Myth Number 2: You need to generate funds from external sources

stick to the intended path through thick and thin. By having everything in written form, you have something to refer to that might have slipped from your mind.

Therefore, a business plan is more of a necessity than a luxury, particularly in today’s highly competitive staffing industry where you really need to be on your toes to compete with other firms targeting the same niche market as yours.

With that said, write down all your ideas, research your target market, study the competition, and by all means do some price modeling. There’s nothing wrong with doing so even if you have no one to give your business plan to.

MYTH NUMBER 2: YOU NEED TO GENERATE FUNDS FROM EXTERNAL SOURCES

If you plan to manufacture a product or want to directly start targeting a large consumer base, then you would need to secure a loan from external sources, such as investors or banks. However, a staffing agency is actually a service industry where you do not ‘manufacture a product’. In fact, you actually provide a service. In addition to that, most of the owners start their staffing agency on a small scale, sometimes even as a one-person operation. This annuls the need to generate lots of funds just to get the company started.

Whatever the case, you should try to avoid getting money from others for a number of reasons, including the following:

• Once you have taken money for your company, you’ve already started to sell it and that too at the lowest possible valuation. It is also likely that you are ‘selling’ your company to those who do not share your passion or vision; they just want to make more money. • Once you borrow money, you will probably need to take more of it later on. This is because the finances that you put together in the business plan to get the initial money would become inaccurate. When the incorrect financial assumptions come to fruition, you either end up shutting down the company or get more investments. Soon enough, you end up working for those who pumped in the money. • Starting a business with money that isn’t gained through revenue leads to bad decisions. You never know, you might end up buying expensive business cards, kicking off parties, flying first class, or perhaps hiring too many people. On the other hand, when you have little money or money that you have earned yourself; you will be more focused in spending it.

If you have to manage a float payroll, consider using a payroll funding company instead of ‘raising money’.