Insights | Feb 11, 2019

Business Planning for Small Staffing Firms (Part 1 of 3)

By Tom Kosnik

The business sages tell us that if we want success then we must develop a plan for success. We’ve all heard it…“If you don’t plan for your business, then you plan to fail.”  What about hard statistics?  Small Business Trends surveyed 2,877 privately held business and discovered that companies that commit to planning for their business outperformed at twice the pace over companies that did not plan for their business.  Another study conducted by Brinckmann, Grinchnik and Kapsa with 11,046 companies concluded that planning helped companies grow 30 percent faster!  It all sounds great, but how do we go about it?

Business planning for small staffing firms is different from business planning for large staffing firms

 

Let me first define a “small” staffing firm.  Such staffing firms are what we call “owner operator” staffing businesses. They are typically firms with 15 million in annual revenue or less. This simply means that the owner of the staffing business is the president, the V.P. of sales, the lead sales rep, the V.P. of operations, the head of finance, the IT Director and, on the weekends, the repair man or woman. Sound familiar? Staffing Industry Analysis tells us that over 90% of independently owned staffing firms in the United States are under 10 million in annual revenue. It’s fair to say these firms would probably benefit greatly from planning for their businesses.

A key challenge for smaller staffing firms is getting unstuck from a particular revenue or headcount plateau that the business has settled into.  Another challenge is client concentration where 1 to 3 accounts make up 80% of the overall revenues. Yet another challenge is hiring and retaining good internal staff members that will assist with account management and growth. In addition, small staffing firms are, to some point, at the mercy of the banks. Their financing options are limited as the banks view such businesses as “high risk.” Factoring account receivables can leave little to no money in the business for the owner to reinvest for growth. It becomes a catch 22. Again, business planning can help!

 

In Part 2 of this series, we will uncover 3 key factors for business planning that will help with any and all challenges you may be facing as a small staffing firm owner.

Click here to read it.

At Visus Group, we take great pride in helping our clients; please contact us today.

Share This Post

Recent News

Insights | | Dec 11, 2019
Factors To Consider When Tweaking Your Company’s Compensation Plan (Part 1)

Tweaking the corporate compensation plan annually at the end of the year is a good practice for any company.

Insights | | Dec 11, 2019
Factors to Consider When Tweaking Your Company’s Compensation Plan (Part 2)

As you think about making a change to your company’s compensation plan, consider these factors to help your employees adjust to these changes.

Insights | | Oct 21, 2019
Economic Trends October 2019: The Economy is Slowing!

The economy is slowing, what are the best staffing companies doing to prepare and respond? Watch our video for our perspective.

Insights | | Aug 28, 2019
Margins are Up, how come Net Income is Down?

Margins in the staffing industry have ticked up for the fourth consecutive year. Guess what else has ticket up?

Insights | | Apr 30, 2019
Why You’re Pulling Your Hair Out to Get Your People to Cross-Sell

It seems so simple. If we can just get our people to cross-sell between divisions, everyone wins!

Insights | | Apr 03, 2019
5 Strategies to Live by for Effective Price Negotiations

Here are some helpful strategies I use to coach my clients and reduce anxiety associated with price negotiations.

Insights | | Apr 01, 2019
Key Elements to Keep In Mind When Positioning to Sell

Pundits tell us to always be managing a business as if you are positioning to sell it. This advice is prudent for several reasons.

Insights | | Mar 25, 2019
Looking for Acquisitions? 7 Common Mistakes for Buyers to Avoid

Even though mergers and acquisitions are at an all-time high in the staffing industry, many transactions go sideways due to some common mistakes.

Insights | | Mar 25, 2019
Looking to Sell Your Business? 7 Common Mistakes Sellers Make

Let’s address some of the mistakes sellers often make when trying to sell their business.

Insights | | Mar 18, 2019
Want A More Effective Leadership Team? Take These 3 Action Steps

The staffing industry is by nature a very reactionary business. When a client needs to fill a position, they typically need someone immediately.

Insights | | Feb 11, 2019
Business Planning For Small Staffing Firms (Part 3 of 3)

In Part 2 of this series, I mention sales planning as the third key factor for business planning.

Insights | | Feb 11, 2019
Business Planning for Small Staffing Firms (Part 2 of 3)

Business planning for small staffing firms consists of three key factors.