How to Start a Staffing Services Business

How much can you expect your business to make in gross sales? These figures vary wildly in the staffing services industry. Staffing experts say that privately held companies average somewhere around $750,000 a year. But we talked to several owners whose businesses make closer to $15 million in gross sales. More than one owner topped $1 million in sales the very first year.

Marking It Up

The profit for staffing services is in the markup they add to the price of an employee's labor. There's a huge range for markups in the staffing industry, but several owners noted that industry markups have increased in recent years. In fact, several owners noted that although industry markups have slipped in recent years, markup can remain high even in a slumping economy because there aren't that many qualified applicants to work with. In addition, today's workplace requires more skills and therefore more training.

Wide markup ranges exist even within the same company. For example, the markup for PDQ Personnel Services in Los Angeles is anywhere from 25 to 75 percent.

To determine the amount of markup you can earn for a particular type of placement, you'll need to consider all the following factors:

• Amount of competition
• Client relationship
• Industry sector
• Local standards