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How to start your own million- dollar temporary hel
HOW TO START YOUR OWN MILLION DOLLAR TEMPORARY HELP SERVICE
This is a service business with excellent growth potential,
indications of strong stability, a nationwide market with a growing
demand and a risk factor that's rated average or less than most new
business ideas. Temporary Help Services are well suited to absentee
ownership situations; require no experience or technical knowledge
on the part of the entrepreneur; and have only minimal equipment
needs. Net profits before taxes for some established temporary help
services have been reported as high as $500,000 per year.
There's a difference between regular, private employment agencies
and a temporary help service. The employment agency is a
"brokerage" office that matches unemployed persons with available
jobs. The temporary help service hires people onto its own payroll,
sends them out on contract jobs, and pays them accordingly.
Temporary help services make money "off the top." They send out
temporary workers on one-or-two-day-only jobs paying $10+ an hour to
the worker, and collecting $15+ an hour for the time the worker
spends on the assignment. More and more, businesses are willing to
pay the premium costs for a trained person for just a few days at a
time, than to accept the burden of a 40-hours per week payroll
obligation and the task of finding enough work to keep such a person
busy enough to justify a full-time salary and the attendant support
costs. Businesses everywhere are finding it easier to pay more for
"temporaries" than hired 40-hours per week "permanents." That's the
secret of success with this kind of business, and the point to keep
in mind when selling your services.
The successful temporary help service recruits as many skilled and
qualified workers as possible. These workers differ from the
regular job-seekers in that they're looking for "temporary" work
only. For any number of reasons, they're only willing to work on
jobs lasting from one to five days, or perhaps two to three weeks,
on any one job assignment.
These persons are ideal for the employers needing help but not
wanting to hire and train full-time employees. Your task will be to
find and attract top people and to maintain complete files on them.
What kind of jobs they specialize in, their attitudes about work,
and when or how often they're willing to work would be essential
information to have in our file. Each person should be tested in
your office, sent out on a few assignments to build a favorable
reputation as a good worker, and then offered a permanent listing on
your roster of available specialists.
Work hard to build your roster of available workers. Within ninety
days of start-up, you want to be able to send someone out to fill
any employer's needs, regardless of the job requirements. Job
assignments will range from loading dock and light clerical work to
word processing and even master-of-ceremonies work.
Depending on the size of your market, you could conceivably
specialize in temporary help for data-processing, the medical or
legal professions, or perhaps the retail trade; and you'd still make
a lot of money. Generally though, we are going to show you here how
to start a "full-service" temporary help agency.
You'll need a good mix of employers in your area for best chances of
real success. Your area can be one of high unemployment or one with
relatively few unemployed. Whichever the case, the thinking of the
business community and the work force available should be
non-traditional; there should be an undercurrent of thought toward
the idea of calling in specialists to handle a job quicker, and more
efficiently, than the full-time worker.
The people wanting to affiliate with you as workers will be
housewives, college students, retired people and a large number of
people who like to work, but don't want to be tied down to a regular
job. When you explain the concept of your service, you'll be
pleasantly surprised at the number of traditionalists you'll convert
to temporary workers.
First, you should visit your local Chamber of Commerce office.
Explain the philosophy of your service, meet the chamber officers
and ask for their help. You'll find that they have a listing of all
the major businesses in the area, plus the names of the "right"
people to talk to in selling your service. If you request, you
might be invited to Chamber meetings and be introduced to the
business leaders in your community. The only kind of information it
is not likely they will be able to help you with is a listing of
doctors, lawyers and small, home-based, one-person enterprises.
However, don't neglect contacting these people; they have a need for
varied specialized help just as the larger, more widely known firms
in your community.
You can locate your offices just about anywhere. You'll find,
however, that your greatest success will come if you locate in a
modern office building housing professionals such as lawyers,
accountants, investment counselors, insurance company offices, etc.
