How To Open Up A Temp Agency?

How To Open Up A Temp Agency?


Temp agencies offer companies a way to hire friendly staff on short-term engagements whenever the business demands it. The temp industry has grown tremendously in recent years. It is estimated that there are over 300,000 temp agencies nationwide. Opening up a temp agency can be a lucrative business venture if you execute it properly. The following article will highlight the steps you should take to help open up such a business.

Table Of Contents:

What Are The Benefits Of Opening Up A Temp Agency?

Nowadays, it is more and more common to find temporary agencies. The lure of flexibility and the benefits they pass on to their temporary employees have made this a successful model, whether a small business or a large one. While there are many advantages of running one, you should consider the following benefits you may get if you open up a temp agency:

  • A growth industry
  • The temporary industry is thought to be a 70 billion dollar industry. The government has also predicted that the temporary sector will grow by 115% over the next ten years. It means that more and more people will be looking for temp jobs. 

    With an increasing number of temp jobs, there will also be greater demand for temps. You will have an excellent opportunity to generate an alternate income stream in this growing niche market.

  • Good profit margin
  • An average of 20% profit margin may be made on each worker, providing you with a healthy net annual income. An average of $2 to $5 per hour can be earned from each temp, with an average pay of $7.25 per hour. It can add up to a weekly or monthly income figure of about $1,000.

  • Less overhead costs
  • It is necessary to buy equipment and hire a large workforce with employees. However, when you run a temporary agency, you only have to worry about your fees for each worker. It cuts out many of the usual expenses of opening up your own private business.

  • Limited liability
  • As a worker, the temp agency is not responsible for your actions. All responsibilities lie with the individual employer. It means that you are not liable in any way, shape, or form for any actions that the temps perform while on the job.

  • Low start-up costs
  • The temporary industry is one of the cheapest industries to enter, with minimal overhead costs. The equipment needed consists of a phone and your computer or laptop. There is no need for large office buildings or machinery. It allows you to invest your initial capital into advertising and market your business.

    This combination of great benefits can help you create a very profitable business venture if you decide to open up a temp agency. Apart from the common benefits, it will be great if you do a thorough analysis on the pros and cons of starting your temp agency.

    What Are The Steps To Start A Temp Agency?

    Temp agencies do not require a lot of initial investment or business infrastructure to begin. Most agencies operate from a small office space and essential equipment. However, a step-wise overview of the general approach required to start one is as follows:

    Plan your Temp Agency: The first step to creating your temp agency is to make a business plan. This step includes thinking about the following:

    • The target market - Before starting your own business, the initial step is to figure out your target market. It will assist you in narrowing down your scope and deciding how to run your business effectively. It is also important to consider the pricing involved in running an agency and estimate these before setting up shop.
    • Deciding your business name - It is the first step in starting up a company. It is better to pick a name that is catchy and memorable. It will help the success of your business because it will be easier for people to remember your company name.
    • Your target budget - Planning your temp agency determines how much money you want to invest in starting your own business. Deciding this amount means that you will have enough capital in hand to start with advertisements and marketing campaigns.
    Form your Temp Agency into a Legal Entity: The most common business structure for temp agencies is a Limited Liability Company (LLC). LLC's allow you to remain private and also limit your liability.

    Consult an attorney on the procedure to register and create an LLC if you have decided to form your legal entity. So, in other words, the second step to start a temp agency is to develop your legal entity.

    Register your Temp Agency for Taxes: You need to register your temp agency for all the required state and federal taxes. The most common taxes are sales tax, employees withholding, and unemployment tax. 

    Consult with a professional on setting up and paying for these taxes. Another important thing you need to do is get a Tax ID number (TIN). It will be required if you decide to hire any employees. 

    Open a Business Bank Account & Credit Card: You will need to open a checking account at a local business bank. You will also need to open a business credit card. You will need these things to pay all the administrative fees and report your activity.

    Get the essential Permits & Licenses for your Temp Agency: After forming your legal entity, the next step is to apply for any government licenses and permits required to operate your temp agency. It will help you run your business legally and protect you from legal liabilities if a lawsuit is filed against you.

    Get Temp Agency Insurance: You will also need to get a business insurance plan for your temp agency. It is required for any business or corporation and will help protect you from any liabilities, accidents, or lawsuits in the future.

    Create a Website for your Temp Agency: Several options are available for creating a website for your temp agency. You can either create one independently or hire a web designer to create one for you. A website is necessary because it will provide the Internet presence required to run a successful and profitable temp agency.

    Recruit clientele: This is one of the most crucial steps to start a temp agency. You will need to advertise and promote your business to potential clients to generate revenue. Promoting your business can be done by several methods:

    • Direct marketing - It involves sending out flyers and brochures door-to-door. It is pretty practical and has helped many people start up their businesses successfully.
    • Advertising - You can advertise your business by putting up flyers, searching the Internet for potential clients, and sending email newsletters to potential hires.
    • Word of mouth marketing - You can also increase your business by telling others about it and asking friends and clients to refer their friends to you. It is an excellent way of creating a following for your agency, which will generate more business opportunities for you.

    Tips To Grow Your Temp Agency

    1. Always try to keep your rates low: One of the best ways to grow your business and attract more clients is to keep your temp agency fees low. It will help you beat out the competition and keep a steady workflow.
    2. Provide Excellent Customer Service: Another way to attract clients is by providing excellent customer service. It can be achieved by communicating with them and ensuring that they do not complain about you or your employees. Also, maintaining an account of your client's contact information and past work history can be helpful when clients request the same employee again.
    3. Be Flexible with your temp agency hours: You need to keep your temp agency hours open and flexible to meet your clients' needs. This way, you will accommodate their schedules and maintain a steady flow of work coming in.
    4. Pay close attention to detail: A good way of improving your business is by paying attention to the details of your business and correcting any issues that you may find along the way. It is always best to ensure that everything runs smoothly before moving on.


    Starting a temp agency is a great way to earn extra money and meet your financial goals. It is pretty easy to do and can generate a steady income stream. However, if you want to succeed, you need to ensure that you do everything correctly. 

    If you do everything properly, you will have a great chance of prospering as a temp agency owner.


    What skill sets and experiences will help you build a successful temp agency?

    Even though it does not matter what experience and skill sets you have, you should have some marketing skills. You need to be able to promote your agency to clients and also generate business for yourself. The more abilities you have, the more your chances of success as a temp agency business owner.

    What is the growth potential for a temp employment agency?

    The growth potential for a temp employment agency is quite significant. The more clients you attract, the more your revenue will be. It will, in turn, lead to a steady flow of work and more revenue for you which you can use to increase your business.

    What are some of the problems I may face as a temp agency owner?

    You may encounter several problems when starting up or operating your temp agency. Some of these issues include:

    • Inability to meet the demands of clients: You may not be able to handle all the requests from your clients and so whether you will lose them or not.
    • Low pay rates: If you cannot match the rates of other agencies, this will lead to very low profits for your business.
    • Difficulty in hiring employees: Finding qualified and reliable employees willing to work for low wages can be challenging at times.
    • Mismanagement of funds: If you do not handle your funds properly, then you will have a lot of problems such as accounting issues, late payments, and even fraud.
    • Difficulty in finding new clients: Clients can be hard to find, too, mainly if they are not in the same area as you or have particular needs that you cannot fulfill. One of the biggest problems that most people run into when starting up a temp agency.

    However, if you are aware of these problems and plan accordingly, you will better succeed your temp agency.

    Older Post Newer Post