HOW TO START YOUR OWN MILLION DOLLAR TEMPORARY HELP SERVICE

HOW TO START YOUR OWN MILLION DOLLAR TEMPORARY HELP SERVICE

This is a service business with excellent growth potential, in dications of strong stability, a

nationwide market with a growing demand and a risk factor that's rated average or less than

most new business ideas. Temporary Help Services are well suited to absentee ownership

situations; require no experience or technical knowledge on the part of the entrepreneur; and

have only minimal equipment needs. Net profits before taxes for some established temporary

help services have been reported as high as $500,000 per year.

There's a difference between regular, private employment agencies and a temporary help

service. The employment agency is a "brokerage" office that matches unemployed persons

with available jobs. The temporary help service hires people onto its own payroll, sends them

out on contract jobs, and pays them accordingly.

Temporary help services make money "off the top." They send out temporary workers on one-

or-two-day-only jobs paying $15 an hour to the worker, and collecting $20 an hour for the time

the worker spends on the assignment. More and more, businesses are willing to pay the

premium costs for a trained person for just a few days at a time, than to accept the burden of a

40-hours per week payroll obligation and the task of finding enough work to keep such a

person busy enough to justify a full-time salary and the attendant support costs. Businesses

everywhere are finding it easier to pay more for "temporaries" than hired 40-hours per week

"permanents." That's the secret of success with this kind of business, and the point to keep in

mind when selling your services.

The successful temporary help service recruits as many skilled and qualified workers as

possible. These workers differ from the regular job-seekers in that they're looking for

"temporary" work only. For any number of reasons, they're only willing to work on jobs lasting

from one to five days, or perhaps two to three weeks, on any one job assignment.

These persons are ideal for the employers needing help but not wanting to hire and train full-

time employees. Your task will be to find and attract top people and to maintain complete files

on them. What kind of jobs they specialize in, their attitudes about work, and when or how

often they're willing to work would be essential information to have in our file. Each person

should be tested in your office, sent out on a few assignments to build a favorable reputation

as a good worker, and then offered a permanent listing on your roster of available specialists.

Work hard to build your roster of available workers. Within ninety days of start-up, you want to

be able to send someone out to fill any employer's needs, regardless of the job requirements.

Job assignments will range from loading dock and light clerical work to word processing and

even master-of-ceremonies work.

Depending on the size of your market, you could conceivably specialize in temporary help for

data-processing, the medical or legal professions, or perhaps the retail trade; and you'd still

make a lot of money. Generally though, we are going to show you here how to start a "full-

service" temporary help agency.

You'll need a good mix of employers in your area for best chances of real success. Your area

can be one of high unemploy ment or one with relatively few unemployed. Whichever the case,

the thinking of the business community and the work force available should be non-traditional;

there should be an undercurrent of thought toward the idea of calling in specialists to handle a

job quicker, and more efficiently, than the full-time worker.

The people wanting to affiliate with you as workers will be housewives, college students,

retired people and a large number of people who like to work, but don't want to be tied down

to a regular job. When you explain the concept of your service, you'll be pleasantly surprised

at the number of traditionalists you'll convert to temporary workers.

First, you should visit your local Chamber of Commerce office. Explain the philosophy of your

service, meet the chamber officers and ask for their help. You'll find that they have a listing of

all the major businesses in the area, plus the names of the 'right' people to talk to in selling

your service. If you request, you might be invited to Chamber meetings and be introduced to

the business leaders in your community. The only kind of information it is not likely they will be

able to help you with is a listing of doctors, lawyers and small, home-based, one-person

enterprises. However, don't neglect contacting these people; they have a need for varied

specialized help just as the larger, more widely known firms in your community.

You can locate your offices just about anywhere. You'll find, however, that your greatest

success will come if you locate in a modern office building housing professionals such as

lawyers, accountants, investment counselors, insurance company offices, etc. Project a

professional image. Locate in a downtown or business section of your town when you are

able to do so.

Basically, you'll need 600 to 700 square feet of office space. You should have a reception

area, two offices and a room to store supplies. The more prestigious your business address

and office, the better caliber clientele you'll attract. People looking for temporary work, and

employers considering using your services, will doubt your abilities if they aren't favorably

impressed with your image.

It is possible to start this business in your home, but make sure you have the space for a

reception area, and at least a semi-private interview area. Most of your selling efforts will be

conducted by mail, phone and personal visits to the employer's place of business, so you

won't have any problem there. However, you may run into zoning problems if your city zoning

people discover a large number of cars parked at your house every day. It certainly always

helps to be on good terms with your neighbors, and further, working by appointment will help

keep traffic under control.

So, practically speaking, starting your business from home will require a much smaller initial

investment. In this particular business, rent and advertising will be your largest expense, so

beginning the business from your home is definitely worth considering if your start-up funds

are limited.

