How to Setup & Manage a Staffing Agency From Home

By Timerack

December 14, 2021

The pandemic has brought about many changes, some of which look to be here for good. The shift to remote work is one of them, which is good news for small startups that previously struggled to compete with the big fish. For anyone thinking of starting up a staffing agency from home, this could be your moment. Now more than ever, it’s quality rather than quantity that clients are looking for in a job agency. Something that a small recruiting firm can truly excel at.

But where should you start? What areas should you focus on? This is what we’ll be answering in this guide on how to start a staffing agency from home. 

1. Decide on a business structure

First off, you need to thoroughly research the requirements of running a temp agency in your locality. State laws vary, and not all states allow a primary residence to be used for running a business. For condominium and cooperative owners, there may also be restrictions against running certain businesses in your home. Check and double-check that there aren’t any restrictions or flat prohibitions against running a temp agency in your home.

Next, you’ll need to decide on the business structure. Are you going for a sole proprietorship, a limited liability company, or a corporation? Since you may be on the chopping block for any damages caused by your employees, you’ll want to reduce your personal liability as much as possible. Therefore, going with an LLC or a corporation is by far the safest choice. Schedule a consultation with a local business attorney to ensure you get this right. 

2. Setup a home office

Working from home comes with a unique set of benefits and challenges. While it’s great that you can skip out on the overhead costs of renting office space, you do still need to invest a little in getting your home office set up for the road ahead. Designate a small area in your home (preferably a spare bedroom) to use as a home office. You’ll need to carry out online interviews of candidates so invest in a good quality microphone, webcam, and internet connection. It’s also a good idea to spruce up your background so that it looks inviting and professional. A good quality desk and office chair are also worthwhile expenses. 

3. Sort out the legal side of things

Every new business will have a few legal things to sort out before they can get down to brass tacks. Your specific requirements will vary based on location, so find out what you need to do. Start with deciding on a good business name, one that’s catchy and easy to remember. Make sure it’s not already trademarked before you register it and purchase a domain name for your website.

After that, make a list of all the permits and licenses you’ll need to run your business. These typically include a state tax license, a local business permit, and an Employment Identification Number so you can deduct taxes from employee paychecks. You can apply for one of these online through the IRS. Don’t forget insurance either. At a minimum, this will include general liability insurance, professional liability insurance, and worker’s compensation insurance. There may be others as well that are worth getting so do your due diligence. 

4. Conduct market research

Before you can start interviewing candidates and prospecting for clients, take some time to conduct market research. It will help immensely if you’re already experienced and familiar with the market niche that you’ll be focusing on. Clients like to know that the agency they’ll be working with has a firm understanding of the challenges and difficulties that they face. Knowing that will give you a major leg up on the competition.

Start compiling a list of potential clients that you could reach out to. Find out if there are any networking events or online groups that you can join. Get to know some of the people that work in your market niche so you can better understand current trends and challenges. Don’t forget about the competition either. Knowing the competition, what they’re offering, and how they’re finding clients is market research 101. This may lead to some important insights on how your agency can offer something unique that your competitors don’t. 

5. Create an impactful website

Once you’ve registered your business name and purchased a domain name, it’s time to get to work creating an impactful website. This will be the face of your business, so it needs to be pleasing to the eye and have a smooth user interface. Buggy websites that are not easy to use will scare away potential candidates and clients. Currently, many hosting companies provide the tools you need to build your own professional website from scratch, no coding experience required.

However, if you want to go the extra mile it might be worth hiring the services of an experienced web developer. Having your own web developer can be a huge help when you need to make changes or fix something that’s not working correctly. 

6. Get down to business

Every staffing agency relies on taking a twin-tier approach, you need to find clients that need temporary workers and workers who need temporary work. Since you’ll be working from home, your marketing and recruitment efforts will make or break your business. Therefore, having a robust recruiting system that can contact, vet, and assign candidates to the right jobs will more than pay for itself. Think about how you’re going to attract candidates to your agency rather than a competitor’s.

It’s the same with finding clients. What can you offer them that larger and more established staffing agencies can’t? if you don’t have a good answer to this then maybe you need to rethink your entire business plan. Determine a system for how you will contact clients, be it through cold-calling, email marketing, referrals, or good old-fashioned networking events. 

Final thoughts

Starting a staffing agency from home is a challenge for any entrepreneur. It won’t happen overnight, and things may seem a bit touch-and-go at times, but by doing your homework beforehand you can make that journey a lot easier.

Use technology to help you along the way. One of the biggest advantages that a new startup has over a more established agency is that they can more easily integrate new technology into their business. These days, there are a host of systems that can make the everyday running of your business a thousand times easier. Find out what those are and how you can get the most out of them.



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