Every good businessperson will tell you they “have a plan”. Sometimes it’s on paper, occasionally its formalized into a working document, but more often than not, it’s in their head. The problem with anything less than a formalized document is that the plan tends to get lost in the day-to-day demands of managing operations. Then a year passes, and we wonder why things haven’t progressed as we had hoped. Sound familiar? The bottom line is that a focused business plan can be a crucial document for your staffing agency, whether the business is a startup or is already established. It helps define your business priorities and creates a way forward to achieve your goals.
A good staffing agency business plan should lay out the long-term milestones that are most important to the success of your business and help track progress towards goals and objectives.
Let’s take a closer look at the benefits of having a business plan and then discuss how to develop an effective plan to guide your business decisions and keep your staffing agency on track.
Business plans help steer your staffing business
An effective staffing agency business plan will help you steer your business as it grows. Going through the exercise of building the business plan should help you in the following areas:
- Establishing clear business goals and objectives
- Bringing greater clarity to your competitive environment
- Helping you better define and understand your audiences
- Reduce the risk of pursuing misaligned opportunities
- Defining marketing strategies
- Crystalizing your recruiting and retention strategies
- Brining clarity to your desired public brand
- Refining your management structure to oversee advancement towards goals and objectives
- Establishing timelines to meet goals and objectives
- Establishing your metrics to measure progress
Two big benefits of a business plan for your staffing agency
Separate studies confirm the two biggest benefits of having a business plan for your staffing firm:
1.) Improved Business Performance – The first study, published in 2010, looked at the growth of more than 11,000 companies and discovered that planning did indeed improve business performance.
2.) 30% Faster Growth – The second study revealed that businesses that create a plan grow 30 percent faster than businesses that do not have a formalized plan.
These studies also uncovered that startup businesses typically have shorter, less detailed plans. Younger companies are often still learning about their customers, with some companies fine-tuning service offerings. The size of the business plan didn’t matter as much as the quality of the information contained.
If you don’t currently have a staffing agency business plan, start with the basics. Skip the 50-page business plan template. Focus on the essential parts of your staffing agency and create the first version of your business plan that covers the essentials. You can always grow your business plan to 50+ pages over time (if you really want to!). To start, get your vision on paper, then challenge and clarify your intent. At this stage, you can begin using it as a working guide that you can refine and add details to over time.
Securing the money needed to grow your staffing agency
While improving company performance and faster growth are two significant benefits of creating a staffing agency business plan, another major benefit is using the plan to obtain financing.
New staffing companies typically boot strap their start-up costs with their own savings or money from friends and family. As a company grows and takes on more clients, the need for additional working capital arises, leading firms to look for other sources of funding such as a line of credit with a bank.
If you choose to pursue traditional forms of financing, lenders and investors will want evidence of financial viability showing how your staffing agency will attract customers and be profitable in the future. The best way to summarize this information is by presenting your business plan.
Plan to consider all of your funding options
While a sound business plan can help secure traditional funding support, developing your business plan should also include a thorough review of your funding options. This review will help ensure that your route to success is anchored in sound financial principles.
For example, alternative lenders specializing in financing staffing agencies often offer payroll funding, a mainstream financial strategy to support operations and fuel growth. These highly flexible funding solutions provide fast, reliable funding you can count on to meet each and every payroll burden. Qualification is fast, simple, and easy. Approvals are based not on your company’s history or performance but on your customers’ credit strength. As a result, considering the impacts of this approach in your planning process may be one of the most valuable outcomes of the exercise.
How to write your staffing agency business plan
There are many approaches to staffing agency business planning, but they all essentially focus on common components. To expedite your process, consider crafting your business plan with the help of a template, such as this one from HubSpot. Following are the major components of an effective business plan, along with tips on how to write each section:
Cover and Table of Contents – Over time, your business plan may be shared with a range of professionals, so be sure the plan itself is professional, starting with the cover and table of contents. Make it easy for prospective investors and lenders to navigate your plan. Double-check that your table of contents contains valid and accurate hyperlinks if provided electronically.
How to design:
Consider hiring a graphic design firm to create a logo if you don’t have one and include special typography to give your cover a unique look. While you don’t want it to look cluttered with too many images and graphics, having a polished look with strategic graphic elements will convey high professionalism.
Executive Summary – Don’t make lenders and investors search for important information. An executive summary should be no longer than one page and highlight the main points of your plan.
How to write:
A one-page document can contain between 300 to 500 words. This is the word count you’ll want to aim for when writing your executive summary. Consider creating several paragraphs to make the information easy to read and include bullet lists where applicable.
