There are many strategies for growing your staffing company – everything from diversifying and entering new markets to franchising and acquisitions. If your company is well positioned with the talent, knowledge, and resources to support it, specialization in a niche market is another effective strategy to consider.
Positioning your staffing company to serve a niche market builds brand trust, enhances customer loyalty, and strengthens your ability to dominate a sector of the market. Being a specialist provider makes networking and marketing both easier and more focused. Relationships with clients and employees alike are better when you speak the language. Costing becomes more efficient, and the expertise you develop becomes a valuable commodity that will positively impact your bottom line.
Staffing company owners looking to grow and succeed in a highly competitive industry need a competitive edge. Strategic decisions aimed at serving a niche market improve operational efficiencies, streamlines marketing, and lead to improved profitability. Leverage your expertise and stay focused by staying in your chosen lane.
Let’s take a closer look at the benefits and strategies for becoming a specialized staffing company.
The benefits of having a niche-focused business
Specialists are recognized as having expertise and more capabilities to offer their prospective clients. This recognition helps build more than a strong brand – it may also allow the staffing company to charge more.
Higher rates: You’ve undoubtedly noticed that everything from name-brand cola to cotton swabs costs more than you might pay for the generic brand. The same can be true in staffing. Companies will pay more if they know you’ll provide better candidates quickly. They are more willing to pay higher rates because of the expertise and quality of talent you bring to the table. When compared line by line with competing benefits such as lower hourly rates, expertise in the industry often becomes a determining factor for many clients, particularly those who are experienced in dealing with staffing companies.
There’s a certain level of comfort clients have when they know that, at the very least, they don’t need to explain what it is that they do. Both candidates and clients are easier to find when an agency owner is well networked and focused on their efforts. This makes it easier to describe and understand the opportunities in question, using the same language that clients are using.
Effective cost management: Specialists with experience in their respective fields will be more aware of market costs and hidden costs. Knowing those costs provides an edge over the competition as efficient cost management positively impacts rates and profits. This level of knowledge is essential to pricing, a skill which, over time, is a big part of what will determine how successful your business becomes.
In addition to better pricing for your business, having expertise will also make the discussion with your clients and would-be clients less about the rate and more about value.
Strategies for dominating a niche market
Develop your expertise
Industry experts are often forefront leaders or influential figures within a particular industry. Clients, potential clients, and candidates will look to your expertise to enhance their capabilities and better their position in the market.
Make a continual effort to acquire and further the experience, skills, and knowledge you need to become a recognized leader. Following are a few ideas:
Keep current: Read your industry’s trade publications and keep in touch with your industry’s news and trends. Be well-informed and on the cutting edge of these developments.
Get certifications: Certifications and credentials set staffing company owners apart from the generalists attempting to serve your field. Have the credentials to say with confidence that you are able to serve your chosen niche. In particular, explore credentials provided by your specific industry’s associations. Keep current on your credentials required for continuing education, if applicable.
Spread the news: Get out and spread the word if you want to be recognized as a specialty provider operating in a niche market:
- Become a member of whatever industry-specific associations there are to join.
- Go to industry trade shows and become a familiar face.
- Rent a booth and join the conference as an attendee.
- Show up for meetings and volunteer or apply for advisory groups, board, and executive-level positions.
- Aim, sooner than later, to be a presenter at industry events.
Make it known that you’ve been an owner or a specialist for years and share your niche-specific expertise. If you work to ensure that employees are licensed to work in the state or region, or industry in question, say so. Promote yourself in terms that are as specific as possible, focusing on the traits, skills, and credentials that set you apart from a generalist staffing agency owner.
Nurture your networks
In addition to attending your niche market associations, join staffing industry associations if you’re not already a member. This strengthens your overall credibility in the market. Top national staffing associations include:
- American Staffing Association
- Staffing Industry Analysts
- National Association of Personnel Services
- TechServe Alliance
Look for state and regional staffing associations to join, as well. Consider working to become a leader in the organizations you and your company are a part of. Determine how experts are selected and try to become a speaker at the next event. Get certifications – both short course certifications that can be obtained in a day, and those that are more extensive and sometimes required for larger companies and government contracts. Set achievable deadlines for accomplishing those goals.
