How To Start Your Own Million Dollar Temporary Help Service

This is a service business with excellent growth potential,indications of strong stability, a nationwide market with agrowing demand and a risk factor that's rated average or lessthan most new business ideas. Temporary Help Services are wellsuited to absentee ownership situations; require no experience ortechnical knowledge on the part of the entrepreneur; and haveonly minimal equipment needs. Net profits before taxes for someestablished temporary help services have been reported as high as$500,000 per year.
There's a difference between regular, private employment agenciesand a temporary help service. The employment agency is a"brokerage" office that matches unemployed persons with availablejobs. The temporary help services hires people onto its ownpayroll, sends them out on contract jobs, and pays themaccordingly.
Temporary help services make money "off the top." They send outtemporary workers on one or two day only jobs paying $15 an hourto the worker, and collecting $20 an hour for the time the workerspends on the assignment. More and more, businesses are willingto pay the premium costs for a trained person for just a few daysat a time, than to accept the burden of a 40-hours per weekpayroll obligation and the task of finding enough work to keepsuch a person busy enough to justify a fulltime salary and theattendant support costs. Businesses everywhere are finding iteasier to pay more for "temporaries" that hire 40-hour per week"permanents." That's the secret of success with this kind ofbusiness, and the point to keep in mind when selling yourservices.
The successful temporary help services recruits as many skilledand qualified workers as possible. These workers differ from theregular job-seekers in that they're looking for "temporary" workonly. For any number of reasons, they're only willing to work onjobs lasting from one to five days, or perhaps two or threeweeks, on any one job assignment.
These persons are ideal for the employers needing help but notwanting to hire and train fulltime employees. Your task will beto find and attract top people and to maintain complete files onthem. What kind of jobs they specialize in, their attitudes aboutwork, and when or how often they're willing to wok would beessential information to have in your file.
Each person should be tested in your office, sent out on a fewassignments to build a favorable reputation as a good worker, andthen offered a permanent listing on your roster of availablespecialists.
Work hard to build your roster of available workers. Withinninety days of start-up, you want to be able to send someone outto fill any employer's needs, regardless of the job requirements.Job assignments will range from loading dock to light clericalwork to word processing and even master-of-ceremonies work.
Depending on the size on your market, you could conceivablyspecialize in temporary help for data-processing, the medical orlegal professions, or perhaps the retail trade; and you'd stillmake a lot of money. Generally, though, we are going to show youhere how to start a "full-service" temporary help agency.
You'll need a good mix of employers in your area for best chancesof real success. Your area can be one of high unemployment or onewith relatively few unemployed. Whichever the case, the thinkingof the business community and the work force available should benon-traditional; there should be an undercurrent of thoughttoward the idea of calling in specialists to handle a jobquicker, and more efficiently, that the fulltime worker.
The people wanting to affiliate with you as workers will behousewives, college students, retired people and a large numberof people who like to work, but don't want to be tied down to aregular job. When you explain the concept of your service, you'llbe pleasantly surprised at the number of traditionalists you'llconvert to temporary workers.
First, you should visit your local Chamber of Commerce office.Explain the philosophy of your service, meet the chamber officersand ask for their help. You'll find that they have a listing ofall major businesses in the area, plus the names of the 'right"people to talk to in selling your service. If you request, youmight be invited to Chamber meetings and introduced to thebusiness leaders in your community. The only kind of informationit is likely they will be able to help you with is a listing ofdoctors, lawyers and small, home-based, one person enterprises.However, don't neglect contacting these people; they have a needfor varied specialized help just as the larger, more widely knownfirms in your community.
You can locate your offices just about anywhere. You'll find,however, that your greatest success will come if you locate in amodern office building housing professionals such as lawyers,accountants, investment counselors, insurance company offices,etc. Project a professional image. Locate in a downtown orbusiness section of your town when you are able to do so.
Basically, you'll need 6000 to 700 square feet of office space.You should have a reception area, two offices and a room to storesupplies. The more prestigious your business address and office,the better caliber clientele you'll attract. people looking fortemporary work, and employers considering using your services,will doubt your abilities if they aren't favorably impressed withyour image.
It is possible to start this business in your home, but make sureyou have the space for a reception area, and at least asemi-private interview area. Most of the selling efforts will beconducted by mail, phone and personal visits to the employersplace of business, so you won't have any problem there. However,you may run into zoning problems if your city zoning peoplediscover a large number of cars parked at your house every day.It certainly always helps to be a good terms with your neighbors,and further, working by appointment will keep traffic undercontrol.
So, practically speaking, starting your business from home willrequire a much smaller initial investment. in this particularbusiness, rent and advertising will be your largest expense, sobeginning the business from your home is definitely worthconsidering if your start-up funds are limited.
