How to Start a Payroll Management Company
Payroll management companies work with businesses in a variety of industries to take care of employee payroll. Some payroll management companies decide to specialize in select industries, while others assist clients from across all industry sectors. These individuals serve as a resource to small business owners who don't have a formal HR or Payroll department. But before launching a payroll management company, you'll need to secure the required training and a business license and build clientele. Here's a guide to launching a payroll management company.
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Instructions
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Seek payroll training and certification. If you don't have much experience in the payroll industry, you can take advantage of courses offered by the American Payroll Association. This organization also offers certification programs for payroll professionals, which adds more legitimacy to your business.
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Determine where you'll operate your payroll management company. Some professionals set up a home office and primarily meet with clients via conference call. Determine where you'll work, and purchase the required equipment such as a computer, payroll program (like QuickBooks or Real Tax Tools), office phone, fax machine and an Internet provider.
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Create a business plan for your payroll management company. If you haven't created a plan before, check out templates at Bplans (see Resources). This will assist in planning marketing and operating strategies for your business.
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Apply for a business license. Before securing your first customer, you'll need to apply for a business license at your city hall department. Once you submit the application and processing fee (which is about $50), it takes a few weeks to process.
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Generate clients who need payroll services. Evaluate what types of services are currently being offered in your marketplace. For example, contact local payroll companies to determine who they're targeting. Look for underserved markets, such as start-up companies or larger payroll companies who need an outsourcing option for overflow. For smaller companies, contact the president or founder, and for larger companies contact the office manager to set up a meeting.
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Tips & Warnings
Don't forget to create basic marketing materials. When starting a payroll management company, create a simple flier or brochure with information about your services and pricing structure. Also, create business cards that you can leave with potential clients.
Save enough living expenses for your first year of business. Generating clientele takes time, and having living expenses banked will reduce some of the pressure.