Project a professional image. Locate in a downtown or business
section of your town when you are able to do so.
Basically, you'll need 600 to 700 square feet of office space. You
should have a reception area, two offices and a room to store
supplies. The more prestigious your business address and office,
the better caliber clientele you'll attract. People looking for
temporary work, and employers considering using your services, will
doubt your abilities if they aren't favorably impressed with your
image.
It is possible to start this business in your home, but make sure
you have the space for a reception area, and at least a semi-private
interview area. Most of your selling efforts will be conducted by
mail, phone and personal visits to the employer's place of business,
so you won't have any problem there. However, you may run into
zoning problems if your city zoning people discover a large number
of cars parked at your house every day. It certainly always helps to
be on good terms with your neighbors, and further, working by
appointment will help keep traffic under control.
So, practically speaking, starting your business from home will
require a much smaller initial investment. In this particular
business, rent and advertising will be your largest expense, so
beginning the business from your home is definitely worth
considering if your start-up funds are limited.
In actual operation, you could have the applicants interested in
your services contact you by phone. You would then set up
appointments either in their homes or your own, thereby eliminating
congestion of cars in front of your home, as mentioned above. If
you began on a part-time basis, you could have a family member or
friend answer your phone and set up appointments for you. If you do
begin part-time, and working out of your home, you might look into
the advantages of a professional telephone answering service.
Another idea for saving on costs might be to rent unused space from
a business already established. These businesses might be sales and
distribution offices, suburban insurance agencies, quick print or
copy shops, and repair service shops. Look around; many businesses
have had to take what was available at the time, and would be more
than happy to lease or share their vacant space. Keep in mind
though, that you'll do much better with an office of your own, and
you should move into one just as soon as you can afford one. Proper
facilities that convey a professional image should be number one on
your list of priorities.
Your business image is projected by your address and the appearance
of the building in which you locate. Your reception area will set
the mood of professionalism and efficiency. The reception area
should be inviting - walls painted in light pastel colors, wall
prints, floor lamps and wall-to-wall carpeting. It should also feel
comfortable while being functional. Comfortable modern chairs and
sofa; perhaps a floor planter or two, reception desk and ash trays
all help to achieve this effect.
The main office need have only a desk and a comfortable chair,
facing the door, a chair beside or in front of the desk, and a file
cabinet. A print or two on the walls, and perhaps a bookcase are
the only "extras" you might use to dress up your office.
Your second office equipment will be for testing your applicants.
You can inexpensively build a table along the length of two walls,
partition into cubicles and have an electric typewriter, an adding
machine and make a headset connected to a dictaphone/recorder, and
another set up for testing short hand capabilities. Later on,
you'll probably want to have a word processor and a computer.
Ideally, you should also have a sales office and a storage room.
The sales office will be where you greet and talk with employers who
drop in to look you over to find out more about your business.
Mainly, this office will be where your people will work from when
calling prospective clients and selling your services by phone. The
storage room needs only shelves to hold various forms, mailing
pieces, envelopes and business records.
One way to hold your start-up costs to a minimum is by leasing your
office furnishings and equipment. Whatever you do, remember that
you're projecting an image, so don't settle for less than the best.
This is absolutely imperative in regard to any equipment used for
testing your applicants. You might be able to work out an
arrangement with the business department of a local college, or
business school, to send your applicants to them for testing on
their machines. Such an arrangement, even at a cost of $5 to $10
per test, could save you several thousand dollars in start-up costs.
The first person you hire should be either an experienced manager or
someone you can quickly train to assume those duties. It's best to
hold out for a person with at least one year experience as a bona
fide personnel manager. This person should be outgoing,
detail-minded, people-oriented and able to work well under pressure
without losing his sense of humor. You don't want someone likely to
blow his cool when confronted with a difficult situation.
Your manager will be responsible for organizing the interview and
testing systems, for setting up your sales solicitation program, and
for supervising the temporary workers, as well as your office staff.
