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What Do You Need To Start a Staffing Agency?

Starting your staffing agency is a great way to control your career and make more money. But, like any other business, there are requirements and costs that you’ll incur when getting started. 

This article will outline what those are so you can start your staffing agency on the right foot.


What Is a Staffing Agency?

A staffing agency is a company that provides temporary or contract-based staffing services to businesses. They can provide workers for various functions, including administrative, clerical, industrial, and technical roles. Staffing agencies are helpful to companies who have temporary vacancies or need extra help during a busy season.


Requirements to Start a Staffing Agency

If you’re considering starting a staffing agency, there are a few initial requirements you’ll need to fulfill in order to be successful. We’ll dig deeper into each requirement, along with how you can attain it.

Staffing Agency Experience

Having staffing agency experience can be extremely beneficial when starting your own agency. This experience can come in the form of working at a staffing agency, managing a staffing agency, or owning and operating a staffing agency. 

If you don’t have any experience in the industry, it’s vital to research and learn as much as you can about how the competition operates.

Staffing Services Niche

There are a variety of staffing niches that you can focus on. Some options include administrative and clerical, healthcare, industrial, and technical staffing. 

It’s important to choose a niche that you’re familiar with and have a good understanding of the market. This will help you better serve your clients and find the right candidates for their needs.

Business Plan

Once you’ve chosen your niche, it’s time to start putting together your business plan. Your business plan should be thorough and include all aspects of your business, from your marketing strategy to your financial goals. This document will be essential for securing funding and launching your business.

While your business plan will guide the first few steps of your business, it’s not a permanent map. Each year, you should revisit your business plan and adjust based on the results of your initiatives. Plan to the best of your ability, but don’t fret about knowing exactly what will happen over the course of the next decade.

Legal Business Entity

You’ll need to choose a legal business entity for your staffing agency. This can be a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each option has its own advantages and disadvantages, so be sure to consult with a lawyer or accountant to determine which is best for your business.

When choosing, consider:

  • Founding team size
  • Tax implications
  • Ownership plans

Insurance Policies

When starting a staffing agency, it’s important to have the proper insurance policies in place. This will protect your business in the event that something goes wrong. Some of the insurance policies you should consider include:

  • General liability insurance: This policy will protect your business from any injuries or property damage that may occur.
  • Professional liability insurance: This policy will protect you from any lawsuits that may arise due to your services.
  • Business owner’s insurance: This policy will help protect your business in the event of a fire, theft, or another disaster.
  • Workers’ compensation: This policy will provide benefits to your employees in the event that they are injured or become ill as a result of their job.

Permits and Licensing

There are a variety of permits and licenses that you’ll need to obtain in order to start a staffing agency. These can include a business license and a professional license. Consult with your local government to determine which licenses and permits are required in your area.

Startup Costs

Starting a staffing agency can be costly, so it’s important to have a good understanding of what your staffing agency startup costs will be. In order to start a staffing agency, you’ll need some start-up capital. 

Exactly how much you’ll need will vary depending on the type of staffing agency you start, but you can expect to spend anywhere from $10,000 to $50,000.

Some of the expenses you’ll incur include:

  • Licensing and permit fees
  • Office space and equipment
  • Marketing and advertising expenses
  • Staffing costs
  • Insurance premiums

Some of these costs you can reduce. For example, by starting a virtual staffing agency, you can eliminate the need for office space and equipment. You can also save on marketing and advertising expenses by utilizing social media and word-of-mouth marketing. Dig deeper into the costs of starting a staffing agency and opportunities to save.

Marketing Plan

In order to attract clients, you’ll need a solid marketing plan. Your marketing strategy should include tactics like online advertising, PR, and networking. It’s also important to make sure your website is up to date and looks professional.

Your marketing strategy is critical for the success of your staffing agency. You’ll need to create a plan that will help you attract new clients and find qualified candidates. Successful marketing plans have online and offline components. Some of the methods you can use include:

  • Advertising: Paid advertising is a great way to reach a large number of people quickly. You can advertise your agency in newspapers, online, on TV, and on local radio stations.
  • Social media: Social media is a great way to connect with potential candidates and clients. You can create profiles for your agency on popular platforms like LinkedIn, Facebook, and Twitter.
  • Recruiting events: Hosting recruiting events is a great way to meet potential candidates face-to-face and build relationships with clients.

Staffing Agency Pricing Model

There are three main types of staffing agency pricing models: hourly, contingency, and retained.

Hourly pricing is the most common pricing model. Under this model, you charge clients by the hour for your services. This is a good option for businesses that need short-term staffing solutions.

Contingency pricing is when you charge a client a percentage of the employee’s first year’s salary when they are hired. This is a good option for businesses that are looking to hire long-term employees.

Retained pricing is when you agree to provide certain services to a client for a set fee. This is a good option for businesses that need long-term staffing solutions.

Consider how your competitors charge for their services when building your pricing. You don’t have to choose the same model as other industry providers, but you should be aware of how your clients are used to paying for staffing services.

Customer Relationship Management Software and IT Support

One of the most important things you’ll need when starting a staffing agency is customer relationship management (CRM) software. CRM software will help you manage your interactions with clients and candidates. It will also help you track your leads and sales pipeline.

In order to ensure the success of your staffing agency, it’s important to have reliable IT support. Your IT support should include:

  • A backup and disaster recovery plan
  • Security measures to protect your data (and your client data)
  • 24/7 support in case of an outage

You can employ an in-house IT professional or outsource the service. Similarly to marketing services, it’s more cost-effective to start by outsourcing these services as a small business. As you grow your team, you may find it advantageous to hire a full-time IT support specialist.


Get Started

If you’re looking to start a staffing agency, it’s important to understand the requirements and expenses involved. You’ll need start-up capital, a marketing plan, and customer relationship management software in order to get started. Be prepared legally with proper licensing, permitting, and the right insurance policies in place. With the right planning and preparation, you can start a successful staffing agency.