In actual operation, you could have the applicants interested in your services contact you by

phone. You would then set up appointments either in their homes or your own, thereby

eliminating congestion of cars in front of your home, as mentioned above. If you began on a

part-time basis, you could have a family member or friend answer your phone and set up

appointments for you. If you do begin part-time, and working out of your home, you might look

into the advantages of a professional telephone answering service.

Another idea for saving on costs might be to rent unused space from a business already

established. These businesses might be sales and distribution offices, suburban insurance

agencies, quick print or copy shops, and repair service shops. Look around; many

businesses have had to take what was available at the time, and would be more than happy to

lease or share their vacant space. Keep in mind though, that you'll do much better with an

office of your own, and you should move into one just as soon as you can afford one. Proper

facilities that convey a professional image should be number one on your list of priorities.

Your business image is projected by your address and the appearance of the building in

which you locate. Your reception area will set the mood of professionalism and efficiency. The

reception area should be inviting - walls painted in light pastel colors, wall prints, floor lamps

and wall-to-wall carpeting. It should also feel comfortable while being functional. Comfortable

modern chairs and sofa; perhaps a floor planter or two, reception desk and ash trays all help

to achieve this effect.

The main office need have only a desk and a comfortable chair, facing the door, a chair

beside or in front of the desk, and a file cabinet. A print or two on the walls, and perhaps a

bookcase are the only "extras" you might use to dress up your office.

Your second office equipment will be for testing your applicants. You can inexpensively build

a table along the length of two walls, partition into cubicles and have an electric typewriter, an

adding machine and make a headset connected to a dictaphone/recorder, and another set

up for testing short hand capabilities. Later on, you'll probably want to have a word processor

and a computer.

Ideally, you should also have a sales office and a storage room. The sales office will be where

you greet and talk with employers who drop in to look you over to find out more about your

business. Mainly, this office will be where your people will work from when calling prospective

clients and selling your services by phone. The storage room needs only shelves to hold

various forms, mailing pieces, envelopes and business records.

One way to hold your start-up costs to a minimum is by leasing your office furnishings and

equipment. Whatever you do, remember that you're projecting an image, so don't settle for

less than the best. This is absolutely imperative in regard to any equipment used for testing

your applicants. You might be able to work out an arrangement with the business department

of a local college, or business school, to send your applicants to them for testing on their

machines. Such an arrangement, even at a cost of $5 to $10 per test, could save you several

thousand dollars in start-up costs.

The first person you hire should be either an experienced manager or someone you can

quickly train to assume those duties. It's best to hold out for a person with at least one year

experience as a bona fide personnel manager. This person should be outgoing, detail-

minded, people-oriented and able to work well under pressure without losing his sense of

humor. You don't want someone likely to blow his cool when confronted with a difficult

situation.

Your manager will be responsible for organizing the interview and testing systems, for setting

up your sales solicitation program, and for supervising the temporary workers, as well as your

office staff. It's a highly responsible and demanding position, so don't be reluctant to spend

the money necessary to get the best. You will need to research to determine what salary such

a top manager receives in your area.

The next member of your staff should be an enthusiastic, hustling sales person. This

employee should be experienced and adept at selling by phone as well as in person. Unless

you can afford to pay a good direct mail advertising copywriter to create your mailing pieces

for you, it would be wise to look for direct mail advertising or copyrighting experience in the

background of the sales person you expect to hire.

Your sales person should spend the mornings calling prospective employers on the phone,

and the afternoons making in person sales calls. With this kind of work routine in mind, look

for sales people with high ambition and energy levels. Try to pick the kind who will come in

early and stay late to work on his direct mail efforts, clearing the decks so that he uses his

time during regular business hours to close sales by phone and in person. You need and want

a "closer" - not an order taker. Be as selective as you have to be in choosing this

salesperson.

In addition to the going rate which a sales person of this type should be paid, you should also

consider paying a 5 percent bonus for each new account brought in. When you find the right

person, it will be worth it, so make it worthwhile to join your staff. Not all sales people will

necessarily develop into good sales managers, so try to find one who fits all your

requirements. The sales manager would recruit, organize, develop, motivate and supervise

your sales staff. With those responsibilities, you'd want to offer a salary plus override on the

sales production of his staff of sales people.

You'll need an efficient and foolproof bookkeeping system to keep track of your payroll, client

billing, income taxes, work schedule, hours worked and all the money that comes in. For this

chore, I suggest that you contract with a company that handles this type of work for a number

of independent small businesses. Explain to them everything you think you need; ask them to

set up a system, and then instruct your receptionist on how to keep it up to date on a weekly or

monthly basis.

You'll save money in the long run if you will consult with an accounting firm and have them set

up a system that not only works, but can be interpreted and computerized from the beginning.