In actual operation, have the applicants interested in yourservices contact you by phone. You would then set up appointmentseither in their homes or your own, thereby eliminating congestionof cars in front of your home, as mentioned above. If you beganon a part-time basis, you could have a family member or friendanswer your phone and set up appointments for you. If you dobegin part-time, and working out of your home, you might lookinto the advantages of a professional telephone answeringservice.
Another idea for saving on costs might be to rent unused spacefrom a business already established. These businesses might besales and distribution offices, suburban insurance agencies,quick print or copy shops, and repair service shops. Look around;many businesses have had to take what was available at the time,and would be more than happy to lease or share their vacantspace. Keep in mind though, that you'll do much better with anoffice of your own, and you should move into one just as soon asyou can afford one. Proper facilities that convey a professionalimage should be number one on your list of priorities.
Your business image is projected by your address and theappearance of the building in which you locate. Your receptionarea will set the mood of professionalism and efficiency. Thereception area will should be inviting--walls painted in lightpastel colors, wall prints, floor lamps and wall-to-wallcarpeting. It should also feel comfortable while beingfunctional. Comfortable modern chairs and sofa; perhaps a floorplanter or two, reception desk and ask trays all help to achievethis effect.
The main office need have only a desk and a comfortable chair,facing the door, a chair beside or in front of the desk, and afile cabinet. A print or two on the walls, and perhaps a bookcaseare the only "extras" you might use to dress up your office.
Your second office equipment will be for testing your applicants.You can inexpensively build a table along the length of twowalls, partition it into cubicles and have an electrictypewriter, an adding machine and maybe a headset connected to adictaphone/recorder, and another set up for testing short handcapabilities. Later on, you'll probably want to have a wordprocessor and a computer.
Ideally, you should also have a sales office and a storage room.The sales office will be where you greet and talk with employerswho drop in to look over to find out about your business. Mainly,this office will be where your people will work from when callingprospective clients and selling your services by phone. Thestorage room needs only shelves to hold various forms, mailingpieces, envelopes and business records.
One way to hold your start-up costs to a minimum is by leasingyour office furnishings and equipment. Whatever you do, rememberthat you're projecting an image, so don't settle for less thanthe best. This is absolutely imperative in regard to anyequipment used for testing your applicants,. You might be able towork out an arrangement with the business department of a localcollege, or business school, to send you applicants to them fortesting on their machines. Such an arrangement, even at a cost of$5 to $10 per test, could save you several thousand dollars instart-up costs.
The first person you hire should be either an experienced manageror someone you can quickly train to assume those duties. It'sbest to hold out for a person with at least one year experienceas a bona fide personnel manager. This person should be outgoing,detail-minded, people-oriented and able to work well underpressure without losing his sense of humor. You don't wantsomeone likely to blow this cool when confronted with a difficultsituation.
Your manager will be responsible for organizing the interview andtesting systems, for setting up your sales solicitation program,and for supervising the temporary workers, as well as your officestaff. It's a highly responsible and demanding position, so don'tbe reluctant to spend the money necessary to get the best. Youwill need to research to determine what salary such a top managerreceives in your area.
The next member of your staff should be an enthusiastic, hustlingsales person. This employee should be experienced and adept atselling by phone as well as in person. Unless you can afford topay a good direct mail advertising copywriter to create youmailing pieces for you, it would be wise to look for direct mailadvertising or copywriting experience in the background of thesales person you expect to hire.
Your sales person should spend the mornings calling prospectiveemployers on the phone, and the afternoons making in person salescalls. With this kind of work routine in mind, look for salespeople with high ambition and energy levels. Try to pick the kindwho'll come in early and stay late to work on his direct mailefforts, clearing the decks so that he uses his time duringregular business hours to close sales by phone and in person. Youneed and want a "closer"---not an order taker. Be as selective asyou have to be in choosing this sales person.
In addition to the going rate which a sales person of this typeshould be paid, you should also consider paying a 5 percent bonusfor each new account brought in. When you find the right person,it will be worth it, so make it worthwhile to join your staff.Not all sales people will necessarily develop into good salesmanagers, so try to find one who fits ALL your requirements. Thesales manager would recruit, organize, develop, motivate andsupervise your sales staff. With those responsibilities, you'dwant to offer a salary plus override on the sales production ofhis staff of sales people.
You'll need an efficient and foolproof bookkeeping system to keeptrack of your payroll, client billing, income taxes, workschedules, hours worked and all the money that comes in. For thischore, I suggest that you contract with a company that handlesthis type of work for a number of independent small businesses.Explain to them everything you think you need; ask them to set upa system, and then instruct your receptionist on how to keep itup to date on a weekly or monthly basis.
You'll save money in the long run if you will consult with anaccounting firm and have them set up a system that not onlyworks, but can be interpreted and computerized from thebeginning. Later on, you may want or need to hire a fulltimebookkepper just to keep up with the daily entries. If so, checkout salaries paid in your area for that kind of work.
