Staffing Agency

How Profitable Is A Staffing Agency? (Updated for 2024)

Pat Walls

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Updated: October 6th, 2024

How Profitable Is A Staffing Agency? (Updated for 2024)

So you want to start a staffing agency?

And the first question that came to your mind was, “well, are staffing agencies actually profitable?”

Especially considering:

You could start a staffing agency with as low as $300
Based on our data, staffing agencies generate an average of $4.84M per year

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a staffing agency.

Let’s dive in!

Is a staffing agency profitable?

Yes, a staffing agency is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $4.84M per year with an estimated gross margin of 60%, you could expect to recover your investment within 9 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your staffing agency.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your staffing agency is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a staffing agency worth it?

If you’re wondering if a staffing agency is worth it, the answer is a big YES. With staffing agencies, you have the potential to earn $4.84M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a staffing agency to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful staffing agencies case studies.

Examples Of Profitable Staffing Agencies

Here are a few examples of profitable staffing agencies, and a few more details about them:

1. Devrize ($240K/year)

Jacob Fiore, the founder of a recruiting business called devrize, developed the idea for his business while working in the investment industry. He wanted to start a side hustle that aligned with his desire for endless financial gain, geographical flexibility, and control over his schedule. Recognizing the low barrier to entry in the talent acquisition industry, he started devrize as a contingent recruiter, focusing primarily on software engineering roles for venture capital-backed startups.

Is it profitable? Yes
How much money it makes: $240K/year
How much did it cost to start: $400

We Niched Down In The Recruitment Space And Are Generating $20K/Month In Revenue

A recruiting business founder shares how he found success by zeroing in on a specific niche (software engineering) and offering enticing referral bonuses ($8k for successful hires), resulting in 50% of placements coming from referrals and yielding $302,100 in revenue in Year 1.

Read this case study

Read by 2,152 founders

Learn more about starting a staffing agency:

Where to start?

-> How much does it cost to start a staffing agency?
-> Pros and cons of a staffing agency

Need inspiration?

-> Other staffing agency success stories
-> Marketing ideas for a staffing agency
-> Staffing agency names

Other resources

-> Staffing agency tips

How much can you make with a staffing agency?

With a staffing agency, you can make an average of $4.84M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $300. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 9 months.

How much does a staffing agency make a week?

Based on our data, average weekly revenue for a staffing agency ranges around $101K. As such, you could see monthly revenues of $403K.

To know if your staffing agency achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your staffing agency.

How much do staffing agencies owners make?

The income of a staffing agency owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established staffing agency is about $101K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a staffing agency owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Staffing Agency Profit Margins

Generally speaking, a staffing agency can expect profit margin of around 60%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a staffing agency, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, staffing agency owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, staffing agency owners can ensure long-term sustainability and profitability for their business.

Staffing agency owner salary

The salary of a staffing agency owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established staffing agency, in a prime position, might see an average weekly salary around the ballpark of $60.5K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a staffing agency may be a promising business to start - but the success of your staffing agency mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable staffing agency.

Part of

Starting A Staffing Agency: Everything You Need To Know

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