Later on, you may want or need to hire a full-time bookkeeper just to keep up with the daily

entries. If so, check out salaries paid in your area for that kind of work.

The last member of your staff will be your receptionist. This person should be a lady of better

than average good looks, a lot of empathy for people in general, and an easy smile. She

should dress stylishly, but not provocatively. When she isn't answering the phone or greeting

customers, she can be administering tests, doing miscellaneous typing, making folders for the

records of your workers, and general office filing. And if you have an accounting system set

up, she could also assist with the daily bookkeeping.

The kind of temporary workers you'll want to attract will fit into several general categories, and

can be recruited in a number of different ways. Good places to look first will be in the

business, secretarial and technical schools in your area, and perhaps also the colleges. To

sustain your efforts, have a brochure about your company made up, and make sure the

placement directors or counselors always have an ample supply on hand. Many schools

stage "career days," when employers are invited to set up booths on campus and talk to the

students, pass out literature, and invite the students to visit their companies. Make sure that

you know about these, and that your firm is represented.

Another group will be housewives who perhaps held regular jobs before marriage or the birth

of a baby, and now want to get back into the job market. You can bring these people in by

posting bulletin board notices, arranging announcements at meetings, or with guest speaking

engagements. And of course you can try for guest appearances on local radio or television

talk shows.

Another group to recruit will be the "bored with life" people. These are in the 45-to-55 age

group, not satisfied with the future where they are, and looking for a better opportunity. It is

imperative that you begin recruiting and signing workers as soon as possible; at least a month

before you open for business is not too early. According to industry surveys, the most

common reason for the failure of temporary help services is not enough workers lined up to fill

the client demand. When you get a request for help, you should be able to send out a

qualified person.

Each market area differs in the number of different types of workers a temporary help service

should have available, but in every case, it's best to have more than you figure to be a basic

need. You must establish a maximum number of people within any one occupational field that

you'll sign up, or else you won't be able to keep everyone busy. Unless you keep the workers

you have registered working pretty much as often as they want to work, you'll begin to lose

them.

It's not hard to determine when a person is losing interest in temporary job assignments

through your firm. Whenever you call to give an assignment and you can't reach the person

you're calling, try several follow-up calls. It should become obvious to you that he's no longer

interested if you still can't reach him with your follow-up calls. It's a good practice to ask for

notification of vacation or other plans that will affect their availability for work.

If you call and a job assignment is refused with a lame excuse, come right to the point and ask

if he wants to change his availability status, or if you should drop him from your list of available

temporary workers altogether. Never coddle a temporary worker. If he's not available when

you call to give an assignment, or he gives you a less than valid excuse for not accepting, flag

his "call assignment" card and move on to your next available worker. You might call a couple

of days later to check his availability and interest in continuing to work, but don't waste too

much time. You can always reinstate such a worker, but it is probably better to spend the time

recruiting a replacement.

As mentioned earlier, one of your major expenses will be for advertising. Your manager and

sales people should keep you advised on your current advertising impact and results, and

from this you should have a good understanding of how to use your advertising budget most

effectively. Your advertising should be "double-barreled," aimed at both the employer and the

worker.

Generally, your efforts to add new employers to your client list should focus on direct mail.

Advertising efforts to recruit new temporary workers should be almost exclusively devoted to

newspapers. Years ago, some radio stations sold sixty-second commercials to a few

temporary help agencies. The agencies talked to prospective employers, playing up the fact

that they had skilled workers to handle overload and deadline situations. These commercials

were broadcast in the mornings before 8 o'clock. Then they followed up during the afternoon

hours with commercials inviting people seeking temporary help to come in and sign up.

Everything worked well except that not enough prospective employ ers called often enough to

justify the expense. This advertising method is being followed on a small scale in some areas

even now, so watch for it.

For really professional results, you should get a free-lance advertising copywriter to do your

direct mail piece. This should be a 4-page brochure making these points:

1. All employers have sudden work overloads; face deadline situations; or are suddenly

left with a mountain of work for specially trained employees just when they are home

sick, on vacation, or off for an emergency.

2. Your company understands these work load problems, and has available skilled

professional replacement workers who can quickly step in and get the job done.

3. Your company thoroughly tests each of the specialists hired for these special staffing

crisis situations, and can assure the employer that they are tops in their individual areas

of expertise.

4. Your company is well aware that many businesses would like to save the expense and

headaches of hiring a full-time specialist of the same caliber of your people on a

"temporary" or "on-call" basis. Your people cannot be hired by the prospective

employer because they already work for you; but if and when a temporary worker is

needed, your company stands ready to fill the need, regardless of the job specialty

required.

5. Even if he doesn't need one of your people today, the need could arise at any time, and

suddenly. So he should just keep the brochure and your telephone number handy, and

don't hesitate to call you personally for whatever temporary help is needed.

