Creating a business plan is essential. Still, it can be especially helpful for staffing agency businesses who want to improve their strategy or raise funding.
A well-crafted business plan outlines the vision for your company and documents a step-by-step roadmap of how you are going to accomplish it. To create an effective business plan, you must first understand the essential components of its success.
This article provides an overview of the key elements that every staffing agency business owner should include in their business plan.
What is a Staffing Agency Business Plan?
A staffing agency business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will be successful, roadmaps for different functional areas of your company, your areas of competitive advantage, and information about your financial burn rate.
Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned for sustainable success.
Why Write a Staffing Agency Business Plan?
A staffing agency business plan is required for banks and investors. The document is a clear, concise guide to your business and the steps you will take to make it profitable.
Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.
Writing an Effective Staffing Agency Business Plan
The following are the key components of a successful staffing agency business plan:
The executive summary of a staffing agency business plan is a one to two-page overview of your entire business plan. It should summarize the main points, which you will present in full in the rest of your business plan.
- Start with a one-line description of your staffing agency company.
- Provide a summary of the key points in each section of your business plan, including information about your company’s management team, industry analysis, competitive analysis, and financial forecast.
This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.
If you are just starting your staffing agency business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your staffing agency firm, mention this.
You will also include information about your chosen staffing agency business model and how, if applicable, it is different from other companies in your industry.
The industry or market analysis is a crucial component of a staffing agency’s business plan. Conduct thorough market research to determine industry trends and document the size of your market.
Questions to answer include:
- What part of the staffing agency industry are you targeting?
- How big is the market?
- What trends are happening in the industry right now (and if applicable, how do these trends support your company’s success)?
You should also include sources for your information, such as published research reports and expert opinions.
This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.
For example, a staffing agency business’ customers may include small businesses that need short-term or contract employees to support their operations during busy periods.
You can include information about how your customers decide to buy from you and what keeps them buying from you.
Develop a strategy for targeting those customers who are most likely to buy from you and those who might be influenced to purchase staffing services with the right marketing.
A competitive analysis helps determine how your product or service is different from competitors and what your unique selling proposition (USP) might be that will set you apart in this industry.
For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation. In what ways are you different from (and ideally better than) your competitors?
This part of the business plan is where you determine and document your marketing plan. Your plan should be laid out, including the following 4 Ps.
- Product/Service: Detail your product/service offerings here. Document their features and benefits.
- Price: Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
- Place: Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them, if applicable?
- Promotion: How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your staffing agency business via a combination of these marketing channels.
This part of your staffing agency business plan should include the following information:
- How will you deliver your product/service to customers? For example, will you only do it in person or over the phone?
- What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?
The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing to the overall brand image you are trying to present.
Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the critical milestone(s) you hope to accomplish each quarter for the next four quarters and then each year for the following four years.
Examples of milestones for a staffing agency business include reaching $X in sales. Other examples include hiring a certain number of employees or working with a certain number of clients.
List your team members, including their names and titles and their expertise and experience relevant to your specific staffing agency industry. Include brief biographies for each key team member.
Particularly if you are seeking funding, this section aims to convince investors and lenders that your team has the expertise and experience to execute your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.
Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix).
This includes the following three financial statements:
Your income statement should include:
- Revenue: how much revenue you generate.
- Cost of Goods Sold: These are your direct costs for generating revenue. This includes labor costs and the cost of any equipment and supplies used to deliver the product/service offering.
- Net Income (or loss): Once expenses and revenue are totaled and deducted from each other, this is the net income or loss
Sample Income Statement for a Startup Staffing Agency
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Revenues||$ 336,090||$ 450,940||$ 605,000||$ 811,730||$ 1,089,100|
|Total Revenue||$ 336,090||$ 450,940||$ 605,000||$ 811,730||$ 1,089,100|
|Direct Costs||$ 67,210||$ 90,190||$ 121,000||$ 162,340||$ 217,820|
|Total Direct Costs||$ 67,210||$ 90,190||$ 121,000||$ 162,340||$ 217,820|
|GROSS PROFIT||$ 268,880||$ 360,750||$ 484,000||$ 649,390||$ 871,280|
|Salaries||$ 96,000||$ 99,840||$ 105,371||$ 110,639||$ 116,171|
|Marketing Expenses||$ 61,200||$ 64,400||$ 67,600||$ 71,000||$ 74,600|
|Rent/Utility Expenses||$ 36,400||$ 37,500||$ 38,700||$ 39,800||$ 41,000|
|Other Expenses||$ 9,200||$ 9,200||$ 9,200||$ 9,400||$ 9,500|
|Total Other Expenses||$ 202,800||$ 210,940||$ 220,871||$ 230,839||$ 241,271|
|EBITDA||$ 66,080||$ 149,810||$ 263,129||$ 418,551||$ 630,009|
|Depreciation||$ 5,200||$ 5,200||$ 5,200||$ 5,200||$ 4,200|
|EBIT||$ 60,880||$ 144,610||$ 257,929||$ 413,351||$ 625,809|
|Interest Expense||$ 7,600||$ 7,600||$ 7,600||$ 7,600||$ 7,600|
|PRETAX INCOME||$ 53,280||$ 137,010||$ 250,329||$ 405,751||$ 618,209|
|Taxable Income||$ 53,280||$ 137,010||$ 250,329||$ 405,751||$ 618,209|
|Income Tax Expense||$ 18,700||$ 47,900||$ 87,600||$ 142,000||$ 216,400|
|NET INCOME||$ 34,580||$ 89,110||$ 162,729||$ 263,751||$ 401,809|
|Net Profit Margin (%)||10%||20%||27%||32%||37%|
Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:
- Assets: All of the things you own (including cash).
