How financially secure is your recruitment firm?
Owning a staffing firm comes with a ton of responsibility – and making payroll might just be the most stressful of them all, especially if your agency is in its start-up or growing stage.
The risk of not being able to pay your hard-working employees on time, coupled with the scary (and common) potential of debt accumulation make having sufficient and on-going access to funds more critical than ever.
So, why would any smart staffing agency owner put their company and finances at risk if there was a way they could avoid that? Simply put, they wouldn’t.
Why Outsource Payroll Funding?
Outsourcing payroll funding allows a growing staffing agency to gain the financial protection and security that a bank loan simply can’t provide. It’s common for a bank to deny new or smaller agencies a loan, and if an agency IS granted a bank loan, it’s typical for the loan to take several weeks or more to come through (compared to as little as a day with outsourced payroll funding). Then, there’s the issue of the cap placed on a bank loan – whereas payroll funding offers a potential for unlimited funds.
With that said, it’s vital that the owner of a new or growing staffing firm in Canada ensures he or she can depend on continuous financial aid; risk-free. Here are three reasons why smart staffing agency owners choose to outsource payroll funding vs. any other financing option:
1. Payroll funding prevents debt accumulation.
Let’s face it: debt can accumulate rather quickly for a staffing agency working on establishing itself in the marketplace. In a Financial Post (2018) article, Canaccord Genuity Group Inc. portfolio strategist Martin Roberge reports that “Canadian companies have a record 60 US cents of debt for every dollar of sales that they generate, compared with about 35 US cents of debt per dollar for U.S. companies”. Yikes.
So, with Canada’s combined corporate debt already at a concerning low, this might help to put into perspective how critical having continuous, sufficient funds is for your growing staffing agency. And thankfully, unlike with bank loans, payroll funding doesn’t create debt for you.
2. Payroll funding provides you with a continuous cash flow for financial security.
It’s difficult to know exactly when your clients are going to pay you – it can range from weeks to months. This is something that is always going to be unpredictable in your business, and certainly stressful since it plays a key role in your meeting payroll every week.
By outsourcing payroll funding, you can be confident that you’ll have enough capital to pay your valued staff on time, every time – no matter when your clients decide to pay you.
3. Payroll funding allows your staffing agency to grow and succeed.
Recruitment agency owners must constantly ensure that their company has the financial means to take on new clients, and payroll funding will take care of this. A payroll funding service that provides for staffing agencies also has a keen understanding about the importance of steady finances in your field of work – which isn’t even comparable to that of a bank.
Don’t become a part of the failed business statistic…
It’s common for the owner of a new or growing staffing firm to underestimate just how much funding they’ll need to operate a successful business. But the bottom line is, you’re going to need ongoing financial security that is CRUCIAL in order to stay afloat. Fortunately, outsourced payroll funding will serve as the support your business needs to stay competitive and thrive (and believe us – you’re going to need it)!