How to Start a Temp Agency

Temp agencies provide temporary employment services for employers within several different industries. The temporary employees who meet the employer's requirements are sent on assignment based on the needs of the employer. If the employer decides to permanently employ the temporary employee he or she completes paperwork with the temp agency and pays a fee to the temp agency. 

1. Temp agencies provide temporary employment services for employers within several different industries. The temporary employees who meet the employer's requirements are sent on assignment based on the needs of the employer. If the employer decides to permanently employ the temporary employee he or she completes paperwork with the temp agency and pays a fee to the temp agency. Obtain the required educational background. Generally you are required to possess at least a bachelor degree in human resources. In some states you are required to possess a master degree in human resources or business administration. 


2. Apply for a business license with your local licensing board. Determine whether this local licensing board has further requirements other than the application for the license. In some states you are required to present a business plan with your application and applicable fees. 


3. Obtain an employer ID from the federal office of the Internal Revenue Service. You are required by federal law to obtain this employer ID in order to file your income taxes and to make deductions from your employee's paychecks. 


4. Secure funding for your temp agency from investors and/or a financial institution. Receiving capital from investors depends greatly on the impression you make and how well you present your business plan. Receiving funding from a financial institution depends greatly on your meeting the requirements for a small business loan. For this reason you should ensure that your finances are in order and you possess a credit score of at least 750. 


5. Work with a real estate agent to locate and secure a location for your temp agency. If possible purchase a location that was previously used as a temp agency. If you have the opportunity to purchase this existing structure it is possible for you to save on equipment and/or furniture. This strongly depends on what is included in your purchase. Discuss all of your options with your real estate agent before making a final selection. 


6. Set up your temp agency and secure clients. Once you set up shop begin building your client base. For most successful temp agencies representatives and/or employment counselors generally cold call companies to determine which employers need temporary employees. These temp agencies also place ads to attract employers with temp needs. Once a client base is established the temp agency places ads for employees in local newspapers and job boards.