It's a highly responsible and demanding position, so don't be
reluctant to spend the money necessary to get the best. You will
need to research to determine what salary such a top manager
receives in your area.
The next member of your staff should be an enthusiastic, hustling
sales person. This employee should be experienced and adept at
selling by phone as well as in person. Unless you can afford to pay
a good direct mail advertising copywriter to create your mailing
pieces for you, it would be wise to look for direct mail advertising
or copyrighting experience in the background of the sales person you
expect to hire.
Your sales person should spend the mornings calling prospective
employers on the phone, and the afternoons making in person sales
calls. With this kind of work routine in mind, look for sales
people with high ambition and energy levels. Try to pick the kind
who will come in early and stay late to work on his direct mail
efforts, clearing the decks so that he uses his time during regular
business hours to close sales by phone and in person. You need and
want a "closer" - not an order taker. Be as selective as you have
to be in choosing this salesperson.
In addition to the going rate which a sales person of this type
should be paid, you should also consider paying a 5 percent bonus
for each new account brought in. When you find the right person, it
will be worth it, so make it worthwhile to join your staff. Not all
sales people will necessarily develop into good sales managers, so
try to find one who fits all your requirements. The sales manager
would recruit, organize, develop, motivate and supervise your sales
staff. With those responsibilities, you'd want to offer a salary
plus override on the sales production of his staff of sales people.
You'll need an efficient and foolproof bookkeeping system to keep
track of your payroll, client billing, income taxes, FICA, workman's
comp, work schedule, hours worked and all the money that comes in.
For this chore, I suggest that you contract with a company that
handles this type of work for a number of independent small
businesses. Explain to them everything you think you need; ask them
to set up a system, and then instruct your receptionist on how to
keep it up to date on a weekly or monthly basis.
You'll save money in the long run if you will consult with an
accounting firm and have them set up a system that not only works,
but can be interpreted and computerized from the beginning. Later
on, you may want or need to hire a full-time bookkeeper just to keep
up with the daily entries. If so, check out salaries paid in your
area for that kind of work.
The last member of your staff will be your receptionist. This
person should be a lady of better than average good looks, a lot of
empathy for people in general, and an easy smile. She should dress
stylishly, but not provocatively. When she isn't answering the
phone or greeting customers, she can be administering tests, doing
miscellaneous typing, making folders for the records of your
workers, and general office filing. And if you have an accounting
system set up, she could also assist with the daily bookkeeping.
The kind of temporary workers you'll want to attract will fit into
several general categories, and can be recruited in a number of
different ways. Good places to look first will be in the business,
secretarial and technical schools in your area, and perhaps also the
colleges. To sustain your efforts, have a brochure about your
company made up, and make sure the placement directors or counselors
always have an ample supply on hand. Many schools stage "career
days," when employers are invited to set up booths on campus and
talk to the students, pass out literature, and invite the students
to visit their companies. Make sure that you know about these, and
that your firm is represented.
Another group will be housewives who perhaps held regular jobs
before marriage or the birth of a baby, and now want to get back
into the job market. You can bring these people in by posting
bulletin board notices, arranging announcements at meetings, or with
guest speaking engagements. And of course you can try for guest
appearances on local radio or television talk shows.
Another group to recruit will be the "bored with life" people. These
are in the 45-to-55 age group, not satisfied with the future where
they are, and looking for a better opportunity. It is imperative
that you begin recruiting and signing workers as soon as possible;
at least a month before you open for business is not too early.
According to industry surveys, the most common reason for the
failure of temporary help services is not enough workers lined up to
fill the client demand. When you get a request for help, you should
be able to send out a qualified person.
Each market area differs in the number of different types of workers
a temporary help service should have available, but in every case,
it's best to have more than you figure to be a basic need. You must
establish a maximum number of people within any one occupational
field that you'll sign up, or else you won't be able to keep
everyone busy. Unless you keep the workers you have registered
working pretty much as often as they want to work, you'll begin to
lose them.
