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Each industry has its challenges, and those challenges are usually amplified for start-ups. Each year, brave entrepreneurs put their reputations and personal resources on the line to start the business of their dreams. They create business plans and work hard to put together the funding they need. In most cases, they realize quickly that they will probably have to come up with the funding on their own. That means taking on a second job, selling off some family possessions and asking the household to cut back on spending to help make ends meet. Depending on what industry a start-up is based in, the growing pains can be moderate or they can be severe.
The staffing industry is one of the more challenging ones for start-ups to take hold in. There is so much to worry about with staffing that it can require years of planning just to get the company off the ground. In the end, you will find that the financial backers you thought you could count on are getting cold feet and your plans for opening your staffing business get pushed back even further. To top it all off, you are on your own with finding clients in an industry that is well-known for being extremely competitive.
Staffing Start-Ups Need To Worry About Labor Laws
Every company with employees worries about labor laws, but companies that contract out their employees have to be very careful when it comes to following the rules. When you are a staffing company, your customers will demand that you follow all of the labor and work safety laws set out by the local, state and federal governments. There could be hefty fines involved if the staffing company's employees are not following the rules, and those fines are usually absorbed by the staffing company.
These labor and work safety laws are much more prominent in certain industries. The construction and warehousing industries are very reliant on these laws as guidelines to hire employees and monitor job sites. Federal and state representatives often visit job sites to make certain that labor and work safety laws are being followed. Even if the staffing agency manages to avoid having to pay a fine, it is doubtful that the customer that had to pay the fine will ever ask that staffing company to provide it with personnel ever again. Every staffing company needs to be up to date on these laws and they need to know how to follow them.
Staffing Agencies Require The Latest In Computer Software
When it comes to billing, tracking costs and monitoring hours for a staffing company, nothing beats a good piece of computer software. In many industries, staffing agencies are required to use certain kinds of software to make billing easier for the clients. Investing in the hardware and software necessary to keep these programs running can be expensive, and that does not even take into account the personnel required to keep everything running smoothly.
Staffing agencies can also utilized computerized training to help keep its temporary staff members up to date on the latest requirements in their industries. Staffing organizations can also use Internet training to help train personnel on the specific needs of particular clients before that personnel goes to the work site. It also helps to have portable computing equipment and software to allow the staffing company to keep track of progress at each job site. The mobile computing apps that are available also allow on-site supervisors to send back detailed labor reports to the staffing company offices, which makes billing much easier and more accurate.
Start-Ups Find Funding Payroll To Be A Problem
In the first few months of a start-up staffing company's existence, it has the funds it needs to meet payroll obligations. But as the company starts to grow and the initial funding runs out, the staffing company will then start to rely on cash flow from invoiced sales to help meet payroll and pay other ongoing expenses. The problem is that the cash flow of a start-up is slowed by past due invoices that run 30, 60 and even 90 days past due. Clients expect their temporary staffing to be on-site and ready to work, but they sometimes have a problem paying the invoices generated for those services.
Slow cash flow is a fact of life that start-ups need to address as soon as possible. The problem is that banks are not always open to lending money to a start-up that has no credit history. The issue that is specific to staffing companies is that there is no tangible product being produced that the bank can use as collateral. The end result is that the start-up is either forced to take bank funding that has excessively high interest rates, or it has to consider refusing new work until it can get its cash flow up and going. There is another option that is much easier to work with and offers a staffing start-up the funding option it needs.
Receivables-Based Lending Is A Long-Term Funding Solution For Start-Ups
Start-up staffing companies that are seeing an increase in invoiced sales but slow cash flow actually have the resources they need to solve their funding problems. Those past due invoices to creditworthy clients represent assets that the company can use to get cash advances against the values of their invoices. 1st Commercial Credit is a receivables-based lending organization that can advance you the face values of your invoices, minus our lending fee, directly into your company bank account.
1st Commercial Credit is not a bank and we do not need to see your company credit profile to approve your account. We have the flexible funding services you need to turn your outstanding invoices to creditworthy clients into cash. We utilize the credit scores of your clients to approve your invoices, and that is how we are able to give a business line of credit to a start-up staffing company. As long as you have approved invoices to clients with credit in good standing, then you have the resources you need to stabilize your cash flow.
1st Commercial Credit Will Grow With Your Start-Up Staffing Company
Receivables-based lending is the kind of service your company can use as an ongoing source of funding, and 1st Commercial Credit is a world leader in lending to small and medium sized businesses in the staffing industry. We have billions of dollars in resources that we can concentrate on helping your start-up to meet its payroll obligations and gain financial stability. Once we have supplied you with the cash flow you need to get past the start-up phase, then we can help you transition to a successful organization.
Contact 1st Commercial Credit today and let us show you how we can be your long-term funding solution and how receivables-based lending is the answer to your cash flow problems. We take the focus off of your lack of a credit history and put it on your growing invoiced sales, where it belongs. Let us show you how your initial success is more than enough to get your start-up staffing agency where it wants to go.