Investing in marketing initiatives such as social media, direct mail and paid advertising can help your staffing firm move the needle on building your client base. But if you’re trying to keep costs in check, marketing is often one of the first investments that gets cut from the budget.
Want to make marketing a priority next quarter? One factor that can affect your steady cash flow for marketing efforts is your firm’s payroll funding strategy.
The payroll funding choices you make for your business can support or hinder your marketing goals. When starting out, many staffing firms look to banks as a payroll funding solution. The problem is that this traditional financing option can cut your growth short by leaving you strapped for cash, stuck paying high interest rates or waiting during long application and approval periods. A bank may also decide to give you only a portion of the funds you requested. All of these challenges make it difficult to invest in growth areas such as your sales and marketing.
A small business credit card is another solution if your agency has cash flow issues. But credit cards come with serious downsides as well, including high annual fees, hits to your credit score and penalties for missed or late payments.
Instead, the key is for your staffing firm to look for payroll funding partner that is flexible, quick and simple to deal with, allowing you to focus your efforts on growing your business. Traits to look for include:
1.) Staffing industry specialization
Companies that specialize in payroll funding for staffing firms understand the unique challenges of the industry, such as the cash flow gap between when your clients pay your firm and when you pay your employees. They also tend to offer more flexible and faster payroll funding solutions, including shorter approval processes.
2.) Low interest rates
One reason payroll factoring companies are a great option for payroll funding is because they have lower interest rates than banks and traditional lenders. You also only pay interest on your accounts receivable invoices, whereas with a loan, you are probably paying higher interest and paying it on the entire amount. This means slower growth for your business while you pay off the interest.
3.) Full-service payroll funding services
Starting a staffing agency or growing a staffing agency takes a lot of time and attention from leadership, as well from as your managers. Want to free up some of your team to focus on marketing and business development? Find a payroll funder that offers back-office administrative services as well as funding. Outsourcing services such as filing payroll taxes and managing invoices will give your staff more time to network, develop marketing campaigns and even post new positions to the company blog.
Choosing the right payroll funding partner does more than support your company’s financial health. It can give you the freedom and flexibility you need to invest in the areas you need to grow.