Well, we’re still working from my list at “Let’s Talk Staffing” post. Blogging is no place for lists. This current list is just two posts ago, and already it feels like a piano on my back. It’s cramping my style. I want to write about the democratic protests in Iran, or Miley Cyrus, or a bunch of other things I know nothing about.
Talk to a small business owner, or anyone running their own P&L today, and the talk will be about available capital and cash flow. It won’t be about Miley Cyrus, although she is the one who keeps that biz owner’s daughters demanding new clothes. Nor will it be about Iran, that is CNN’s or the State Department’s problem, but certainly not theirs.
So let’s talk capital and cash flow instead. Remember what I like about staffing companies. They are about the least capital-intensive business you can find. Which is a darn good thing in an economic environment when even Fortune 500 companies cannot borrow money. Our staffing customers were smart enough to eliminate the need for a lot of capital based on the business they chose. Amen to that. You gotta love the entrepreneurial ingenuity of this country.
Word on the Street
What we hear from our staffing customers, just as you already know, is that they think a lot more about cash flow. People sometimes ask me questions about being an entrepreneur, which I was once in a past life. I tell them that you know all you need to know about being an entrepreneur or small business owner when have had the feeling in your gut of not having enough cash in the company bank account to make your next payroll. And you find a way to get it done. That comes down to cash flow, my friends, and I know I am preaching to the choir here.
One tricky issue about the staffing business, however, is that there are just not that many dials to turn in terms of improving cash flow. You can work hard and be diligent on A/R collections, of course. And you can stretch your staff a bit on payroll timing, but in general that is a very short term strategy because contractors really don’t appreciate banking the company.
One Secret to Improving Cash Flow
So what secrets do the best staffing businesses I talk to keep about improving cash flow? Here’s one. They have a relentless focus on developing a rock-steady client base. And the thing they work on more than anything else as a means to that end is being EXTREMELY RESPONSIVE on client requests.
Let’s face it. Your clients are always testing you. They always want better, faster service. And when the call to ask if you can fill a shift next week, or a couple shifts the week after next, we all know what they are going to do within a minute of hanging up the phone. They are going to call a competitor or two and ask for those same shifts to be filled from that competitor. Because ultimately they want someone, anyone really, to fill those shifts fast.
Which ultimately is why most of our staffing customers find us. They started out being really responsive to that open shift by sending an email or SMS text to a list of 10 staffers immediately to see who could fill it. As one staffing company owner explained to me over coffee one day, “I had 8 people want the shift. So I confirmed one and then had to send 7 a note saying you didn’t get it. Then I had 20 staffers, and I had to reply with a ‘no’ 15 times for every open shift. Pretty soon I could not be responsive to customers or with my staffers via email anymore. Too many messages.” So we provide real-time response to confirming shifts, anytime, anywhere via the internet. In short – online scheduling. Some of our staffing customers give their clients limited access to our system, so that the client can check online to see when shifts are filled. Short response time is an embedded part of the scheduling and business processes that flow through Shiftboard.
A Competitive Advantage for Staffing Agencies
The more responsive our customers can be with clients, the more steady their business is and the more often that client calls their firm first. Thus, we come full circle back to cash flow, because clients that come to you first inevitably give you more business and more predictable cash flow. And you better believe you will need it, because Miley Cyrus has all sorts of new fall and winter fashions your kids just can’t live without.