Human resources is an important function for any business, ensuring that the company has a team that can contribute to the company’s success. If you’re an HR professional and considering going out on your own to form your own HR business, you have a great opportunity to help both businesses and job seekers.
But starting an HR business is a process. Here we’ll cover the steps involved to get you on the path to HR success.
Determine Your Services and Pricing
First, you need to determine exactly what services you want to offer. This should be based on your skill set, unless you plan to hire employees to provide certain services. If you’re not hiring employees and going it on your own, you might want to focus in one area such as recruiting.
Make a list of what you’d like to offer and consider how you would manage servicing your clients. You’ll need to consider your time, and how many clients you could provide those services to on an ongoing basis.
Then you need to determine how you’ll price your services. This will involve researching your local market so that you can set prices that will be competitive.
Define Your Brand
Brands have their own identity, so you need to think about what you want your brand to reflect. Consider what you want potential clients to think and feel when they hear about your company. Then create a mission and vision statement for your business. These elements should help you to write down a description of your brand’s personality.
Here’s an example:
NatureGrove Organic Foods is more than just a company; it’s a commitment to a healthier, sustainable lifestyle. Our brand identity embodies our core values and sets us apart in the organic food industry. NatureGrove Organic Foods is a lifestyle choice rooted in organic purity, sustainability, and a commitment to fostering a healthier, happier world. We invite you to join our community and experience the goodness of nature in every bite.
Choose Your Business Name
Your business name is extremely important, since it’s the first impression potential clients will have of your HR company. Your name should reflect your brand’s identity, which is why that step came before choosing your name.
If you read back through your brand identity description, you’ll likely find words that you may want to use in your business name. Brainstorm a few potential names, write them down, and get feedback from friends and family. They can offer a unique outside perspective that may be helpful.
Once you have a few possibilities, you’ll need to make sure they’re available to use. To check a business name for availability, visit your Secretary of State’s website to do a business name search.
If they pass that test, check for trademarks on the names by visiting the USPTO website.
Create a Business Plan
No business can be successful without a solid plan. A business plan is like a roadmap for you to follow, defining how your business will operate and your strategy. Creating a business plan is also a learning process because you’ll have to research and think through every aspect of your business.
You’ll also need a business plan if you plan to obtain financing for your HR business at any point.
A business plan has several sections.
- An executive summary that summarizes the full plan, highlighting the opportunity and the strengths of your plan.
- A business overview that describes your vision and mission, and your short and long term goals for the business.
- A description of the services that you’ll offer, how you’ll deliver those services, and your pricing model.
- A summary of the market in your area, including the size of the market and an analysis of your competition.
- A sales and marketing plan and strategy. This should be very specific. Keep your brand identity in mind when you create your strategies, as all of your marketing should reflect that brand identity.
- An operations plan, which means the specific tasks that you’ll complete on a daily basis to keep your company running.
- A management and personnel plan, meaning who will manage certain functions in the company and what employees you’ll need to hire. This may be just you at this point, so include information about your qualifications.
- A financial plan that includes your startup costs, and revenue and cost projections for three to five years.
If you need assistance with creating your plan, your local small business development center can be a great resource. They often have mentors that can assist you with strategies for your business, and with the plan itself.
Form a Business Entity
If you’re starting your HR business by yourself and you don’t form a business entity, you’ll be operating as a sole proprietorship by default. If you’re starting with a partner, you’ll be a general partnership. In both scenarios, you (or you and your partner) and the business are considered one and the same, which means that you will be personally liable for the debts and obligations of the business.
Many business owners instead choose to form a limited liability company (LLC). An LLC is a separate entity from its owners, which means that the owners have personal liability protection. The LLC is solely responsible for its own obligations.
An LLC is also a pass-through entity for tax purposes, meaning that profits pass through to the owners of the business and are taxed at their personal tax rate. The LLC itself does not pay taxes.
An LLC also offers considerable management flexibility, unlike a corporation which comes with many more rules and complexities.
Set Up Your Technology
Now you’re ready to set up shop, so to speak. You’ll likely need various types of HR software, as well as access to job boards. You’ll also need to set up your company website so that potential clients can find you online.
It’s time to launch! You can start to implement your marketing plan and take on clients. If you’ve followed all the steps, you should be well prepared, so you can hit the ground running toward HR business success!
HR Future Staff Writer.