This is a service
business with excellent growth potential, in dictations 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-timeworker.
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 workload 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. The prospective employer
cannot hire your people 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" -
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 populations, 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!!!