The Board of Employee Leasing Companies is responsible for licensing and regulating employee leasing companies. The board meets regularly to consider applications for licensure, to review disciplinary cases, and to conduct informal hearings relating to licensure and discipline. The board engages in rulemaking to implement the provisions set forth in its statutes and conducts other general business, as necessary.
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How to Start Your Own Employee Leasing Company
An employee leasing company as defined by “Entrepreneur” comprises, “Workers who are officially employed by a professional employer organization, which is responsible for overseeing all [job] functions, but who actually perform all work for your company.” Unlike staffing agencies that provide temporary to permanent positions, small business employee leasing companies hire job candidates and then “rent” them out to other companies for a fee.
Register your business. Visit an online legal document creation services, such as Legal Docs or Legal Zoom and write your Articles of Incorporation. File them with the state and register your business’ name with the state or county. Registering your Doing Business As or fictitious name is done at the county or state level. For example in the state of Texas you must register your employee leasing company’s name within the county it is based, but in Florida fictitious name registration is done at the state level.
Consult your state and county licensing boards to see if you need a license or permit to operate your employee leasing company. For instance, in Texas, you need a license to operate an employee leasing company. The Texas Department of Licensing and Regulation states, “A staff leasing company (also called a Professional Employer Organization or PEO) is regulated by the department through Chapter 91 of the Texas Labor Code (staff leasing law).”
Locate professional office space. Ideal office space will be about 650 to 850 square feet and have a small reception area, an office for you, a small conference room or access to a conference room and a testing area for new job candidates to determine their skill levels.
Create a niche in your serviceable area. To stand out from your competition, find and develop a niche market to cater. Your employee leasing business needs more than advertising in print, radio and television media, it needs to be a distinct “go-to” small business for specific job candidates, such as law offices, medical offices, engineering firms and financial services firms. Pick a specialty and develop a reputation for providing quality employees to that specific industry.
Build and grow a business network. Attend job and career fairs in your area to meet both job seekers and employers. Pass out business cards to everyone you come in contact, and be ready to discuss how your company operates. Have information pamphlets printed to hand out to employers as well as job seekers.
- 1What License & Requirements Are Needed to Open a Staffing Company?
- 2Starting a Small Business Recruiting Firm
- 3How to Start a Retail Sporting Goods Business
- 4How to Start a New Staffing Agency
What License & Requirements Are Needed to Open a Staffing Company?
A staffing company develops relationships with employers and places qualified individuals in the employer’s open positions. In general, the the licenses and requirements that are needed to open a staffing company are few. The company helps employers to fill short-term and long-term positions and, at times, provides direct placement assistance for employers. Starting a staffing company can be one of the easiest businesses to initiate.
Legal Business Structure
Like every business, the staffing company must have a legal business structure. In most cases, it is preferable for the staffing company to have a corporate entity to protect the owners from legal liabilities that result from the errors and omissions conducted by their placed employees. If the staffing company elects a partnership or corporate business structure, it must charter its business with the state’s Secretary of State. The business structure does not have to be chartered within the state in which it operates.
State Business Registration
Once the staffing business has secured its legal business structure, it must register its business operations with the state in which it will operate. The registration process varies by state and requires a registration fee. Once the registration is completed, the state will provide the staffing company with a state tax identification number, which must be referenced when paying the business’s taxes, including staff and employee withholding.
Business Insurance Policies
A well-defined business insurance policy helps to protect the staffing company from liability and aids the company in meeting its legal requirements. The staffing company requires a general liability insurance policy, as well as workers’ compensation for its full-time staff members. Workers’ compensation insurance is especially important when your staffing company offers long-term staffing services. Most states require businesses to maintain workers’ compensation insurance for its employees.
If you provide long-term placement services, the placed employee is a long-term employee of the staffing company and requires workers’ compensation coverage under the staffing agency. To determine the exact insurance needs for your staffing company, speak with your insurance agent and provide the agent with the details of your staffing company. The agent will aid you in building a policy that meets the staffing company’s needs and the requirements of the state.
Other Business Considerations
While some staffing companies focus on general employment and labor positions, some staffing companies specialize in certain industries, such as nursing or technology placements. Some states require specialty staffing organizations to acquire specific licenses in order to place employees. To determine whether your state requires these licenses, seek assistance from your city’s business development office or representative. The office will provide you with the specific information needed to obtain the additional licensing, if required.
Locate and acquire office space and equipment. Your office space should offer a professional front and have enough space to accommodate at least three separate spaces: your office, a reception area, and a testing area. You’ll also need one desktop computer for each space and a fax machine, copy machine and phone system.
Build a network of business contacts by attending job and career fairs and introducing yourself to business sponsors, attendees and job seekers. Have plenty of business cards to hand out and a pen and paper to take down potential client contact information. You can also advertise in local newspapers and spread the word about your new recruitment firm through friends, family, and other social organizations. Be sure to utilize online social networking sites for both free and paid advertising.
Develop your own niche market. PowerHomeBiz.com recommends that you find and develop your own niche market to satisfy the needs of job candidates and small businesses alike. By developing a specialty market you will come to be known as the go-to person for small businesses and job candidates in that particular industry. For instance, you can focus on law firms, medical practices or financial planning firms.
A recruiting firm can offer an entrepreneur a solid business with continual income. Any time is a good time to start a recruiting firm, according to Start-UpBizHub.com, because in an upward economy more businesses look to a recruiting firm to find qualified candidates, while during economic downturns more candidates seek out a recruiting firm to find work.
Get a candidate evaluation process in place. It is imperative that you scrutinize each job candidate throughly to ensure that you are giving your small business clients the best and most qualified person for the job, according to Start-UpBizHub.com. You want your job recruits to authorize full background and previous employment checks as well as any drug screenings. Moreover, you’ll need testing software to determine each job candidate’s computer proficiency. This goes directly towards building and maintaining a good, professional reputation.
A staffing agency or employment agency is a company that provides clients with qualified workers. “In the staffing industry, clients are the companies that contract for labor or expertise, and the product is that very labor or expertise,” according to the Entrepreneur website. Staffing agencies typically specialize in providing workers to particular industries or businesses, such as law firms, accounting firms, and industrial or warehouse businesses.
Determine your start-up costs. A staffing agency will not require as much start-up capital as a retail business but will have to purchase office equipment, such as computers, a fax machine, copy machine, telephones, desks and file cabinets, as well as evaluation software to test a job candidate’s computer skills. Other costs include legal fees to register the staffing agency and office leasing money.
Register your staffing business. Use an online legal documentation service to write your articles of incorporation or download a standardized form from the secretary of state where you will be in business. File your articles with the secretary of state and register your staffing agency’s name with the county clerk or secretary of state’s office. In addition, apply for a federal tax ID number, known as an EIN. Thereafter, open a business checking account.
Obtain financing. Financing for a staffing agency can be found by way of a small business loan or through personal credit card use. Apply for a micro loan using the Small Business Administration’s micro loan program. Micro loans are under $35,000; the interest rates range from 8 to 13 percent, and the loans are repayable over a 72-month term.
Develop a client base. Print brochures and business cards and deliver them to local businesses, including accountants, law offices, medical offices, advertising agencies, financial planning firms and other professional offices. Follow up by phoning the office managers and offer to answer any questions. Attend job fairs and hand out your staffing agency literature to both employers and people seeking work.