Go After the High Margin Business

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Sep 10, 2014

Dear Barb,

We are a light industrial staffing firm and have been in business for 10 years. Two years ago, I heard you suggest that we consider business that is high margin. I didn’t take your advice and now our margins are decreasing and I don’t even know what the Affordable Care Act  is going to do to us.

Can you define what you meant by high margin business? I don’t know that I will be in business next year at this time, if our margins continue going south. Some of the big guys in our business are the ones who are responsible for driving rates down.

Tom F.
Cleveland, OH

Dear Tom,

When I suggest that owners climb the ladder or seek out higher margin business, I’m referring to the following:

  1. Placing the supervisors of whom you currently place;
  2. In the temp business, consider the higher margin, long term contract business in areas like IT, engineering, oil & gas, etc.

Imagine making the same profit on one contract engineer that you would make on 20 light industrial temporary workers. Most of your clients are probably giving you the low margin light industrial business because that is what they know you do. They then give the higher level business to one of your competitors. Inform your clients that you also place higher level skilled contractors. This should be reflected on your website and LinkedIn profile.

Barbara J. Bruno, CPC, CTS

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