- Liabilities: This is what you owe against your company’s assets, such as accounts payable or loans.
- Equity: The worth of your business after all liabilities and assets are totaled and deducted from each other.
Sample Balance Sheet for a Startup Staffing Agency
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Cash||$ 105,342||$ 188,252||$ 340,881||$ 597,431||$ 869,278|
|Other Current Assets||$ 41,600||$ 55,800||$ 74,800||$ 90,200||$ 121,000|
|Total Current Assets||$ 146,942||$ 244,052||$ 415,681||$ 687,631||$ 990,278|
|Fixed Assets||$ 25,000||$ 25,000||$ 25,000||$ 25,000||$ 25,000|
|Accum Depreciation||$ 5,200||$ 10,400||$ 15,600||$ 20,800||$ 25,000|
|Net fixed assets||$ 19,800||$ 14,600||$ 9,400||$ 4,200||$ 0|
|TOTAL ASSETS||$ 166,742||$ 258,652||$ 425,081||$ 691,831||$ 990,278|
|LIABILITIES & EQUITY|
|Current Liabilities||$ 23,300||$ 26,100||$ 29,800||$ 32,800||$ 38,300|
|Debt outstanding||$ 108,862||$ 108,862||$ 108,862||$ 108,862||$ 0|
|Total Liabilities||$ 132,162||$ 134,962||$ 138,662||$ 141,662||$ 38,300|
|Share Capital||$ 0||$ 0||$ 0||$ 0||$ 0|
|Retained earnings||$ 34,580||$ 123,690||$ 286,419||$ 550,170||$ 951,978|
|Total Equity||$ 34,580||$ 123,690||$ 286,419||$ 550,170||$ 951,978|
|TOTAL LIABILITIES & EQUITY||$ 166,742||$ 258,652||$ 425,081||$ 691,831||$ 990,278|
Cash Flow Statement
Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from operations, investments, and financing.
Below is a sample of a projected cash flow statement for a startup staffing agency business.
Sample Cash Flow Statement for a Startup Staffing Agency
|Year 1||Year 2||Year 3||Year 4||Year 5|
|CASH FLOW FROM OPERATIONS|
|Net Income (Loss)||$ 34,580||$ 89,110||$ 162,729||$ 263,751||$ 401,809|
|Change in Working Capital||$ (18,300)||$ (11,400)||$ (15,300)||$ (12,400)||$ (25,300)|
|Plus Depreciation||$ 5,200||$ 5,200||$ 5,200||$ 5,200||$ 4,200|
|Net Cash Flow from Operations||$ 21,480||$ 82,910||$ 152,629||$ 256,551||$ 380,709|
|CASH FLOW FROM INVESTMENTS|
|Fixed Assets||$ (25,000)||$ 0||$ 0||$ 0||$ 0|
|Net Cash Flow from Investments||$ (25,000)||$ 0||$ 0||$ 0||$ 0|
|CASH FLOW FROM FINANCING|
|Cash from Equity||$ 0||$ 0||$ 0||$ 0||$ 0|
|Cash from Debt financing||$ 108,862||$ 0||$ 0||$ 0||$ (108,862)|
|Net Cash Flow from Financing||$ 108,862||$ 0||$ 0||$ 0||$ (108,862)|
|Net Cash Flow||$ 105,342||$ 82,910||$ 152,629||$ 256,551||$ 271,847|
|Cash at Beginning of Period||$ 0||$ 105,342||$ 188,252||$ 340,881||$ 597,431|
|Cash at End of Period||$ 105,342||$ 188,252||$ 340,881||$ 597,431||$ 869,278|
You will also want to include an appendix section which will include:
- Your complete financial projections
- A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
- Any other documentation which supports what you included in the body of your business plan.
Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your staffing agency company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.
A well-written staffing agency business plan is a valuable tool for any new business owner. It not only outlines your company’s vision but also provides a step-by-step process of how you are going to accomplish it. If you can demonstrate that your staffing agency business is well-thought-out and has a realistic plan for growth, it may entice investors.