Staffing firms face many of the same challenges in financial management as other industries – market fluctuations, economic conditions, competition for market share.
Stacked on top of these issues come issues particular to the industry – slim margins, mounting regulation and of course, the human element.
Many of these factors are out of your control, requiring you to adapt your business model for your business to thrive. Taking the time to analyze what you can control and focusing on those issues can boost your bottom line and give you the resources you need to remain financially healthy and have the means to grow your business.
Here’s how to take the first steps:
1. Diversify your practice
To protect your firm from market conditions, consider diversifying your client base to encompass different and more profitable service offerings. If you are mainly a temporary staffing firm, you can add direct hire or executive recruiting or offer strategic staffing options. Expand your geographic reach or the variety of positions or specialties you staff. The time to experiment with different niches is now, while the economy is strong. This will place you ahead of the competition when market conditions become more difficult.
2. Sell into current customers.
It’s substantially less expensive to sell to current customers than it is to win over new ones. The challenge lies in making your case to employers who may have a narrow image of what you offer. If you are currently staffing light industrial positions for a large manufacturer and would like to make a play to win their executive recruitment business, you may face an uphill battle. Not only will you have to convince the company you are capable of recruiting successfully for the C suite, chances are you will be dealing with an entirely different decision maker; one with whom you’ve built no history. Instead, try the baby-step approach. Ask your current contact to give you a shot at slightly higher roles, like maybe a line supervisor or supply chain, logistics or operations manager. Once you’ve delivered on those next-level roles, you will gain their confidence and will be seen in a new light.
3. Take a strategic approach
Too often staffing firms take a tactical rather than strategic approach, filling any order that comes their way. While this provides immediate revenue, it doesn’t set you up for long-term success. Don’t take any order at face value. Go behind the request to understand the true need and work with the client to help them solve their problem, not just rely on a band-aid solution. This provides the win-win of delivering better service to your client, selling your value to differentiate you from other providers and creating a revenue stream that you can rely on.
By employing these financial management best practices, you’ll be assured you are dedicating your resources properly to gain the most revenue and retain your firm’s profitability.
For additional information on financial best practices read these helpful related articles:
At Avionté, we provide staffing software that streamlines the administrative and operational tasks, giving you more time to focus on revenue-generating activities.
For more information on the latest financial tools and resources to improve your bottom line, visit this blog regularly for updates. If you’d like to discuss more details, contact the experts at Avionté.
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