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How to Start a Staffing Services Business

Start-Up Costs

The staffing industry has higher startup costs than do many other industries--for a couple of reasons. A home office isn't usually a reasonable option. (You don't really want all those people traipsing through your house, do you?) Also, you'll have to meet payroll immediately, even though your business may have no income for a few months.

That said, how much money will you need to get your staffing service up and running? Some experts suggest that you double the amount of money you think you might need.

Your start-up costs will depend greatly on the following factors:

  • Size: Obviously, starting out with a small office and few permanent employees costs less than starting out with a larger facility and numerous permanent employees.
  • Niche: Some sectors of the industry are more expensive to operate in than are others. As a rule of thumb, the more highly skilled the job assignments your company handles, the higher your start-up costs will be. There are at least three reasons for this: 1) employee salaries will be higher, 2) the need for a certain image may require a more expensive location, and 3) computer demands (both hardware and software) for testing and training will be greater. The most expensive niche in which to start up appears to be the medical staffing industry.
  • Geographical location: Office rent, employee pay, advertising costs, tax rates and insurance rates all depend on both your area of the country and the city/town distinction.

Start-up costs can range from $58,000 to $127,000, and you should have a suggested operating capital of between $80,000 to $135,000 in the bank.

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