Four Reasons Starting a Staffing Business Makes Sense Right Now

With the economy trudging along at a snail’s pace, it would seem counterintuitive to suggest that now is the right time to start any business, right? Well, no. The economy isn’t a monolith that moves everything along at the same rate. Some sectors—such as real estate—still look a little grim and some—such as automobiles—not so much. The climate may not be as forgiving as in the boom years, but there’s no need to duck and cover if you can find the right niche. In fact, some businesses are perfect for this economy. That’s why starting a staffing business makes as much sense now as ever—maybe more. Here’s why:

1. Staffing is a proven market.

So many entrepreneurs think they need to invent the Next Big Thing. That’s rarely a successful endeavor. In most cases, the Next Big Thing doesn’t exist—because it’s not that valuable. Staffing is a proven business model that doesn’t rely on creating something entirely new. Rather, it taps into a need that already exists and is—in fact—growing. In an economy in which employers are reticent to staff up with permanent full-time employees, using a staffing company to secure temporary help is becoming a more popular solution. The employment services industry in the U.S. has grown from 3.5 million jobs in 2004 to a projection of 5.1 million by 2014.

2. The staffing business has a clear, simple value proposition.

It’s so important to be able to clearly communicate how your company creates value for a customer in a concise way. If you can’t summarize your business model in a three-sentence elevator pitch, it’s probably too complex. Staffing is as simple as it gets: You supply businesses with the flexible human resource solutions they need to stay profitable in a fluctuating marketplace. In return, you’re reasonably compensated by the employers for the workers’ time. The more successful workers you place, the more you earn. Like we said: simple. 

3. The staffing business has a revenue and profit model that will create cash flow to fund growth and create a return for investors.

This a basic business principle, but it’s surprising how many start-ups actively look for funding with no clear view of how to create a return for investors or eventually fund growth from cash flow. Not only does the staffing business not require much start-up funding (the capital expenditures are minimal), but your inventory—workers’ time and efforts—costs virtually nothing and yields substantial cash flow every minute it’s in use. It’s not difficult to see how starting a staffing business can pay back an initial investment quickly.

4. It’s clear how to invest in and improve a staffing business over time.

Investing in marketing, building on successful client relationships, growing your inventory of reliable workers, entering new niches—there’s no secret about how to grow a successful staffing business. As long as employers need flexible staffing, growing a staffing business will be within the capabilities of a serious and seasoned businessperson.