What’s Required to Open a Staffing Agency [Checklist]


By Timerack

November 9, 2021

The effects of the pandemic have brought about far-reaching consequences in the labor market. More people than ever are leaving their old positions in search of something better in what is being dubbed the “Great Resignation.” For ambitious entrepreneurs, now might be a better time than ever to start a staffing agency.

But what are the requirements when opening a staffing Agency? In this article we’re going to talk you through the basics with this checklist guide to setting up a staffing agency.

1. Write up a business plan

Every new business needs a solid business plan that lays out the road ahead. Almost every failed business venture is a result of not having a well-thought-out plan. Start by laying out your business goals and how you will go about achieving them. It should detail all the main points on how your business will be structured, financed, marketed, and run. It needs to be clear enough that an external audience can easily understand its main points.

As you move forward with the planning phase of your venture, you will revisit and revise your business plan over time to ensure it stays up to date. Getting this right from the beginning will make the rest of the steps in this checklist much easier.  

2. Get your company name trademarked

Decide on a good name for your business. It should be easy to remember and stand out from the competition. Once you’ve checked that it’s not already in use by another company, get it trademarked and registered with your local authorities. Now is also a good time to purchase a domain name for your website. There’s no need to design a full website just yet, but it can be worthwhile to design a simple “Coming Soon” landing page through a free website builder. 

3. Apply for an Employee Identification Number (EIN)

All US-based businesses need an EIN for tax purposes. This can be easily done online for free through the IRS website and shouldn’t take more than 15-minutes. To apply, you must have a valid Taxpayer Identification Number (SSN, ITIN, EIN) and be the principal owner of the business entity. 

4. Secure funding

Every business needs funding to get started and there are many ways to go about this. You could seek a small business loan or grant, find private investors, or pool your personal savings with your co-founders. For those seeking a loan or private investment, you’ll need your business plan and a pitch deck that outlines your financial projections, opportunities, and growth strategies. You’ll also need a Corporate Director Agreement if any investors are becoming board members. 

5. Open a business bank account and apply for licensing

A business bank account will be needed to ensure all your expenses are accurately accounted for. For this, you’ll need your EIN, your business formation documents, ownership agreements, and your business licenses. Make a list of all the business licenses and permits you’ll need. These will vary based on your location and whether your business will be operated from your home or a commercial space. There will be federal, state, and local licenses that must each be applied for separately. Seek a consultation from a local business attorney to ensure you don’t miss anything. 

6. Get insured

Getting the right insurance is a step no business can afford to overlook. Your chosen policies should cover just about every possible eventuality you could run into. For instance, staffing agencies will certainly need general liability insurance, professional liability insurance, and worker’s compensation insurance. This is something a business attorney can also help you with. 

7. Determine your tax classification and tax payment structure

To stay in good legal standing, your business will need to meet its federal, state, and local tax obligations. These will vary based on both your location and business structure. Be sure to check with the IRS to see which taxes apply to you. The five general types of business taxes include income tax, self-employment tax, estimated tax, employers’ tax, and excise tax. 

8. Design a marketing plan and create your company website

You should already have a basic sense of how you will market your staffing agency from having written out your business plan. Now it’s time to expand on that and get into the finer details. A good marketing plan should outline:

  • Your agency’s current market position
  • How to get contracts for your recruitment agency
  • An overview of your goals with a timescale and strategy for reaching them
  • The key performance indicators (KPI) that you’ll be using to measure your progress
  • A description of your target market and how you intend to reach them
  • A list of your competitors
  • An executive summary that condenses your marketing plan into an easy-to-read format

Ancillary to this will be your company website, the public face of your agency. Devote some time and a section of your marketing budget towards designing the best company website possible. Aim for clarity and accessibility. A casual visitor should know within seconds what type of business you are, where you are located, and what sets you apart from the competition. Hiring a professional web designer for this step can be a worthwhile expense that will more than pay for itself in the long run.

9. Get the right tools

A modern business requires modern tools and technology. Begin evaluating the tools and providers that will save on time, money and streamline the day-to-day running of your business. For instance, a candidate tracking software and a book-keeping and payroll system. Anything that allows you to automate time-consuming processes should be considered. 

10. Begin sourcing and interviewing candidates

You’re in the business of providing temporary employees, so start lining up a pool of candidates that can be parceled out to your clients. By using some of the recruitment tools you’ve already picked out, you can make this step a breeze. Establish a clear system for sourcing, vetting, interviewing, and placing those candidates that you’ve chosen. 

11. Launch your business

With all the preliminary steps now completed, it’s time to launch your staffing agency. If you’ve done everything right so far you should have everything you need to start acquiring staffing contracts, placing your employees, and reaching for your business goals. Expect a few growing pains in the first few weeks and months that will have to be ironed out over time. This is normal for any new business. Ensure you’re allocating enough income to cover tax payments and continue revising your business plan as needed. 

Final thoughts

There you have it, your checklist for getting your staffing agency from zero to hero in only ten steps. Obviously, this is something you’ll want to return to and revise as time passes. Every staffing agency will have its own approach to how they run things and what they prioritize. But no staffing agency can afford to skip any of these crucial steps. 

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