Small Business Brief


How to Start a Temp Agency From Scratch

Have you thought about starting a temp agency?

It’s a great way to make money and to help professionals find quick work. It’s one of the few businesses that’s rewarding and fulfilling.

So how do you succeed at starting a temp agency?

You want to make sure you are able to attract talent fast. You also want to make sure you achieve lucrative profit margins.

Here’s what you need to know on how to start a temp agency:

How to Make Money with a Temp Agency

First, you want to know how a temp agency earns its profits. A temp agency has a relationship with companies that are seeking temporary staff members.

The temp agency “lends” these professionals to companies for a fee. The employee’s salary goes straight to the temp agency. The temp agency then pays the professional and keeps a percentage. 

The commission fee is up to you. You want to make sure that you earn a great profit. But you also want to make sure you don’t cut into your employee’s earnings too much!

Gather the Funds

Next, you want to look at how you’ll finance your temp agency. You can look at a service, such as to learn how to fund your temp agency.

You can start as a freelancer who connects professionals with jobs. You can save up your earnings to expand your temp agency.

You want to make sure you secure several clients before you expand your business. You should wait before you invest in office space or staff or any equipment. 

You can also gather funds from friends and family members. You can offer to pay them back as you recover the funds.

Or you can give them shares in your temp agency. If you do the latter, you can give them a percentage of your commissions.

You want to also learn about the costs of running a startup. You’ll have to research the costs of incorporating a business. You also want to look at how much it’ll cost to rent office space.

Other costs will include internet, web hosting, hiring staff, transportation, payroll services, insurance, etc. 

You might want to meet other temp agency owners during this period. You can learn from them how they began their business. 

Build Your Skills

You want to make sure you have the right skills to run a successful temp agency.

The first skill is that you need to know how to build a network. You’ll have to create a network of professionals and employers. 

You can start by going to local career fairs. At these career fairs, you can promote your temp agency to companies as well as professionals.

You should also create a LinkedIn company page for your temp agency. Make sure to connect with as many professionals as possible. You can also use LinkedIn to hire recruiters to work for your temp agency.

You’ll also have to learn how to market yourself and your temp agency. Social media marketing is one of the easiest ways to promote a temp agency. 

You can also look at email marketing, traditional media, and word-of-mouth promotion. But the best way will be from meeting others as discussed above.

Understanding Professionals

The next step is to know how to match talent with companies. You have to interview professionals and learn about what they are seeking. 

Below are some sample questions you can ask professionals:

  • What are your professional aspirations?
  • What type of work do you wish to avoid?
  • What are your dream companies?
  • What is your ultimate career goal?
  • Do you like to work autonomously? Or do you prefer to be micro-managed?
  • Do you wish to work remotely?
  • Are you creative, technical, etc.?

With these questions, you’ll get to know more about your professionals. You can then match them with employers that match their goals and values.

Understanding Employers

You then want to interview your employers to understand what type of talent they are looking for. Companies have different values and want to seek employees that match their company culture.

Here are some sample questions you can ask employers:

  • Do you prefer new professionals or seasoned professionals?
  • What educational backgrounds do you prefer?
  • What technical skills should candidates have?
  • Do you hire remote workers?
  • Do you prefer workers who can work autonomously?
  • Do you prefer workers who can grow within the company?

You want to make sure you understand exactly what an employer looks for in a candidate. This will make it easier for you to match the right professional with the right employer.

Find Your Ideal Industry

You can serve as many industries as you wish; however, a successful temp agency usually focuses on one industry.

As a result, you want to make sure you find your ideal industry. It should be one that you already know a lot about.

For example, if you know a lot about marketing, then seek companies and professionals in this industry. If you aren’t educated about the finance industry, stay away from it, even if there are lucrative opportunities.

You’ll do your best with connecting professionals and employers if you understand the industry’s standards. You’ll understand how the industry is growing and how you can find the talent to meet the changing demands.

By learning more about the industry, you can also choose which professionals and employers to avoid.

For example, you wouldn’t choose a marketing professional with no experience with social media marketing. You also would avoid any marketing agency that didn’t offer social media services.

That’s How Starting a Temp Agency Works

Now you know about starting a temp agency, you can start preparing to open your business.

Take your time researching how to start your temp agency and what industry works for you. Once you do, you can start meeting professionals and employers in the industry.

Start building your network and then communicate with them on a regular basis.

You should always let your professionals know about upcoming opportunities. Likewise, let employers know about the professionals in your network and their talents.

You can also find more tips on entrepreneurship on our website!