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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!!!
Business Start-Up Fact Finder Manual
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