SI Review: June 2011

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You Ask, We Answer

Growing Concern

How fast does a new staffing firm typically grow?

We are a healthcare staffing firm just starting out. We’ve been in business for a year. Typically, how long does it take for a company like ours to get to a significant size?

—Wondering in Wisconsin

Dear Wondering,

Research at Staffing Industry Analysts has found that most new firms remain in the less-than-$2.5 million range for the first several years. However by year five, only about a third are still in that category of sales, and by the seventh year of operation fewer than one in five are still in that boat. Staffing firms sometime refer to the "$10 million barrier," so if by significant size you mean that mark, it can take awhile. Only about 20 percent of firms have made it to that level of sales by their fifth or sixth year.

Happily, though, profitability comes much faster. Three out of four firms are profitable by the second year, and a third are actually profitable in the first. So regardless of how big you are today, profitability — if you are not already there— is around the corner.

Good Luck.

Editors at SI Review

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Please send us your questions or letters commenting on any articles/staffing issues to editor@staffingindustry.com. We welcome your queries and feedback. SI Review editors will do their best to provide the most up to date information. We hope that this department, You Ask, We Answer, will prove useful and help you grow your business or do your job better.

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