A staffing agency is an organization that matches companies with job candidates. Staffing refers to the process of approaching, employing, training, rewarding, and retaining the employees of an organization. When a job applicant registers with a staffing agency, they seek to make connections with hiring managers desiring to get the right people for their job vacancies.
Statistics show that the market size of the Office Staffing and Temp Agencies industry in the United States is $235.9 billion in 2023 and the industry is expected to increase by 3.6% in 2023.
Steps on How to Start a Staffing Agency in Texas
Table of Content
Conduct Market Research
Conducting market research before starting any business is key to running a successful business. Market research provides information about your market and business landscape. It tells you how your business is perceived by the customers and clients you want to reach.
It helps you determine who and where your customers are, and which customers are willing to do business with you. Thorough market research will help you understand how your target customers think and adapt to their needs in order to turn them into regular customers and brand advocates.
a. Who is the Target Market for a Staffing Agency in Texas?
- Job Applicants
- Banks, Insurance Companies, and other related Financial Institutions
- Businesses and Entrepreneurs
- Blue Chips Companies
- Corporate Organizations
- Research and Development Companies
- Households and families
- Schools (High Schools, Colleges, and Universities)
b. Is Staffing Agency in Texas a Profitable Business?
Yes, the staffing agency is a profitable business. The industry revenue is anticipated to increase in 2023 as corporate profit increases.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to staffing agency line of business and some of them are;
- Staffing for the IT industry
- Staffing for the Oil and Gas Industry
- Staffing for the Health Sector (Nurses, Doctors et al)
- Staffing for the Banking, Insurance, and the Financial Sector
- Recruitment, Human Resource, and Capital Development Consulting
- Highly Skilled Staffing Consulting
d. Who are the Major Competitors in the Industry?
- Staffing Texas, LLC
- CornerStone Staffing
- Burnett’s Staffing
- The InSource Group
- Texas Staffing Pros LLC
- Frontline Source Group
- Results Staffing
- RPC Staffing
- VSSI LLC Staffing Services
- Trinity Staffing Services
- Professional Alternatives
- Stride Staffing
- TPI Staffing Inc.
- Burnett Specialists Staffing & Recruiting
- Murray Resources
- The A List Staffing
- Austin Staffing, Inc.
- Infinity Staffing Solutions, LLC
- PDQ Staffing.
e. Are There County or State Regulations or Zoning Laws for Staffing Agencies in Texas?
No, there are no county or state regulations and zoning laws for staffing agencies in Texas, but players in this industry are expected to work with the regulations governing such business in the county where their business is domiciled.
f. Is There a Franchise for Staffing Agency?
No, there are no franchise opportunities for a staffing agency.
g. What Do You Need to Start a Staffing Agency in Texas?
- A feasibility report
- Business licenses and permits
- A good office facility
- EIN (Employer Identification Number)/Federal Tax ID Number
- A corporate bank account
- Office equipment
- Startup capital
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a staffing agency business are;
Creative Staffing Agency Business Name ideas
- The Recruiter© Staffing Agency, Inc.
- Job Connect® Staffing Agency, LLC
- Morris Jackson© Staffing Agency, Inc.
- Work Solutions® Staffing Agency, Inc.
- Mason Gray™ Staffing Agency, Inc.
- Julius Moses™ Staffing Agency, LLC.
- Regan Moore© Staffing Agency, LLC
- Jonny Tyson® Staffing Agency, Inc.
- Williams Palmer© Staffing Agency, Inc.
- Anthonio© Staffing Agency, Inc.
- Rick Larson and Co.® Staffing Agency, LLC
- Dallas Zone® Staffing Agency, LLC
- Emily Elton™ Staffing Agency, LLC
- Tyler Benston© Staffing Agency, Inc.
- Tick Tim® Staffing Agency, Inc.
- Edith Adams™ Staffing Agency, Inc.
- Flourish Flowers™ Staffing Agency, Inc.
- Anderson Global© Staffing Agency, Inc.
- Al Simpleton® Staffing Agency, LLC
- Francese Rowland™ Staffing Agency, Inc.
