An Ultimate Guide to Start a Staffing Agency in the USA

The purpose of this article is to explain to highlight the steps and formalities for starting up a Staffing business.

What we need to know about staffing?

Staffing is defined as the fulfillment of manpower and specialized needs of companies and organizations, training of individuals and assigning them of specific job functions and responsibilities.Staffing agencies typically specialize in providing workers to particular industries or businesses, such as law firms, accounting firms, and industrial or warehouse businesses.With the growing increase of personnel for specialized and challenging jobs, it is difficult for the organizations to find the person with the exact skills and qualifications within the reasonable time without delaying their projects. Staffing agencies comes up with the idea of providing you with the highly skilled professionals as per your requirements. In addition they have a better sense of evaluating the personnel experience and skills.

  
Things taken into consideration while starting staffing business:

• Learn about the staffing business:

You need to learn about the staffing business. How well do you have the knowledge of industry. What are the requirements of the vicinity and area where you want to start your business. You need to read book, refer the relevant sites or have a casual conversation with the people in the similar industry.

• Determine your target market

Next thing after having a thorough knowledge of staffing business, next thing is to understand the requirements of the market and area where you want to start from. Again this can be done while having discussions, making market visits. You need to decide that which area or industry you want to target for your staffing business, like general employment, labor positions, IT, finance, law, tax, warehousing etc. Once you have decided on your target market, you can go on with the other requirements.

•  Choose a Location

While choosing a location for your business, you need to understand the laws and regulations prevailing in that particular area. What are the income and sales tax, property tax rates in that area? Are the businesses in the surrounding areas competing? You will need to do the research. Talk to business owners and small business communities in order to understand the area specific business requirements.

• Write a business plan

After fulfilling all the basic formalities, you need a business plan.  Write out your ideas, study about your competitors, and do a feasibility study for your new business. Though not necessarily, but all your business plans should be written and documented.

• Determine your startup cost

You don’t require as much start up cost as a retail business but you will be needing an office setup, equipment purchase cost (computers, fax machine, copy machine, telephones etc), advertising cost (brochure, newspaper ads), office rent, legal cost.

• Obtain Finance for your business

Now you have all prepared for the basic needs, now its time to decode on the means to finance your business. You will be needing some form of capital either it comes from your personal savings or debt financing. For staffing business, a small term loan would serve the purpose. This is the type of loan that is generally used to finance day-to-day expenses such as inventory, payroll, and unexpected or emergency items. Short-term loans are usually for a one-year term or less, and can include revolving lines of credit or credit cards.

• Select a name and logo for your business

The selection of name and logo for your business is as much important as business itself. Select a name that is short, easy to spell and memorize. Select the logo that conveys message of your business effectively.

• Maintain a client base

According to the Entrepreneur website, "In the staffing industry, clients are the companies that contract for labor or expertise and the product is that very labor or expertise". Most important thing while starting a business is to maintain a client base and develop very strong relationship with your clients. You can do this by printing your company’s brochure and distributing them in law offices, IT offices, financing firms, advertising agencies. 
 

A proper follow up through phone calls and personal visits to the offices would help in solving queries.

Statutory requirements when you choose to register staffing business as LLC:

It is preferable for a staffing business to register itself as a LLC to protect the owners from legal liabilities. The staffing business must have a legal business structure. Staffing business must register itself in the state where it will operate.

• Register your business in the state where your business will operate. Kingly refer respective secretary state site.

• Obtain state tax identification number.

• Obtain Articles of organization or Certificate of formation pursuant of section 203 of the Limited Liability Company Law.

• Obtain specific license in case of specialized staff (some states do not have these requirement).

• Obtain Employer Identification Number EIN. If you have registered business as a corporation or an LLC with the Secretary of State or a Division of Corporation, It is not required for the Sole Proprietorship. An EIN is used, to open bank account, filing taxes and hiring employees.

• Obtain your business license and permit (if applicable).
  

• Obtain business insurance.

Choose Business Structure

You can choose one of the following business structures to incorporate a Company.

Registering a Sole Proprietorship | File an LLC | Open a Corporation | Register General Partnership | LP, LLP, LLLP

The ideal structures to open a Staffing Business are either Setting Up a Corporation or Registering an LLC.

Non US Resident

A Non US resident can also register a company in the USA without a Social Security Number. ITIN will be issued to the Non Residents to file taxes.

This article is written for the informational purposes only and you cannot consider the contents in this  article a legal advice. The author has shared her opinion , not InfoTaxSquare.com