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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 $15 an hour to the worker, and
collecting $20 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, 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 employers 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. (We have had 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.
'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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