Register Your Business
a. What Type of Business Structure is Best for a Staffing Agency in Texas?
There are several options when it comes to the business structure of a staffing agency, but the one most players in this line of business consider is an LLC. It is considered because providers want to protect themselves from lawsuits.
b. Steps to Form an LLC
- Choose a name for your LLC.
- File articles of organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Start Staffing Agency in Texas?
- General Business License
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
d. What Type of Certification is Needed to Start a Staffing Agency in Texas?
You don’t need any certifications to start a staffing agency.
e. What Documents are Needed to Start a Staffing Agency in Texas?
These are some of the legal documents that are required if you want to run a staffing agency in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a staffing agency in Texas, there may not be a need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start Staffing Agency in Texas?
The cost required to start a staffing agency may vary significantly. But on average, you can budget between $5,000 to over $100,000.
b. What are the Costs Involved in Starting a Staffing Agency in Texas?
- The total fee for registering a business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as accounting services – $1,200.
- The cost of hiring a business consultant (writing of business plans inclusive) – $2,500.
- Insurance coverage – $2,400.
- The cost of payment of rent for 12 months at $1.76 per square foot – $25,600.
- The cost of facility remodeling – $5,000.
- Other start-up expenses including stationery – $500
- Phone and utility deposits will cost – ($2,500)
- The operational cost of the first 3 months (salaries of employees, payments of bills et al) – $20,000
- The cost of equipment (cash register, security, ventilation, signage) – $3,150
- The cost of the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound systems, tables and chairs et al) – $8,000.
- The cost of launching an official website – $600
c. What Factors Determine the Cost of Starting a Staffing Agency in Texas?
- The size of the staffing agency
- The choice of location
- The required licenses and permits
- The type of facility
- The type of additional services offerings
- The cost of furnishing and equipping the staffing agency office
- The cost of the insurance policy covers
- The cost of registering the business
- Cost of recruiting and training your staff
- The cost of the purchase and customizing of uniforms
- The cost of the grand opening of the staffing agency
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your staffing agency, but if you have the required finance, it will be nice for you to build your own facility. The building or reconstruction of a facility will help you come up with a facility that will fit into your business goals and vision.
e. What are the Ongoing Expenses of a Staffing Agency in Texas?
- Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
- Salaries of employees
f. What is the Average Salary of your Staff?
- Chief Executive Officer – $52,000 Per Year
- Admin and HR Manager – $35,000 Per Year
- Recruiting Consultants – $32,000 Per Year
- Accountant – $30,000 Per Year
- Customer Care Executive/Front Desk Officer – $28,000 Per Year
g. How Do You Get Funding to Start a Staffing Agency
- Raising money from personal savings
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Job Connect™ Staffing Agency, Inc. is a Texas-based and world-class staffing agency that will be located in Houston, Texas. We have secured office facilities in a central business district in Houston. We are set to compete in the competitive staffing agency industry not only in the Texas market but also in the United States.
Job Connect™ Staffing Agency, Inc. only presents companies with candidates considered an ideal match. All candidates complete an orientation that reviews the internal policies and procedures and discusses expectations. Job Connect™ Staffing Agency, Inc. reviews attendance requirements, call-in procedures, safety awareness, payroll questions, and any other information that leads to a seamless transition.
- Placing job ads in various online channels, evaluating applications, and providing shortlists of qualified candidates
- Screens applications and selects qualified candidates
- Schedules interviews; oversees the preparation of interview questions and other hiring materials.
- Assists with the interview process, attending and conducting interviews with managers, directors, and other stakeholders.
c. Mission Statement
Our mission is to provide professional staffing agency services that will assist businesses, individuals, and non-profit organizations in hiring the right fit for their company or business.
Our vision is to establish a standard and world-class staffing agency whose services and brand will not only be accepted in Houston, Texas but also in other parts of the United States of America.
d. Goals and Objectives
The goals and objectives of a staffing agency are to help organizations recruit the right staff for their organization.
e. Organizational Structure
- Chief Executive Officer
- Admin and HR Manager
- Recruiting Consultant
- Customer Care Executive/Front Desk Officer
a. SWOT Analysis
- Ideal location for a staffing agency
- Experienced and qualified employees and good management
- Access to a pool of skilled and unskilled job applicants (robust CV bank)
- Availability of different types of staffing and training-related services.
