The thought has entered your mind more than once… You’ve proven your abilities as a hard worker. You make wise business decisions on a consistent basis. So, ask yourself a few questions.
· Do I have what it takes to do it for myself?
· Can I succeed without a boss providing day-to-day direction?
· Do I have the resources to succeed?
If the answers are YES, make a plan and make it happen!
During my 28 years of experience working with start-ups and small staffing companies, I have found they are very successful if the company is structured correctly on the front-end and market conditions are favorable. When that time is comes, begin the process by putting “pen-to-paper”.
A clear and concise business plan is a good place to start. A well thought out business plan will help put all the pieces in place prior to launch.
Here are some the main points to focus on when putting together a business plan:
I. Set Clear Goals
· Create a Company Vision
· State your goals
Ø Identify your company’s unique competitive advantage
There are lots of staffing companies out there, why should a customer use yours?
II. Executive Summary
· Create a Company Organizational Chart
(Current & Projected Future)
· List Stockholders & Officers
Ø Define Stockholder & Officer Roles
· Outline an Operating Agreement or By Laws between shareholders
· Incorporate and register with taxing agencies
The latter two are extremely important. It is crucial to define the duties of each "hands-on" stockholder. It is also extremely important to anticipate various scenarios that could change the landscape of your business and have agreed upon solutions in writing. For example, if one stockholder wants to leave the business, there should be something in writing addressing this scenario, which the stockholders have agreed to, leading to an amicable solution.
III. Market Conditions & Networking Plan
• Determine the number of potential customers
Ø Identify specific customers that will use your firm day one
• Gage the number of positions in demand
• Availability of Candidates & Employees
• Number of Competitors in the Market Place
Networking is the name of the game. Most people do not have tens of thousands of dollars to burn until the company turns a profit. Know which companies will use your service prior to starting.
IV. Financial Projection
(Monthly & Annually)
· Sales Goals
· Pricing
Ø Projected Income & Cash Flow
Be as conservative as possible with your projections. At the end of the day, you need to earn a certain amount of income to make this venture worthwhile.
V. Capital & Infrastructure
· Startup & Operational capital needed
· Secure workers comp and other required insurances
Ø Working capital needed to grow business
It’s been my experience that most companies need at least 6 months-worth of cash to pay for operating expenses such as rent, computers, supplies, etc., until the business can sustain itself. Dollars required for working capital such as payroll & payroll taxes can be much, much, more upwards of $1mm if the business takes off quickly.
Working Capital Financing Options
o Banks
o Payroll Funding Companies
o Franchisors
o Venture Capitalists
Where can you find unlimited amounts of money to finance your Accounts Receivable? Well, a bank typically will not lend money to a business of less than 5 years. Franchisors and venture capital will take too much control of the company away from you. A more successful alternative is a payroll funding company.
With a payroll funding company, you maintain 100% control of your company while realizing the highest advance rates. Payroll funding companies that understand staffing will also finance the profit as well so cash flow is maximized.
Infrastructure
It is expensive to build an infrastructure and hire employees to manage the back office. Most entrepreneur’s expertise lies in sales and recruiting. And let’s face it, there is nothing to manage until there are contractors working.
Companies like my employer Madison Resources provide their clients with very cost effective, critical infrastructure so entrepreneurs can focus on growing the business. In addition to payroll funding,
Payroll Processing
Tax Filings
Invoicing
Management Reporting
Credit & Collection
ATS and CRM Software
Expert Industry Advice and much more
These services allow you to keep your fixed expenses to a minimum, thus stretching out your precious funds. It also gives owners the ability to stay nimble and maximize opportunities as they arise.
Staffing is a great business as the barriers to entry are low and the success rate is quite high. If you are thinking about it, feel free to contact me. I can help.
Comments