Once you have the copy written, decide on the layout and type style you want to use; if and

what color will be used; and take it to a quality printer. Your brochure should be printed on 60-

pound coated paper, and folded to suit your needs by the printer.

Your complete mailing should consist of a short cover letter inviting the recipient to avail

himself of your services; a brochure explaining your services in greater detail; postage paid

business reply card. The mailing envelope and the cover letter should be addressed to each

business owner or personnel manager by name.

Pay the cost of a bulk rate third class postage permit; have your permit indicia imprinted on

your mailing envelopes; and organize your mailings to get between 200 and 500 letters into

the mail three days a week, every single week. Don't skimp on your direct mail advertising

efforts, because this will be the lifeblood of your success.

Your newspaper ads for qualified workers looking for temporary assignments should be

display ads in the "Help Wanted" section. Most such ads are one column wide by 3 to 6

inches deep. Be sure you have an ad running in the Sunday paper, and at least one more on

Wednesday or Thursday. Before you even start soliciting accounts, you could run an ad one

column by 6 inches deep every day for a month.

These ads should invite the readers to come in and register with your company. Work with

your free-lance copywriter to say what you want to say. Overall, though, these ads should

explain that you have plenty of jobs going begging; that the worker sets his own days to work,

and can take jobs as often or as seldom as he likes. Stress the real advantage of "paychecks

on your terms" - an impossibility with a nine-to-five job. (We have had reports of employed

persons coming in to interview, going back and quitting regular jobs, and becoming great

"temporaries.")

Don't forget to send out news releases to all the media in your area when you open for

business. Leave yourself open for broadcast talk show interviews, and when you promote

someone, pass special mile-stones, or become involved in unusual stories in

connection with your business, at least telephone the media and give them this information.

The most important requisite for success, however, is consistent advertising. In a city of

100,000 population, you should budget $10,000 for your first year advertising. Plus, get

involved in as many promotions and as much public relations contact and publicity coverage

as possible. Once you're beyond the "break-even" point in your business, you will allocate

funds for advertising based on your gross income.

In day-to-day operations, your manager will interview applicants; do testing; talk with clients;

solve problems; take orders from employers; and make job assignments. Usually, his busiest

time will be right after lunch when job orders start to come in. With this in mind, you might want

to arrange for him to take an early lunch period.

While your manager is "running the show" your sales person will be making telephone calls in

the mornings, and in person during the afternoons. It's a very good idea to send out your

direct mail advertising one week, and then call on these same people, either by phone or in

person, the next week. Remember that your sales calls should be relaxed visits, allowing the

prospect to learn more of your business and the kinds of people you have available. During

each sales call, the prospect should be left with the feeling that your company can save him

money, solve a lot of production and scheduling problems, and take the exasperation out of

his personnel requirements.

As a rule, you'll find that most jobs are called in during the afternoon hours. With this in mind, it

would be wise to have set procedure for your specialists to call you each afternoon to let you

know where they can be reached through 5:00 p.m. if they are available for a job assignment

the next day. You might want to set a policy of "No call from you - No assignment for you."

Most temporary help agencies give their workers a supply of a 3-part time card when they're

hired by the agency. When the request for a worker comes in, the most qualified in the

required category is called. Job, name of company, location, approximate length of job, and

salary are all explained. If they agree to take the offer, they fill in the time card for the day the

work begins. When they report for work, they have the time card signed by the employer to

verify starting time, and finishing time. One copy of the time card stays with the employer; the

temporary worker keeps a copy; and the other copy is mailed to your office. Smooth and

simple, but make sure you've got everything worked out before you begin.

Your bookkeeper notes the proper information on the ledger for that employee, files the time

card, and sends a ledger duplicate to accounting for billing. Of course a reminder call should

be made first, but as a rule, any account that hasn't paid within thirty days should receive a

personal visit. As to the hard-core delinquent account, no more employees furnished, and a

collection agency to clear up the account will be your policy. You may want to look into the

advantages of selling your accounts receivable to a factoring company.

Unlike the brokerage type employment agencies, your temporary help agency will not require

licenses other than those required by any other business in your area. You should, however,

bond each of your employees in order to protect yourself from any possible liability or other

legal entanglements. And of course you'll need to carry a standard business insurance policy.

Is it, then - the HOW, WHAT, WHY and WHERE - of getting started with your own profitable

temporary help service! Remember, it takes solid and consistent advertising, earnest

recruiting, and selling. So don't stop or let up until you have everyone in your area registered,

and every possible employer as a client, aware of your business. It's a big job with lots of

challenging work involved, and you'll need good people to help.

It is worthwhile to search out these people with care, to be sure you have good, reliable

employees - the rewards will be well worth it! Organize your business for success, and get

with it. The WHEN is NOW!!!