- Financial constraints may restrict the publicity and branding of the business
- A new business that will be competing with well-established staffing agencies and franchises in the city and on the internet.
- Inability to retain our experienced and qualified employees longer than we want during the teething stage of the business.
- Rising number of job applicants.
- Online market, services, new technology, and the starting of new markets.
- Changes in the attitudes and willingness of employees to work temporarily can increase or decrease the number of available workers.
- The arrival of a new staffing agency within our market space
- Low demand during the pandemic will reduce industry profitability.
- Economic uncertainty
- Liability problems
- The government could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses.
b. How Do Staffing Agencies Make Money?
Staffing agencies make money (commissions) by recruiting for businesses and organizations.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer.
d. Sales and Advertising Strategies
- Introduce your staffing agency by sending introductory letters alongside your brochure to businesses, corporate organizations, and other key stakeholders throughout the city where your staffing agency is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
- Create a basic website for your business to give your business an online presence
- Join local staffing agency associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth (referrals)
a. How Much Should You Charge for your Services?
Staffing agencies usually charge between 25% to 100% of the hired employee’s wages within the first month.
b. How Much Profit Do Staffing Agency Owners Make a Year in Texas?
The report shows that on average a small to medium-sized staffing agency can earn anywhere from $50,000 to $80,000.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the staffing agency
- The types of services offered
- The location the staffing agency is covering
- The management style of the staffing agency
- The business approach of the staffing agency
- The advertising strategies adopted by the staffing agency
- The number of years the staffing agency is in business
d. What is the Profit Margin of a Staffing Agency Services?
The profit margin of a staffing agency is not fixed; to a large extent, it will depend on some factors that are unique to the service you are offering and the commission attached to the services.
e. What is the Sales Forecast?
Below is the sales forecast for a staffing agency. It is based on the location of the business and other factors as it relates to such startups in Texas;
- First Fiscal Year: $320,000
- Second Fiscal Year: $450,000
- Third Fiscal Year: $540,000
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for a Staffing Agency in Texas?
- The demography of the location as it relates to job applicants
- The demand for the services offered by staffing agencies in the location
- The recruiting capacity of businesses and organizations in the location
- Accessibility of the location
- The number of staffing agencies in the location of the business
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What City is Best to Start a Staffing Agency in Texas?
- Houston, Texas
- San Antonio, Texas
- Dallas, Texas
- Austin, Texas
- Fort Worth, Texas
- El Paso, Texas
- Arlington, Texas
- Corpus Christi, Texas
- Grand Prairie, Texas
- North Richland Hills, Texas.
c. What Equipment is Needed to Operate a Staffing Agency?
- CRM and staffing software
- Booking and software
- Computers and laptops
- Fax machine.
When hiring employees for a staffing agency, you should plan to hire a competent chief executive officer (you can occupy this position), human resource and admin manager, accountant, staffing consultants, and call center agents.
Launch the Business Proper
No staffing agency opens its business without first organizing an opening party to officially launch it. You can do a soft opening party if you are operating on a low budget or you can go for a grand opening party for all and sundry. With a proper launching of the staffing agency, you will officially inform people in your city that your staffing agency is open for business.
a. What Makes a Staffing Agency Successful?
- Choose a good location and good office facilities to launch the business
- Make sure you partner with stakeholders and offer some staffing-related services (give your customers options)
- Encourage the use of word of mouth to promote your staffing agency
- Leverage all available online and offline platforms to promote your staffing agency
b. What Happens During a Typical Day at a Staffing Agency?
- The office is open for the day’s work
- The walk-in areas, chairs, and tables are properly arranged
- Applications and screening of applicants are done
- Training and orientations are done
- Applicants are sent to companies that are required
- Administrative jobs are carried
- Reports are written and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build Staffing Agency?
- Excellent talent hunting and management skills
- Excellent customer services skills
- Excellent organizational skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Work experience in a staffing agency
- Experience in managing people