a staffing agency owner, a few simple examples include subscribing to newsletters such as Staffing Industry Analysts and reaching out to existing agency owners on LinkedIn.
Identify Your Competitors
Identifying competitors is what many perceive as the final, yet arguably most important, type of market research practice.
But, how do you figure out who your competitors are?
If you’re starting a nursing staffing business, for instance, the easiest way would be to search for medical staffing-related terms on Google and see which sources or agencies are consistently ranking at the top. SEMRush can greatly aid this keyword research process, as you’re granted access to a plethora of information relating to your potential competitors.
To identify your competitors, you can also ask for customer feedback and browse online forums or social media sites. When marketing your staffing agency to potential clients, you can also make note of any other companies that are routinely mentioned. If another employment firm is regularly being referred to by your leads, they’re likely a competitor.
Project Finances and Revenue by Completing a Financial Breakdown
Financial projections are a pivotal component of any business plan. You’ll first want to set an operating budget. Then, denote every significant expected startup cost and operating cost into two separate tables, as shown below:
| Startup Expense | Cost in $ |
|---|---|
| Business Insurance | |
| Web Development | |
| Software / Technology | |
| Business Registration |
| Operating Expense | Cost in $ |
|---|---|
| Office Space (Rent) | |
| Utilities | |
| Employee Salaries (If Applicable) | |
| Ongoing Marketing Efforts |
Once you’ve done so, you’ll want to learn about and consider the following business metrics:
- Cash flow
- Profit
- Loss
- Income (Profit – Loss)
- Revenue
- Balance Sheet
The best way to familiarize yourself with these metrics is by looking at, and eventually creating, all three of the major financial statements: a profit and loss statement, a business balance sheet, and a cash flow statement.
Then, you can begin forecasting sales, estimating figures – such as target monthly profits – and devising a three- to five-year financial projection. These longer-term projections should include monthly to yearly increments showcasing how you’re going to achieve your target numbers. Map out how you plan to attack these projections by setting realistic yet ambitious and quantifiable goals.
Related: How Are the Three Essential Financial Statements Linked?
Explore Staffing Agency Funding Options
Prior to working on securing your first contract, you need to ensure you have the funding to support your staffing agency.
If you’re a first-time business owner, it likely won’t be as simple as securing a traditional bank loan because of the stringent credit score requirements needed to qualify. And asking friends and family can be awkward and intimidating.
Therefore, leaning on alternative financing solutions might be your best option. But don’t worry! Many of these alternative lending options have proven highly effective at aiding small business growth.
A few alternative financing options include:
- Invoice factoring
- AR financing
- ACH loans
- Crowdfunding
- Peer-to-peer lending
Invoice factoring has a reputation as particularly useful for staffing and recruiting agency owners. Reason being, most staffing companies typically don’t have the tangible collateral that banks like to see when offering significant loans.
If you’re unfamiliar with factoring, the process is relatively simple. It involves businesses selling outstanding accounts receivable to a third-party factoring company, or factor, which immediately advances the business 80-99% of the value of each invoice. The factor then assumes collections responsibilities for all of the factored invoices.
Once the business’s customer(s) submits payment to the factoring company, the factor releases the remaining value of each invoice to the business, minus a small factoring fee. As a result, staffing agencies that utilize factoring see an immediate boost in working capital and improved cash flow.
Regardless of how you choose to finance your business, it’s important to prioritize positive cash flow and ensure you have reliable working capital to fund operations and, eventually, business expansion.
Devise a Staffing Agency Marketing Plan
Knowing how to market your staffing agency will go a long way to determining your success.
Tips for creating a marketing strategy include:
- Define your audience
- Build relationships through local events
- Network with industry leaders or experts online, particularly LinkedIn
- Invest time and money into building a professional, visually appealing, informational website
- Prioritize feedback and reviews from clients, and advertise your positive feedback
- Establish your staffing agency as an industry expert by creating a blog and writing guest posts on other websites with your target audience
- Build keyword authority through your written content
- Advertise your staffing agency on social media sites and consider Google Ads
Seek Advice From Mentors, Investors, and Industry Experts
Before finalizing your business plan, it’s good practice to consult with personal business mentors, investors in your staffing agency, and industry experts to ensure you’ve covered all of the necessities.
Update and Revise Your Business Plan
Once you’ve completed your business plan, store it somewhere readily accessible because that’s not the final time you’re going to touch it. You’re likely going to refer back to your document once you’ve gotten the ball rolling with your business. After your first year in operation, you should compare your financial projections and goals with your actual finances to measure performance. You’ll then be able to make alterations to both your future projections and overall business strategy to better fit your position.
How Staffing Agencies Get Contracts
While creating a staffing agency business plan is an essential first step in starting your business venture, the work only continues from there.
Ultimately, winning clients is the most essential element of growing a business.
With that said, here are five tips for finding clients for your staffing business:
- Optimize your website and ensure it is captivating and inviting for new visitors
- Create a detailed client persona to help you understand who you’re marketing your business to
- Provide value for free through hosting webinars and workshops and writing blog posts
- Develop a referral program and ask connections (including existing clients) for referrals
- Personalize the experience by giving each lead individual attention and being flexible with contracts
In Summary: Creating a Business Plan for Your Staffing Agency
No two business plans will look the same. Your operational and growth plans might differ slightly from the blueprint laid out in this article or from the entrepreneur next to you.
What’s more important to remember is that a business plan isn’t just a document you put together and store away. It needs to be revisited and analyzed on a quarterly basis. Tracking goal progress, comparing actuals vs. forecast, and reviewing strategies will prove highly useful as you continuously strive to reach new heights with your staffing company.
Michael McCareins is the Content Marketing Associate at altLINE, where he is dedicated to creating and managing optimal content for readers. Following a brief career in media relations, Michael has discovered a passion for content marketing through developing unique, informative content to help audiences better understand ideas and topics such as invoice factoring and A/R financing.