As this personal and professional effort is underway, your networks will grow naturally.
Be clear about who you are, what you do, and who you serve
Becoming a familiar presence among your industry’s players and a resource to those who know you will build your reputation as a specialist. Be consistently clear about who you are, what you do, and who you serve.
Recognize your expertise and stick to your lane. Know who your customers are and be clear about what you offer them. Everything about running your business becomes more manageable with a clear view of who your ideal client is. For instance, word-of-mouth referrals are only effective when you’re clear about the value you bring to your customers. Your happy clients can’t describe your business to prospects if your company doesn’t have a clear message about the value and services you bring to the market.
Enhanced growth opportunities
Becoming a recognized specialty service provider will aid your strategic push for growth. Focused marketing messages and brand recognition will support organic growth, attract more and larger clients, and assist in recruiting higher qualified candidates. As your business matures, substantial growth becomes easier through acquisition strategies. The narrow business scope of a specialty service provider enhances the ability to identify acquisition opportunities and align synergies with competitors in the same market. If the acquisition is a good fit, your company benefits with increased market share, an expanded talent pool, and may gain improved technologies and additional expertise.
Temp Agency Funding
Growth equates to expansion, and expansion requires greater funding. To serve a larger client base effectively requires increased access to capital to cover payroll, taxes, and insurance. Rapid expansion, such as taking on a large client or acquiring a competitor business, will place tremendous stress on your company’s financial resources. This is where a flexible payroll funding solution comes into play to remove the barriers to growth.
An alternative lender specializing in temp agency funding is the ideal financial provider to partner with. Much like the way your services are specialized, you in turn will need a funding specialist who has expertise in staffing. An experienced alternative lender with deep roots in the staffing industry will provide more money, faster, and more control over your capital management with flexible payroll funding solutions.
Having easy access to working capital to ensure you always have the cash flow you can count on is essential – so too is market intelligence. Growth and expansion can be risky if not well researched, planned for, and executed. An experienced lender specializing in staffing will have the data and expertise to support your growth strategies. Running credit checks on new clients, sharing market trends and analysis, and supporting the due diligence process during acquisition negotiations are benefits of working with a specialized alternative lender.
The allure of expansion into another geography, niche, or industry is understandable, particularly in light of what happened to some staffing companies that served industries hard hit by the COVID-19 pandemic. If there is a down market in one industry, adding to your repertoire could be a backup plan against future downturns.
However, growth by expansion in this manner may expose your company to certain risks. Spreading yourself thin will dilute a focused approach to a defined market. The staffing company that chases every business opportunity in an attempt to serve a broad market risks spinning their wheels and wasting money. New hires and increased operational infrastructure, which were rapidly expanded to meet new business obligations, can drag the company down should market conditions change. A failed venture into new territory would involve downsizing months later when the business pulls back to its core capabilities. Worse, there is a lost opportunity cost, as the business could be that much further ahead had that same energy been invested in more focused development efforts.
In contrast, there are specific strengths gained by becoming a specialized staffing company, if you do it well. Focusing your strategic efforts to become a specialist in your niche can make your business easier to run and allow it to grow intelligently. Managing the business generally becomes more manageable. New business and acquisition opportunities will naturally appear as marketing efforts are more targeted and your brand as a specialist becomes more recognized.
Staying in your lane by tightly focusing on your chosen niche or geography increases your ability to attract and maintain qualified candidates and new business in your wheelhouse. Focus on your expertise – promote it and concentrate on becoming the go-to specialist in your field.
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 our reputation for reliable funding, dedicated service, and effective risk management endures.
Building relationships based on integrity and trust, we deliver easy-to-manage cash flow solutions you can count on every day. Strategic partnerships and collaboration with technology leaders bolster eCapital’s capability to extend the boundaries of flexible funding. Our staffing customers benefit from access to more funds, faster, and more convenience than competing lenders can provide.
For more information about how payroll funding supports your staffing company through changeable conditions, from economic uncertainty to business growth opportunities, visit eCapital.com