How to Start a Payroll Business
According to the U.S. Bureau of Labor Statistics, growth for payroll professionals is expected to grow by 12 percent by 2016. These individuals work with companies in all industries to administer payroll programs. Many small companies that don't have a human resources department require the expertise of these professionals. But before launching your own business, you'll need to get the required training, secure a business license and establish a solid client base.
- Difficulty:
- Moderate
Instructions
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1
Get training and certification. If you haven't worked in the payroll industry before, enroll in courses offered by the American Payroll Association. The association also offers certification, which will give you more credibility with potential clients.
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2
Apply for your business license. This can be obtained through your city's business department, which is usually at city hall. Complete the application and pay the processing fee, which ranges from $50 to $100.
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3
Create a business plan for your company. This plan should include details on marketing, operations and financial strategies. If you haven't created a business plan before, Bplans offers samples of business plans that are specific to payroll companies.
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4
Purchase the required equipment for your business. Starting a payroll business usually requires a computer, payroll software, a separate phone line, a fax machine and Internet service (preferably high-speed). When choosing payroll software, consider QuickBooks and Realtaxtools; both are regarded as user-friendly.
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5
Market your services to businesses. Choosing a niche will help you focus your marketing efforts. For example, you may want to market to small businesses with a maximum of 20 employees. Contact businesses that meet your niche criteria and set up meetings with the owner or general manager.
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1
Tips & Warnings
Consider targeting large payroll companies. Offer to handle overflow work for these companies when they're short-staffed. This may turn into a larger contract in the future. Just be prepared to sign a nondisclosure agreement, which prevents you from targeting their clients.
Seek the assistance of an accountant. For the first year of business, an accountant might be helpful. Once you get into the rhythm of operating your own business, you can take over.
