How to Start a Payroll Services Business

Payroll services can be profitable with proper attention to details.

If you learn the rules, obtain an appropriate payroll computer software program and never fail to perform the required tasks properly and on time, you can start and operate a profitable payroll services business. The business, though not difficult, requires consistent attention because employees must get their payroll checks on time and businesses must submit their tax payments on time. You will be competing with large businesses in this field that have many sales and production workers and years of experience.

Things You'll Need

• Computer program
• State and federal forms
• Financing

Instructions

Develop a Plan, Raise Funds and Start a Successful Payroll Business

1. Develop a plan that will assist you in deciding on the best ways to conduct your business and raise financing. Determine what facility you need, where it should be located and what equipment and furniture it requires. If you decide that finding clients is important for you to do, the payroll tasks will necessitate hiring staff. Describe the procedures needed to ensure all the payroll checks, accounts and forms get done perfectly and in a timely fashion. Decide what you will do to keep your clients informed of your systems, so they know what they must do each pay period to facilitate your work.

2. Create a financial plan for start-up and continuation funds required for your new business. If you prepare a loan package, in addition to the operating plan, indicate what equipment, site, labor, and sales and marketing costs will be encountered before income is expected. You need a cash flow analysis to show how long it will take before profits begin to exceed expenses and what funds you need during that period.

   You may choose to seek investors instead of taking loans. Some entrepreneurs prefer to raise the required funds from their own savings.

3. Establish a realistic marketing plan. This is probably the most important ingredient for a successful payroll services business. Several large, well-established payroll service companies are your competitors, so you need a strategy for finding clients who don't presently use one of these companies. Contact employers who do their own payrolls. If you can charge them less than it costs them to pay their own staff to do payroll, you may convince them to outsource the work to you.

4. Find small businesses that pay an accounting firm to do their payroll. Explain to the accounting firms the reasons why they would benefit from having you take on their clients' payroll services.

5. Get all the immediate parts of your plan in place before you take on your first client. You will be marketing your reputation and cannot afford to make a mistake or miss a deadline.

Tips & Warnings

• Payrolls tend to group at the beginning and middle of a month. Taxes also become due on a fixed schedule. Plan your employees work time accordingly.

References

• Yahoo: Payroll services-a lot for your money

Resources

• Ohio State University: Payroll set-up and reporting