The last member of your staff will be your receptionist. Thisperson should be a lady better than average looks, a lot ofempathy for people in general, and an easy smile. She shoulddress stylishly, but not provocatively. When she isn't answeringthe phone or greeting customers, she can be administering tests,doing miscellaneous typing, making folders for the records ofyour workers, and general office filing. And if you have anaccounting system set up, she could also assist with the dailybookkeeping.
The kind of temporary workers you'll want to attract will fitinto several general categories, and can be recruited in a numberof different ways. Good places to look first will be in thebusiness, secretarial and technical schools in your area, andperhaps also the colleges. To sustain your efforts, have abrochure and your company made up, and make sure the placementdirectories or counselors always have an ample supply on hand.Many schools stage "career days," when employers are invited toset up booths on campus and talk to the students, pass outliterature, and invite the students to visit their companies.Make sure that you know about these, and that your firm isrepresented.
Another group will be housewives who perhaps held regular jobsbefore marriage or the birth of a baby, and now want to get backinto the job market. You can bring these people in by postingbulletin board notices, arranging announcements at meetings, orguest speaking engagements. And of course you can try for guestappearances on local radio or television talk shows.
Another group to recruit will be the "bored with life" people.These will be in the 45 to 55 age group, not satisfied with thefuture where they are, and looking for a better opportunity.
It is imperative that you begin recruiting and signing workers assoon as possible; at least a month before you open for businessis not too early. According to industry surveys, the most commonreason for the failure of temporary help services is not enoughworkers lined up to fill the client demand. When you get arequest for help, you should be able to send out a qualifiedperson.
Each market area differs in the number of different types ofworkers a temporary service should have available, but in everycase, it's best to have more than you figure to be a basic need.You must establish a maximum number of people within any oneoccupational field that you'll sign up, or else you won't be ableto keep everyone busy. Unless you keep the workers you haveregistered working pretty much as often as they want to work,you'll begin to lose them.
It's not hard to determine when a person is losing interest intemporary job assignments through your firm. Whenever you call togive an assignment and you can't reach the person you're calling,try several follow-up calls. It should become obvious to you thathe's no longer interested if you still can't reach him with yourfollow-up calls. It's a good practice to ask for notification ofvacation or other plans that will affect their availability forwork.
If you call and a job assignment is refused with a lame excuse,come right to the point and ask if he wants to change hisavailability status, or if you should drop him from your list ofavailable temporary workers altogether. Never coddle a temporaryworker. if he's not available when you call to give anassignment, or he gives you a less than valid excuse for notaccepting, flag his "call assignment" card and move onto yournext available worker. You might call a couple days later tocheck his availability and interest in continuing to work, butdon't waste too much time. You can always reinstate such aworker, but it is probably better to spend the time recruiting areplacement.
As mentioned earlier, one of your major expenses will be foradvertising. Your manager and sales people should keep youadvised on your current advertising impact and results, and fromthis you should have a good understanding of how to use youradvertising budget most effectively. Your advertising should be'double-barrelled," aimed at both the employer and the worker.
Generally, your efforts to add new employers to your client listshould focus on direct mail. Advertising efforts to recruit newtemporary workers should be almost exclusively devoted tonewspapers. Years ago, some radio stations sold sixty-secondcommercials to a few temporary help agencies. The agencies talkedto prospective employers, playing up to the fact that they hadskilled workers to handle overload and deadline situations. Thesecommercials were broadcast in the mornings before 8 o'clock. Thenthey followed up during the afternoon hours with commercialsinviting people seeking temporary help to come in and sign up.Everything worked well except that not enough prospectiveemployers called often enough to justify the expense. Thisadvertising method is being followed on a small scale in someareas even now, so watch for it.
For really professional results, you should get a freelanceadvertising copywriter to do your direct mail piece. This shouldbe a 4-page brochure making these points.
1. All employers have a sudden work overloads; face deadlinesituations; or are suddenly left with a mountain of work forspecially trained employees just when they are home sick, onvacation or off for an emergency.
2. Your company understands these workload problems, and hasavailable skilled professional replacement workers who canquickly step in and get the job done.
3. Your company thoroughly test each of the specialists hired forthese special staffing crisis situations, and can assure theemployer that they are tops in their individual areas ofexpertise.
4. Your company is well aware that many businesses would like tosave the expense and headaches of hiring a full-time specialistof the same caliber of your people on a "temporary" or "on-call"basis. YOUR people cannot be hired by the prospective employerbecause they already work for you; but if and when a temporaryworker is needed, your company stands ready to fill the need,regardless of the job specialty required.
5. Even if he doesn't need one of your people today, the needcould arise at any time, and suddenly. So he should just keep thebrochure and your telephone number handy, and don't hesitate tocall you personally for whatever help is needed.
