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It’s a great time to start up a staffing company. For example, staffing employment for the week of Aug. 7–13 increased to 96.74, reaching the highest value so far this year, according to the ASA Staffing Index. Temporary and contract staffing employment was 0.29% higher than the prior week, growing for the fifth consecutive week. Staffing employment was 1.43% higher than the same week last year.

Those are strong numbers. So if you’re contemplating jumping into this dynamic market, the timing is excellent.

However, while staffing doesn’t have many barriers to entry, it does present other challenges.

You need to avoid these common start-up mistakes that can at best impede growth and, at worst, cause your staffing firm to fail.

Start-Up Mistates:

Mistake #1:

Excessive Internal Hiring. Internal payroll can stall you right out of the gate. Besides adding to the payroll, every additional hire adds to your insurance expenses and other overhead costs.

Fortunately, there are many options to reduce these costs that weren’t available to the staffing firms of yesteryear. For  example, you can outsource your payroll, your marketing, and your software, including CRM. This will keep your start-up company lean and mean.

Outsourcing has another benefit. You won’t make the same mistake many staffing start-up owners make, which is keeping internal employees low and trying to do everything themselves, thus losing the focus needed to concentrate on the key staffing priorities, such as revenue and client management.

You can also then have extra payroll to hire great recruiters, which will really help to grow your business.

Mistake #2:

Jumping Into a Market Without Researching It.  Would you buy a car without researching the price and going online to comparison shop? I think anyone would agree that starting a business is a bigger step.  However, unfortunately, that’s exactly what many start-up owners do.

Luckily, you have many free research tools at your disposal, both online and off.

For example, you can avoid this blind spot by finding data at your local Chamber of Commerce. You can also find excellent data at the Bureau of Labor Statistics (BLS) that will let you slice and dice skill-sets and opportunities. And don’t overlook local business groups as well.

Research also applies to finding out who your competitors will be. Is the market crowded, or relatively wide-open in your area? This will affect your entry, and allow you to strategize your brand and your service differentiation.

Mistake #3:

Not Having Enough Capital. This is a crippling mistake. When you are a start-up, especially in the early stages, you’ll be spending more than you’re making. Not having enough working capital has many negative consequences, from not being able to service certain clients all the way to business collapse.

This is why from the beginning you should partner with a capital or payroll funding source so that you can turn to them when a need arises.

Why Madison Resources?

At Madison, we’re here to help start-ups in the dynamic staffing industry. We provide affordable payroll funding, progressive staffing technology, complete back office support and expert start-up advice. Give us a call today to see how we can get you off the ground. We offer more support to help staffing firms succeed than ANYONE else. Fully outsourced back office services. 100% payroll funding. World-class business intelligence. And exceptional staffing technology. Madison Resources gives you everything you need to drive sales, improve recruiting and deliver exceptional service.

At Madison, we’re here to spur growth and we’re customized to help staffing agencies do just that.  Contact us and we can arrange a demo of our business intelligence tool and talk about many other resources.

Contact us today to see how we can help you today.


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