Staffing Agency Business Plan
If you want to start a staffing agency or expand your current staffing business, you need a staffing agency business plan.
Over the past 20+ years, we have helped over 8,000 entrepreneurs and business owners create business plans to start and grow their staffing agency businesses, employment agencies and recruitment agencies.
What Is a Staffing Agency Business Plan?
A staffing agency business plan provides a snapshot of your staffing firm as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why Do You Need a Business Plan for a Staffing Agency?
If you’re looking to start a staffing agency, or grow your existing staffing agency, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your staffing agency business in order to improve your chances of success. Your staffing agency business plan is a living document that should be updated annually as your company grows and changes.
This is true for an employment agency business plan, a recruitment agency business, a healthcare staffing agency business plan or a plan for any type of staffing agency.
What Are the Sources of Funding for Staffing Agencies?
With regards to funding, the main sources of funding for staffing firms are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
Angel investors are also a common form of funding for staffing agencies. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.
How to Write a Business Plan for a Staffing Company
Your business plan should include 10 key sections as follows:
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the type of staffing agency you are operating and the status; for example, are you a startup, do you have a staffing agency that you would like to grow, or are you operating a chain of staffing agencies.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the staffing agency industry. Discuss the type of staffing agency you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
Company Analysis
In your company analysis, you will detail the type of staffing agency you are operating.
For example, you might operate one of the following types:
- Office: this type of staffing agency company provides office workers, on a temporary, permanent, or outplacement basis.
- Industrial: this type of staffing agency specializes in placing blue-collar workers for the manufacturing, transportation, construction, and hospitality sectors.
- Specialty: agencies may sometimes specialize in serving a certain sector (such as healthcare), or in placing specific occupational groups (such as nurses or executives).
In addition to explaining the type of staffing agency you operate, the company analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include placement goals you’ve reached, number of new contracts, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to provide an overview of the staffing agency business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the staffing agency industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your staffing agency business plan:
- How big is the staffing agency industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your staffing agency. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your staffing agency business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: retailers, manufacturers, IT, healthcare, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of staffing agency you operate. Clearly retail customers would want different service options, and would respond to different marketing promotions than IT customers.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the types of businesses you will serve and key functions served (e.g., business owner vs. HR manager).
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining clients.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other staffing agencies.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes online recruitment websites and in-house recruiting departments. You need to mention such competition to show you understand that not everyone with staffing needs will hire a staffing agency.
With regards to direct competition, you want to detail the other staffing agencies with which you compete. Most likely, your direct competitors will be staffing agencies located in your geographic proximity.
For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What types of placement do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide superior services?
- Will you provide services that your competitors don’t offer?
- Will you make it easier or faster for customers to engage your services?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a staffing agency business plan, your marketing plan should include the following:
Product: in the product section you should reiterate the type of staffing agency that you documented in your company analysis. Then, detail the specific services you will be offering. For example, in addition to temporary employees, will you provide permanent placement, or will you be specializing in a certain sector or occupation?
Price: Document your pricing structure and how it compares to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.
Place: Place refers to the location of your staffing agency. Document your location and mention how the location will impact your success. For example, is your staffing agency located next to an industrial area or near downtown office buildings, etc. Discuss how your location might provide a steady stream of customers.
Promotions: the final part of your staffing agency marketing plan is the promotions section. Here you will document how you will attract new clients. The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Telemarketing
- Reaching out to local websites
- Social media marketing
- Local radio advertising
- Banner ads at local venues
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your staffing agency, such as serving clients, attracting applicants, processing paperwork, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign your 100th applicant, or when you hope to reach $X in contract value. It could also be when you expect to place your Xth permanent employee or launch in a new location.
Management Team
To demonstrate your staffing agency’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in staffing. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in staffing and/or successfully running small businesses.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you place 10 workers per week or 50? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets: Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $100,000 on building out your staffing agency, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a $100,000 contract for temporary light industrial workers, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for recruitment, onboarding, service, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180-day period, you could run out of money.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a staffing agency business:
- Location build-out including design fees, etc.
- Cost of equipment like software, office equipment and furnishings, etc.
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Appendix
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office design blueprint or location lease or lists of clients you’ve served at past staffing agencies.
Putting together a business plan for your staffing agency business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the staffing-agency business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful staffing agency business.
How Do I Download a Free Staffing Agency Business Plan PDF?
You can download our staffing agency business plan PDF and use our sample staffing agency business plan to write your own business plan.
If you are looking for the quickest and easiest way to complete your business plan, Growthink’s Ultimate Staffing Agency Business Plan Template has numerous features not available in the free template including its financial projections template which automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements.
Finish Your Staffing Agency Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your staffing agency business plan?
With Growthink’s Ultimate Staffing Agency Business Plan Template you can finish your plan in just 8 hours or less!
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
See how a Growthink business plan consultant can create your business plan for you.
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