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  • Writer's pictureNick Andriacchi

Staffers: Using a Full-Service Lender at Any Stage of Your Business

Updated: Jan 8

A specialty lender plays a pivotal role in the growth trajectory of a staffing company across the six distinct stages of the business cycle: launch, expansion, shakeout, maturity, economic downturn, and recovery.  This program works incredibly well for independent staffers. 

During the launch phase, access to capital is vital. A specialty lender can provide tailored financial solutions, enabling the company to cover contract payroll and bridge cash flow gaps.  Additionally, a full-service lender will provide a value outsource with expertise in payroll, billing, collections, technology, mentoring and more.  This saves a bundle of time and money and will allow the entrepreneur to focus efforts on sales and recruiting.  The 2 things that make staffing companies money. 

As the staffing company enters the expansion phase, outsourced non-revenue functions and unlimited financing becomes even more crucial. To scale effectively, the company must continue to focus on its core revenue-generating activities.  They must also have easy, unlimited cash to continue to fund receivables.  Staffing companies experience exponential growth during this phase and must have the time to plan and cash to expand. A staffing company cannot wait weeks or months for a bank to raise its credit limit to fill orders.  If so, those orders will be filled by another staffer. 

During the shakeout phase, market competition intensifies, necessitating cost optimization and operational efficiency. Specialty lenders assist by restructuring finances or providing working capital, helping the company weather market uncertainties and emerge stronger. Simultaneously, outsourcing non-revenue tasks continues to alleviate administrative burdens, enabling the company to stay agile and responsive to changing market demands.

Upon reaching maturity, the staffing company aims for stability and sustainable growth. A specialty lender can offer strategic financial advice and solutions for long-term planning, such as mergers, acquisitions, or diversification. During this phase, staffing companies must make major investments in their back-room operation.  The company becomes too large to “duct tape” a process together.  Outsourcing these functions saves tens of thousands of dollars.  Additionally, this free’s up internal resources for innovation and strategic initiatives. Monday Temporaries was a prime example.

Monday Temporaries reached this phase in the mid 2000’s and was preparing to sell his business.  The owner John Monday knew the sale was probably a couple of years away and in the meantime the company needed to make major investments in infrastructure to keep the company running smoothly.  Instead, major dollars in software, hardware, firewalls, personnel etc., he decided to outsource these functions to Damian Services, a full service funding company.

And boy did it payoff!  Not only did he save money, it made the sale easier.  The purchasing company loved the fact that data was secure, a good process was in place during the combination of the two companies, and less employees to layoff. 

In an economic downturn, access to capital becomes more challenging.  A specialty lender becomes a lifeline, offering reliable financing options, debt restructuring, or emergency funding to navigate an unexpected challenge. Concurrently, outsourcing non-revenue tasks proves invaluable in reducing fixed costs and maintaining operational continuity during lean periods.

During the recovery phase, the focus shifts to rebuilding and revitalizing the business. Specialty lenders may support the staffing company with growth capital, helping seize opportunities in a rebounding market. Simultaneously, outsourcing non-revenue functions remains advantageous, allowing the company to stay nimble and responsive while redirecting efforts towards re-establishing market presence and client relationships.

A specialty lender's financial support aligns with the staffing company's needs throughout the business cycle, providing critical capital infusion and guidance. Simultaneously, outsourcing non-revenue tasks ensures operational efficiency, enabling the company to focus on revenue-generating activities, adapt to market dynamics, and navigate challenges across each phase of its growth journey.

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