Once you have the copy written, decide on the layout and typestyle you want to use; if and what color will be used; and takeit to a quality printer. Your brochure should be printed on60-pound coated paper, and folded to suit your needs by theprinter.
Your complete mailing should consist,of a short cover letterinviting the recipient to avail himself of your services; abrochure explaining your services in greater detail; postage paidbusiness reply card. The mailing envelope and the cover lettershould addresses to each business owner or personnel manager byname.
Pay the cost of a bulk rate postage permit; have your permitindicia imprinted on your mailing envelopes; and organize yourmailings to get between 200 and 500 letters into the mail threedays a week, every single week. Don't skimp on your direct mailadvertising efforts, because this will be the lifeblood of yoursuccess.
Your newspaper ads for qualified workers looking for temporaryassignments should be display ads in the "Help Wanted" section.Most such ads are one column wide by 3 to 6 inches deep. Be sureyou have an ad running in the Sunday paper, and at least one moreon Wednesday or Thursday. Before you even start solicitingaccounts, you could run an ad one column by 6 inches deep everyday for a month.
These ads should invite the readers to come in and register withyour company. Work with your freelance copywriter to say what youwant to say. Overall, though, these ads should explain that youhave plenty of jobs going begging; that the worker sets his owndays to work, and can take jobs as often or as seldom as helikes. Stress the real advantage of "paychecks on yourterms"---an impossibility with a nine-to-five job. (We have hadreports of employed persons coming in to interview, going backand quitting regular jobs, and becoming great "temporaries.")
Don't forget to send out news releases to all the media in yourarea when you open for business. Leave yourself open forbroadcast talk show interviews, and when you promote someone,pass special milestones or become involved in unusual stories inconnection with your business, at least telephone the media andgive them this information.
The most important requisite for success, however, is consistentadvertising. In a city of 100,000 population, you should budget$10,000 for your first year advertising. Plus, get involved in asmany promotions and as much public relations contact andpublicity coverage as possible. Once you're beyond the"break-even" point in your business, you will allocate funds foradvertising based on your gross income.
In day-to-day operations, your manager will interview applicants;do testing; talk with clients; solve problems; take orders fromemployers; and make job assignments. Usually, his busiest timewill be right after lunch when job orders start to come in. Withthis in mind, you might want to arrange for him to take an earlylunch period.
While your manager is "running the show" your sales person willbe making telephone calls in the mornings, and in person duringthe afternoons. It's a very good idea to send out your directmail advertising one week, and then call on these same people,either by phone or in person, the next week. Remember that yousales calls should be relaxed visits, allowing the prospects tolearn more about your business and the kinds of people you haveavailable. During each sales call, the prospect should be leftwith the feeling that your company can save him money, solve alot of production and scheduling problems, and take theexasperation out of his personnel requirements.
As a rule, you'll find that most jobs are called in during theafternoon hours. With this in mind, it would be wise to have aset procedure for your specialists to call you each afternoon tolet you know where they can be reached thru 5:00 p.m. if they areavailable for a job assignment the next day. You might want toset a policy of "no call from you---No assignment for you."
Most temporary help agencies give their workers a supply of a3-part time card when they're hired by the agency. When therequest for a worker comes in, the most qualified in the requiredcategory is called. Job, name of company, location, approximatelength of job, and salary are all explained. If they agree totake the offer, they fill in the time card for the day the workbegins. When they report for work, They have the time card signedby the employer to verify starting time, and finishing time. Onecopy of the time card stays with the employer; the temporaryworker keeps a copy; and the other copy is mailed to your office.Smooth and simple, but make sure you've got everything worked outbefore you begin.
Your bookkeeper notes the proper information on the ledger forthat employee, files the time card, and sends a ledger duplicateto accounting for billing. Of course a reminder call should bemade first, but as a rule, any account that hasn't paid withinthirty days should receive a personal visit. As to the hard-coredelinquent account, no more employees furnished, and a collectionagency to clear up the account will be your policy. You may wantto look into the advantages of selling your accounts receivableto a factoring company.
Run like the brokerage type employment agencies, your temporaryhelp agency will not require licenses other than those requiredby any other business in your area. You should, however, bondeach of your employees in order to protect yourself from anypossible liability or other legal entanglements. And of course,you'll need to carry a standard business insurance policy.
That's it, the HOW, WHAT, WHY and WHERE---of getting started withyour own profitable temporary help services! Remember it takessolid and consistent advertising, earnest recruiting, andselling. So don't stop or let up until you have everyone in yourarea registered, and every possible employer as a client, awareof your business. It's a big job with lots of challenging workinvolved, and you'll need good people to help. It is worthwhileto search out these people with care, to be sure you have good,reliable employees---the rewards will be worth it! Organize yourbusiness for success, and get with it. The WHEN is NOW!!!