How to Start a Medical Staffing Agency
- Aditya Mangal
- Aug 25, 2024
- 6 min read
Updated: Jan 30
By 2030, 21% of America’s population will be aged 65 and older. While this demographic shift isn't inherently alarming, it indicates a growing demand for healthcare and caregiving services. This makes now an ideal time to start a healthcare staffing agency.
The U.S. will need approximately 2.3 million additional healthcare professionals to cater to the needs of its aging population. Healthcare staffing agencies are likely to play a critical role in meeting this demand. Supporting this view, the current healthcare staffing market, valued at $23.6 billion, is projected to grow by 5.6% from 2023 to 2030.
Whether you're focused on nurse staffing, certified nursing assistants (CNA), or medical billing professionals, the need for healthcare staffing agencies is rising. If you have the capacity to supply healthcare workers to hospitals and medical staffing software facilities, starting a healthcare staffing agency could be a lucrative business opportunity. While entering this industry may have a low barrier, having the right information is crucial to establishing and expanding your agency. This article outlines all the steps you need to start your medical staffing company.
How to Start a Healthcare Staffing Agency
Starting a healthcare staffing agency might seem intimidating, but it’s a straightforward process when broken down into manageable steps. Follow the steps outlined below to become the owner of a healthcare staffing agency!
1. Select a Niche or Specialty
The healthcare staffing industry offers various niches and specialties, similar to the broader medical field. Initially focusing on a single area of medical staffing is often more manageable, allowing for specialization as your agency grows. For instance, some agencies focus solely on essential healthcare providers like nurses and doctors, while others cater to allied healthcare professionals such as anesthesiologists or sonographers. Starting as a generalist can delay client acquisition and result in lower income.
If you’re a healthcare professional considering starting a staffing business, it’s best to specialize in an area where you have significant experience. This allows you to leverage your expertise to attract clients and, if necessary, independently contract your own services.
2. Define Your Service Offerings and Set Pricing
Clearly defining your service offerings and setting competitive pricing is essential for building a successful candidate pool. Decide whether you’ll offer full-time, contract, or a combination of staffing options. Make sure your pricing accounts for payroll, insurance, taxes, business operations, and other potential expenses. Typically, a markup of 30-50% can cover these costs, but it’s important to calculate precisely and tailor your services and pricing accordingly.
3. Register Your Business
Every business must be registered as an official entity. Decide whether to operate as a sole proprietorship, LLC, partnership, or corporation, then check local regulations to understand the necessary documents and requirements. Each state has its own laws, so researching state-specific guidelines is crucial for proper business registration. After registering, keep your documentation and Employer Identification Number (EIN) handy for other business-related processes.
4. Open a Business Bank Account
Once your medical staffing business is registered, open a dedicated business bank account. This will help you track income and expenses, enabling you to monitor your agency's financial health. When choosing a business checking account, consider factors like the minimum opening deposit, monthly fees, interest rates, transaction limits, customer support, and additional perks like sign-up bonuses or cash back offers. Ensure the account is in your business name, not your personal name.
5. Develop a Unique and Professional Brand
Maintaining a professional image is crucial for any business, which includes creating a strong brand and a compelling online presence. Prospective clients will often search for your business online, so your digital footprint should accurately reflect your brand values and service offerings. Investing in a user-friendly website with attention to graphic design, layout, imagery, and color scheme is essential. You can either use platforms like Wix or WordPress to build the site yourself or hire professionals for a more tailored approach.
Related: How to Develop a Marketing Strategy for Your Staffing Agency
6. Establish a Payment Process
To streamline your operations, establish a clear process for receiving payments. Options like PayPal, Square, or Stripe can be integrated into your website for online payments. Alternatively, clients can mail checks or initiate ACH transfers. Several staffing-specific staffing on demand staffing solutions, such as Akken Cloud and Avionté, also offer billing and payment features. Whatever method you choose, having a solid billing process in place will ensure smooth financial transactions once you acquire clients.
7. Build Your Client Base
A business thrives on its clients, so actively reaching out to healthcare managers and executives responsible for hiring medical staff is key. Given the demand in the healthcare field, this proactive approach can help you secure your first clients. Regular outreach will help you grow your client base, allowing you to begin staffing healthcare facilities.
8. Recruit Qualified Candidates
To find healthcare professionals, leverage platforms like LinkedIn, job boards such as Indeed, and healthcare conferences and events. Once you've gathered a list of potential candidates, screen and interview them to find the best matches for your clients' needs.
Pros and Cons of Starting a Healthcare Staffing Agency
As with any business, starting a healthcare staffing agency comes with advantages and disadvantages. Here are some key pros and cons to consider:
Pros | Cons |
Improving access to healthcare, especially in underserved areas | Recruiting for highly specialized roles can be challenging |
Helping bridge the gap in the healthcare workforce shortage | Staffing healthcare professionals can be costly |
Greater job flexibility and the ability to manage your own business | Building a client base can be difficult initially |
Opportunity to enter a lucrative market | Navigating accreditation and licensing requirements can be complex |
Pros
Enhanced Access to Healthcare: Launching a healthcare staffing software helps improve access to medical services, especially in rural areas facing staffing shortages.
Addressing Workforce Gaps: Agencies can help close the healthcare staffing gap by recruiting professionals from other regions or even internationally.
Business Flexibility: Owning a staffing agency offers the freedom to set your own hours and work remotely.
Lucrative Market Potential: With the medical staffing industry valued at over $20 billion and growing, there is significant earning potential.
Cons
Accreditation and Licensing Challenges: Complying with accreditation and licensing requirements, especially for out-of-state placements, can be difficult.
Technical Recruiting Difficulties: Finding qualified candidates for highly specialized roles can be time-consuming and complex.
Higher Staffing Costs: Competitive pay in the healthcare industry means that staffing can be expensive.
Client Acquisition: Establishing a robust client base can be challenging in the early stages.
Staffing Agency Financing: How to Secure Funding for Your Business
Even after following all the necessary steps to start a medical staff agency, financing can be a significant challenge. First-time business owners often struggle to secure traditional bank loans due to a lack of business credit history. Fortunately, there are alternative financing options available.
If you're ready to launch your nurse staffing agency but are uncertain about funding, consider the following options:
Crowdfunding: Raise funds from individual investors online in exchange for equity.
Grants: Seek grants from government bodies, corporations, or foundations, such as those for minority entrepreneurs, women-owned businesses, or innovative projects.
Invoice Factoring: Sell your unpaid invoices to a factoring company for immediate cash, receiving up to 80-90% of the invoice value within 24 hours.
Business Line of Credit: Similar to a credit card, this helps cover ongoing expenses with flexible borrowing limits.
Private Investors: Look for investors interested in your business, offering funding in exchange for equity and advice.
Traditional Bank Loan: While challenging to secure for new businesses, bank loans can support growth and expansion.
How Invoice Factoring Can Benefit Your Business
Invoice factoring is a popular financing option for staffing agencies. Maintaining strong cash flow and sufficient working capital is crucial for agency success, and factoring can help achieve these goals. By partnering with a factoring company, you can outsource accounts receivable collection. The factoring company advances 80-90% of the invoice value, ensuring immediate cash flow. Your clients then pay the factoring company directly. Once payment is received, the remaining invoice value is released to you, minus a small fee.
For more information on invoice factoring and to see if it’s a good fit for your business, fill out our online factoring quote form or call us at (205) 607-0811. At altLINE, we’ve helped clients factor over $1 billion in invoices over our 88 years of service, supporting their business growth objectives.
Comentarios