How Staffing Agencies Can Use Factoring To Grow Their Business
Running an employment or staffing agency can be rewarding in more ways than one. You solve a need for both businesses and clients keeping everyone happy and the money flowing into your account. However, because your business relies on invoice payments, there are some months where cash can be scarce. When you find yourself in this situation, you may want to consider factoring as a short or long-term solution. Doing so may enable you to help survive these painfully slow months and even come out with some business growth.
Factoring Fills the Gap
Staffing agencies rely on invoices getting paid on time from the businesses whose positions they fill. Invoices typically have a 30-day window to pay, and it is during this gap that you may find factoring useful. Finding a factor company to purchase your invoices is the first step. Gathering all the information they need and negotiating the terms of their fee is the next. Finally, the company will send you the agreed-upon amount of money and take on the collection efforts directly with your clients.
More Stable Cash Flow Equals More Growth Opportunities
You aren’t in the staffing business to just survive; you want to grow. Being able to do so, however, requires a constant cash flow to support recruiting and advertising efforts. While online advertising may seem the cheaper option, the business you can drum up at conventions and through interactions with businesses may prove more valuable. The internet is a great place to target potential job seekers. Companies who need to hire them, however, may be better catered to in person. Factoring will make cash coming in more consistent and allow you to spend more time and money pounding the pavement, driving business. Growth begets profits.
Expansion May Become a Real Possibility
If you can grow your base of business clients, you’ll need to increase your pool of job seekers. If you can do those two things, you will also need to have offices large enough to accommodate all the new staff you have to hire. When factoring assists in making money flow more stable, you can not only think about expanding your customer base but also your base of operations.
Factoring is a helpful resource for any business who deals with invoicing customers. It fills the gap between services and payment. In the staffing business, this extra regular income stream can provide the resources necessary to expand and grow the business.