It's not hard to determine when a person is losing interest in
temporary job assignments through your firm. Whenever you call to
give an assignment and you can't reach the person you're calling,
try several follow-up calls. It should become obvious to you that
he+s no longer interested if you still can't reach him with your
follow-up calls. It's a good practice to ask for notification of
vacation or other plans that will affect their availability for
work.
If you call and a job assignment is refused with a lame excuse, come
right to the point and ask if he wants to change his availability
status, or if you should drop him from your list of available
temporary workers altogether. Never coddle a temporary worker. If
he's not available when you call to give an assignment, or he gives
you a less than valid excuse for not accepting, flag his "call
assignment" card and move on to your next available worker. You
might call a couple of days later to check his availability and
interest in continuing to work, but don't waste too much time. You
can always reinstate such a worker, but it is probably better to
spend the time recruiting a replacement.
As mentioned earlier, one of your major expenses will be for
advertising. Your manager and sales people should keep you advised
on your current advertising impact and results, and from this you
should have a good understanding of how to use your advertising
budget most effectively. Your advertising should be
"double-barreled," aimed at both the employer and the worker.
Generally, your efforts to add new employers to your client list
should focus on direct mail. Advertising efforts to recruit new
temporary workers should be almost exclusively devoted to
newspapers. Years ago, some radio stations sold sixty-second
commercials to a few temporary help agencies. The agencies talked
to prospective employers, playing up the fact that they had skilled
workers to handle overload and deadline situations. These
commercials were broadcast in the mornings before 8 o'clock. Then
they followed up during the afternoon hours with commercials
inviting people seeking temporary help to come in and sign up.
Everything worked well except that not enough prospective employ ers
called often enough to justify the expense. This advertising method
is being followed on a small scale in some areas even now, so watch
for it.
For really professional results, you should get a free-lance
advertising copywriter to do your direct mail piece. This should be
a 4-page brochure making these points:
1. All employers have sudden work overloads; face deadline situations;
or are suddenly left with a mountain of work for specially trained
employees just when they are home sick, on vacation, or off for an
emergency.
2. Your company understands these work load problems, and has available
skilled professional replacement workers who can quickly step in and
get the job done.
3. Your company thoroughly tests each of the specialists hired for
these special staffing crisis situations, and can assure the
employer that they are tops in their individual areas of expertise.
4. Your company is well aware that many businesses would like to save
the expense and headaches of hiring a full-time specialist of the
same caliber of your people on a "temporary" or "on-call" basis.
Your people cannot be hired by the prospective employer because they
already work for you; but if and when a temporary worker is needed,
your company stands ready to fill the need, regardless of the job
specialty required.
5. Even if he doesn't need one of your people today, the need could
arise at any time, and suddenly. So he should just keep the
brochure and your telephone number handy, and don't hesitate to call
you personally for whatever temporary help is needed.
Once you have the copy written, decide on the layout and type style
you want to use; if and what color will be used; and take it to a
quality printer. Your brochure should be printed on 60-pound coated
paper, and folded to suit your needs by the printer.
Your complete mailing should consist of a short cover letter
inviting the recipient to avail himself of your services; a brochure
explaining your services in greater detail; postage paid business
reply card. The mailing envelope and the cover letter should be
addressed to each business owner or personnel manager by name.
Pay the cost of a bulk rate third class postage permit; have your
permit indicia imprinted on your mailing envelopes; and organize
your mailings to get between 200 and 500 letters into the mail three
days a week, every single week. Don't skimp on your direct mail
advertising efforts, because this will be the lifeblood of your
success.
Your newspaper ads for qualified workers looking for temporary
assignments should be display ads in the "Help Wanted" section. Most
such ads are one column wide by 3 to 6 inches deep. Be sure you
have an ad running in the Sunday paper, and at least one more on
Wednesday or Thursday. Before you even start soliciting accounts,
you could run an ad one column by 6 inches deep every day for a
month.