Company Description – Include your mission statement, company principles or core values, a list of your ownership and or executive team, and your corporate structure.
How to write:
Consider using a table format for your ownership and executive team, so the information is easy to follow.
Market Analysis – This section is not a complete marketing plan. Instead, it is a competitive analysis of your market with a detailed plan on how you propose to capture a portion of this market. It should explain existing gaps in the market that your business will fill and what differentiates your business from your competitors. Also, this analysis should be based on reputable sources. Consider hiring an outside company to conduct this analysis and be sure to cite them in your report.
How to write:
Explain who your ideal client is, their pain points, and how you can solve them as a staffing agency. And most importantly, articulate the reasons you are a better alternative than the competition. You’ll need to describe each competitor in your niche or geographic area and summarize their strengths and weaknesses.
Organization and Management – This section explains your business’s management structure and often includes an organizational chart and salary forecasts. A management section is usually unnecessary if your staffing firm is small and only has principals involved with the day-to-day operations.
How to write:
Include a short narrative detailing your management structure to complement an organizational chart. It should highlight how/why this structure supports your goals and objectives.
Services – Include detailed features and benefits about your firm’s services. While this may seem a bit obvious, taking the time to reflect on what you do and how you do it during the planning process may be invaluable. This exercise should reveal key insights into where and how you fit in the market and what you need to prioritize to stand out from the crowd.
How to write:
Explain how your staffing agency’s services save your clients time and money. Describe how your company sources and qualifies candidates for open positions. Follow this by detailing how you take care of the paperwork associated with new hires, such as contracts, taxes, and other payroll tasks. Then explain how your company generates revenue. For example: “We charge 25% to 100% of a hired employee’s wages. For an employee with a markup of 25% who earns $20 per hour, our clients will pay us $25 per hour for that employee’s work.”
Marketing and Sales – This section should answer three essential questions:
1.) How will customers find out about your services?
2.) What will be your marketing and advertising channels?
3.) What is your growth strategy?
How to write:
Compose a narrative detailing why potential buyers will be interested in your staffing agency’s services. Then explain your primary customer acquisition channels, such as blogging, pay-per-click advertising, or word-of-mouth advertising and networking efforts. Next, outline how you will engage with new leads and whether you’ll pursue an inbound or outbound sales strategy or a hybrid of both. Lastly, write out the team members responsible for selling your services. Explain how sales and marketing will be working together.
Financial Analysis – This is the key section for lenders, investors, and for business valuations. The financial analysis should include projections for three to five years. If you have been in business for a while, include historical results for the past three to five years. At a minimum, this section should include the three primary financial statements:
- Balance sheet
- Income statement
- Statement of cash flows
Lenders and investors may also ask for more detailed financial reports such as sales forecasts, cost of sales, or cost per service.
How to write:
Include both narratives and tables to showcase financial information. A narrative could read like this: “Staffing Agency ABC is requesting funding of $250,000 of debt capital to expand its agency. The capital will be used for capital expenditures and office build-out, salaries, marketing expenses, and working capital.” Be sure to highlight any key assumptions used in your analysis.
Appendixes – While the main plan should clearly describe your way forward, much of the content may raise questions and require additional support. Rather than bog down the plan with this detail, include appendixes. They should consist of items such as the resumes of principals, relevant legal documents, including the structure of your business, and financial statements.
How to write:
Appendixes can sometimes grow to be larger than the business plan itself. Be sure to organize your appendix in a way that is easy to follow so the reader can find specific documents.
A staffing agency business plan can help you strengthen the performance of your operations, whether you operate a startup or an established staffing agency. It can also help staffing firms grow faster than competitors who do not have a business plan. Companies also rely on business plans to help secure debt-based and equity-based financing.
Business plans can become voluminous – it is suggested that startups begin with a short but thorough document. While your plan should have enough detail to guide your startup company’s direction, don’t get bogged down thinking you need an elaborate 50-page business plan before putting it into action.
Finally, find a user-friendly template for your staffing practice and start writing your business plan today!
eCapital’s roots are deeply grounded in the staffing industry. Since 2006 our organization has been structured on a foundation of industry knowledge. Our customer base continues to grow as eCapital’s reputation for reliable funding, dedicated service, and effective risk management endures.
Building relationships based on integrity and trust, we deliver easy to qualify for and easy-to-manage cash flow solutions you can count on. Strategic partnerships and collaboration with technology leaders bolster eCapital’s capability to extend the boundaries of flexible funding. Our staffing customers benefit with access to more funds faster and more conveniently than competing lenders can provide.
For more information about how payroll funding supports your staffing agency through changeable conditions, from economic uncertainty to business growth opportunities, visit eCapital.com