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How To Start Your Own Million Dollar Temporary
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
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
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
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
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
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
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
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.
Is 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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