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MicroStaffing - Making BIG Profits From SMALL Business

Part 2 of 2

Ideas for Making Staffing Services More Appealing to Small Businesses

Step 1: Reinvent your services

  • Eliminate the high cost of contingency placement For every placement fee you collect, thereís probably 2 or 3 you lost. For example, if you have a 33% fill rate, then your fee has to be high enough to cover the other 67% of your work when you donít get paid. This is grossly inefficient, and if you can eliminate the contingency, you can lower your fees and make more. This could be done through retainers, flat rate or hourly fees, or unbundling your services and charging a fixed or hourly fee for each task you perform.

  • Sell project solutions not labor hours A $75 an hour contractor sounds really expensive to most small business owners. But a $1,500 fee for a 20 hour project where the small firm lacks the in-house expertise to do the work, may seem like a bargain. Instead of selling hourly labor, look to sell the knowledge and output of your temporary and contract employees.

  • Think flat hourly rates rather than mark-ups on payroll As an industry, we may hade a mistake by bundling our fees into the hourly bill rate. Why not pass the temporary employee on at cost (or cost plus a very small mark-up to cover payroll administration costs and your financial risks) and then charge an hourly or fixed project fee for your services?

  • Focus on the value of flexibility and expertise on demand Most small businesses are short on resources and lacking in expertise in key functional areas. For these firms, hiring contractors can be dramatically cheaper than using consultants. As a staffing firm, you can provide low-cost, on demand access to Accounting, Finance, HR, IT, Legal, Marketing, Sales and other professionals and executives. Most small business owners donít know staffing firms can provide these kinds of people, and they definitely donít know that you can save them money in getting the knowledge they need.

Step 2: Redesign your approach to sales

  • Field sales force may be cost prohibitive Itís no secret that cold calling is an inefficient sales activity. But when the value of a client is measured in tens or hundreds of thousands of dollars, the results often justify the means. However, when the value of a client is measured in hundreds or just a few thousand dollars a year, you canít afford to rely on inefficient sales methods. While direct sales efforts will remain essential to educate clients, build trust, and sell solutions, you will need to replace cold calling with more cost-effective ways to generate sales leads.

  • Inside sales with sophisticated marketing To lower your cost of selling, implement a combination of direct marketing and inside sales. Using marketing tools like direct mail, email, search engine optimization, pay per click advertising in combination with event marketing, social media and your companyís website will enable you to reach more people, more often, and for far less cost than with direct sales. Combine that marketing with telemarketing to follow-up on your marketing initiatives and respond to inquiries, and you have a system that allows you to effectively generate qualified sales leads at a low cost per prospect.

  • Partner with firms that sell to small employers Often the most effective way to sell a product or service is to sell through someone else. For example, most of the products you buy at the grocery store we not manufactured by the grocer. Likewise, you may be able to build distribution channels for your services by partnering with companies that already sell to small business owners. Potential partners could include professional employer organizations (PEOs), accounting firms, IT solutions providers, or even companies that sell office supplies and office furniture.

  • Partner with people who consult for small employers In addition to companies that sell to small business owners, look for individuals who provide consulting services or are able to otherwise influence how small business owners make decisions. This list could include HR consultants, local SBA offices, SCORE advisors, and local colleges and universities that have educational programs for entrepreneurs. While these other organizations may not sell your services, you can partner with them to educate the small business owner about better approaches to hiring and managing people.

  • Less selling, more educating While large employers tend to be pretty sophisticated users of staffing services, small business owners are not. Most wonít understand the value of your services and even worse, many will have misperceptions about the cost and quality of the people you provide. In order to sell to these people, you first have to educate them. Teach them when, why and how to use staffing. Show them how they can use staffing to reduce costs, improve productivity, and reduce their business risks. And prove how affordable your services really can be. You may use your website, direct mail, email, seminars, webinars or even drop off materials, but the key is to consistently be offering valuable information that educates and informs.

The Micro Market is a Macro Opportunity

If you could sell your services into a marketplace with millions of potential clients, strong need for your services, and virtually no competition, how fast would you jump on the opportunity? Well, thatís exactly what you have with the small business market.

Small businesses represent literally millions of companies that currently do not use staffing services. But they are the ones creating the jobs. They need direct hire services. They need temporary staffing.

But first, they need someone to show them the value of staffing services. Will it be you?

Read Part 1

- David Searns

David Searns is president of Haley Marketing Group. For more ideas for growing your staffing firm, visit www.haleymarketing.com.

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