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Temporary Help Agency


Minimum Start-Up: $10,000

Average Start-Up: $100,000

Revenue; $100,000 - $2.5Mil

Profits; $25,000 - $250,000

One Person Business: Yes


The high cost of maintaining a full-time employee contributes to the growth

of the temp-help business.

Advancement in computer hardware and software enables companies to staff

mean and lean, preferring to hire temps during peak seasons rather than lay

off workers during slower times. On any given day, over 1 million people

work on temporary assignments. By 1995, trade statistics estimate that

1.25 million jobs will go by way of "temps", creating an aggregate annual

payroll of about $10 billion.

These figures suggest that the temporary help business is here to stay. It

is one to watch through the turn of the century. Unlike the temp boom of

the late 70s, today's temp-help has gone beyond clerical help, with 37% of

placements involving professionals.


A temporary-help service acts as a matchmaker between businessses seeking

temporary help and induviduals who want a job. The temporary agency pays the

employee on a weekly basis a set rate, and in turn bills the business/client

a predetermined rate, usually 10% to 15% more than was paid the employee.



If there is a single hurdle that makes starting a temporary-help agency

"difficult", it has to do with your ability to cover the payroll up front.

As a temp agency, the demand for cash flow presents a two-sided problem.

While you are expected to pay your workers on a weekly basis, you are also

expected to extend your clients 30 to 60 days credit. So while you're

waiting to get paid, you need to have enough cash to cover your payroll.

For example, if you place 10 workers at 40 hours each for the week, at a

rate of $8 an hyour, it would require $3,200 cash for the week. That's

$12,800 in 4 weeks!


To avoid this problem, it is advisable to hire your workers as independent

contractors. You can act as their agent, and collect your commission when

they are paid.