Growing your staffing company becomes a natural decision to make after a while. But you must be properly prepared for it. Many agencies have tried to grow their businesses but have made fatal mistakes that have sunk them.
Here are seven mistakes you need to avoid when trying to grow your staffing company.
1. Taking on Every Client
To grow your agency and increase revenue, you need to provide your staffing services to more clients. To make this happen, you might be tempted to take on every client that comes forward. This is a big mistake. Just because a company wants to employ your agency doesn’t mean you should agree simply to add more clients to your list. Not every client is worth your time.
Make sure you run credit checks on every new client you consider taking on and don’t ignore red flags. Non-paying and late paying clients won’t help you grow—they’ll harm your business.
2. Not Applying for Financing
The more clients you get, the more revenue your staffing company will receive. However, don’t forget that this also means you’ll need to hire—and pay—more workers, too. Your cash flow might be fine right now, but once you have a substantially larger workforce, you might start to have difficulty making payroll every pay period. Applying for financing can solve this issue before it ruins your expansion efforts.
3. Not Investing in Technology
Your staffing company has been using spreadsheets to keep track of clients and candidates. So far it’s been working for you. But when you grow your staffing company, you’re going to have a lot more contracts and jobs in the pipeline that you’re going to need to manage, which means it’s time to invest in technology.
Purchase an applicant tracking software system and increase your administrative efficiency. The last thing you want is for operational barriers to hurt your productivity and impact your growth.
4. Doing It All on Your Own
When you only have a couple clients and your workload is relatively small, it’s easier to handle it all on your own—recruiting, customer service, payroll, compliance, marketing, and other aspects of your business aren’t too time consuming at first. But when you’re growing your business, all of these thing are going to start being unmanageable. You’ll feel like you’re drowning in paperwork.
To stay focused on your growth, you should consider outsourcing the administrative work—payroll, HR, and the like—to a back office service provider.
5. Changing Your Focus
You have been working within a niche so far, but now that you’re growing your staffing company, you want to open your agency up to other industries and business sectors in order to be able to reach a wider audience. Don’t do this. Your expertise and experience in your niche is your strength. It has gotten you this far. Don’t go changing the focus of your agency now.
Instead, keep working within your niche and try to widen your reach with targeted marketing and recruiting and work towards meeting your current audience’s needs more efficiently.
6. Not Growing Your Candidate Pool
Your clients are the ones who pay you, so it’s natural to want to put all your efforts into growing your client base. But what happens when you do land big clients and you have an empty pool of candidates? While you’re marketing to new business, don’t forget to also recruit new candidates or you won’t be able to provide your clients with employees when the time comes. You’ll be tapped out.
7. Neglecting Current Clients
When you become too involved in trying to get new business, you could end up neglecting your current clients. And this can not only hurt your revenue generation but also give you a bad reputation. You could end up losing clients and not getting any new ones. Make sure you’re still meeting your current clients’ staffing needs during your growth period.