How to Start a Staffing Company

Starting a staffing company is a dauntless task and involves much more than the generic entrepreneurial advice on how to incorporate, advertise, automate, get office space and so on. 

That’s all plenty hard if you’ve never done it before, but I’ll assume you have access to all the self-help books out there and are still left flat-footed on how to really get it going.

Let me also assume that you’ve figured out that going horizontal is not an option.  By going horizontal we mean targeting  a broad constituency of customers and employees, a sort of sling enough mud at the wall and some will stick approach. 

If you have an indefinite supply of cash and patience this might pay off, but for most start ups that’s not the case.  

Step #1:  Establish a market

So let me get to the heart of the staffing start-up challenge: you need to have some very tight relationships that position you to provide something that somebody else needs and is willing to pay for. 

Those relationships might lie within your current employer or your extended family or elsewhere, but they are a must-have for getting started.

Step #2: Get the Money

Funding a start up is not easy.  Bankers much to the chagrin of the entrepreneur don’t loan money – at best they make money you have more liquid and even that is tough in the current credit crisis.  

Getting the money is also a challenge because unlike other areas of our lives where “kind of” and “almost'” seem to get us by, not having the money to fund payroll is a show-stopper.

Step #3: Hire the Right People

I visit dozens of staffing companies every year and can attest that successful staffing owners come from all walks – sales, accounting, recruiting, operations and so on.    Some had staffing experience before starting, others not.  So what is the common denominator of their success?

There are several factors that figure into that common denominator, but the biggest factor in my observation is the choice of the #2 person in the company and in particular that the #2 complement the skills of the owner.

If you’re great at sales and marketing, make sure your #2 can do operations and accounting.  If you’re an accountant, make sure you got a #2 who can do sales and marketing.