In a recent webinar we hosted in conjunction with SIA, Advance leaders Jeanne Michaelides, Director of Client and Corporate Engagement, and Adam Stern, Senior Director and General Manager, talked with participants about being ready for “yes!” in their business. [more]
Ready for Yes?
If there’s one thing that’s certain about the staffing industry, it’s that things are always changing. Your business may experience a slow period one day, only to be inundated the next.
So it’s less about hoping your firm is prepared for demand when it happens, and more about always approaching your business with three key ingredients.
- Attitude toward Debt
- Financial Sustainability
- Planning and Reporting
Attitude toward Debt
We’ve found that women and minority small business owners often view debt as a weakness, while non-diverse male small business owners view debt as a necessary tool for growth.
These are general statements, of course, but we’ve seen a direct correlation between the success of a staffing firm and their attitude toward debt. The more a firm views debt as a part of growing a successful staffing business, the more likely they are able to make better, faster decisions for their firm.
We believe the true definition of financial sustainability is the ability to start, grow and maintain your business with both short- and long-term stability and a solid balance between risk and reward. Key components to this sustainability include access to capital, profitability and planning and reporting.
There are several ways to secure capital, all of which have positive and negative sides. Traditional loans can help to establish credit and have lower interest, but reporting can be difficult and there is typically a limit on how much capital can be secured. This type of borrowing usually has a shelf life for staffing firms, meaning that the fluctuation and demand in this industry are incompatible with long application times or loan limits.
Specialty financing may be a better option for staffing firm owners, since fees are simply a percentage of the invoice funded and there are typically no additional costs. Plus, many specialty firms provide additional support services and business expertise as needed.
Planning and Reporting
As much as the staffing industry can change from day to day, planning and reporting is still an essential component to long term growth and can help you make the right decisions when it comes to capital. In fact, even a very profitable staffing firm may require capital for strategic growth.
Knowing your numbers—from your accrual based financial statements to your financial projections to your basic operational reports—will help you prepare for both slower times and rapid growth.
Ultimately, the more you understand how debt can be of benefit to your business and how to build a solid foundation for financial sustainability, the more ready you’ll be to say “yes!” when opportunity presents itself.
Get more from the webinar by reviewing our slides, or contact us with questions on how you can prepare your firm for “yes!”