These ads should invite the readers to come in and register with
your company. Work with your free-lance copywriter to say what you
want to say. Overall, though, these ads should explain that you
have plenty of jobs going begging; that the worker sets his own days
to work, and can take jobs as often or as seldom as he likes.
Stress the real advantage of "paychecks on your terms" - an
impossibility with a nine-to-five job. (There are reports of
employed persons coming in to interview, going back and quitting
regular jobs, and becoming great "temporaries.")
Don't forget to send out news releases to all the media in your area
when you open for business. Leave yourself open for broadcast talk
show interviews, and when you promote someone, pass special
mile-stones, or become involved in unusual stories in connection
with your business, at least telephone the media and give them this
information.
The most important requisite for success, however, is consistent
advertising. In a city of 100,000 population, you should budget
$10,000 for your first year advertising. Plus, get involved in as
many promotions and as much public relations contact and publicity
coverage as possible. Once you're beyond the "break-even" point in
your business, you will allocate funds for advertising based on your
gross income.
In day-to-day operations, your manager will interview applicants; do
testing; talk with clients; solve problems; take orders from
employers; and make job assignments. Usually, his busiest time will
be right after lunch when job orders start to come in. With this in
mind, you might want to arrange for him to take an early lunch
period.
While your manager is "running the show" your sales person will be
making telephone calls in the mornings, and in person during the
afternoons. It's a very good idea to send out your direct mail
advertising one week, and then call on these same people, either by
phone or in person, the next week. Remember that your sales calls
should be relaxed visits, allowing the prospect to learn more of
your business and the kinds of people you have available. During
each sales call, the prospect should be left with the feeling that
your company can save him money, solve a lot of production and
scheduling problems, and take the exasperation out of his personnel
requirements.
As a rule, you'll find that most jobs are called in during the
afternoon hours. With this in mind, it would be wise to have set
procedure for your specialists to call you each afternoon to let you
know where they can be reached through 5:00 p.m. if they are
available for a job assignment the next day. You might want to set
a policy of "No call from you - No assignment for you."
Most temporary help agencies give their workers a supply of a 3-part
time card when they're hired by the agency. When the request for a
worker comes in, the most qualified in the required category is
called. Job, name of company, location, approximate length of job,
and salary are all explained. If they agree to take the offer, they
fill in the time card for the day the work begins. When they report
for work, they have the time card signed by the employer to verify
starting time, and finishing time. One copy of the time card stays
with the employer; the temporary worker keeps a copy; and the other
copy is mailed to your office. Smooth and simple, but make sure
you've got everything worked out before you begin.
Your bookkeeper notes the proper information on the ledger for that
employee, files the time card, and sends a ledger duplicate to
accounting for billing. Of course a reminder call should be made
first, but as a rule, any account that hasn't paid within thirty
days should receive a personal visit. As to the hard-core
delinquent account, no more employees furnished, and a collection
agency to clear up the account will be your policy. You may want to
look into the advantages of selling your accounts receivable to a
factoring company.
Unlike the brokerage type employment agencies, your temporary help
agency will not require licenses other than those required by any
other business in your area. You should, however, bond each of your
employees in order to protect yourself from any possible liability
or other legal entanglements. And of course you'll need to carry a
standard business insurance policy.
That's it, then - the HOW, WHAT, WHY and WHERE - of getting started
with your own profitable temporary help service! Remember, it takes
solid and consistent advertising, earnest recruiting, and selling.
So don't stop or let up until you have everyone in your area
registered, and every possible employer as a client, aware of your
business. It's a big job with lots of challenging work involved,
and you'll need good people to help. It is worthwhile to search out
these people with care, to be sure you have good, reliable employees
- the rewards will be well worth it! Organize your business for
success, and get with it. The WHEN is NOW!!!
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