The adage “if you build it, they will come” isn’t always true. Harold Leffall learned this the hard way. Leffall, 32, is president and CEO of Leffall Employment Agency, a three-year-old, Oakland, California-based employment agency that places technical, customer service and administrative personnel. Clients include Shell Oil Co. and Alameda County.
Prior to starting his firm, Leffall worked at Catholic Charities as a project manager until his five-year program lost its funding after one year. He was faced with the prospect of looking for another job or starting his own business. He had also just started graduate school to study business management.
Leffall had no prior experience in staffing, but a friend and some research convinced him that staffing was a major growth industry. It didn’t require a lot of start-up capital-$50,000-but Leffall didn’t have any savings and was denied loans by four banks. Frustrated, he took out a second mortgage on his home and obtained a loan for $25,000.
Ready to go into business, Leffall secured office space and prepared his marketing materials and business cards. And nothing happened.
“I thought that by doing research, opening an office and informing people, the phone would ring off the hook,” says Leffall. “For close to two months, no one called. I realized no one knew about me and I had no experience or contacts in the industry. So I started cold calling companies. That was really tough for me. I did this for two months and realized it wasn’t working.”
Leffall then became a member of his local chamber of commerce, which added credibility to his business and served as means of attracting clients. “We averaged five to 10 new clients per month just through my affiliation with the chamber and sending brochures to member companies.” His first-year sales were $27,000.
However, Leffall discovered he was underpricing his services. “I didn’t have the confidence to charge what everyone else was, but I got smart when I wasn’t making enough to pay the bills and restructured my pricing.” Revenues for 1998 were $596,000; he projects $1.5 million for 1999.
The strong economy and low unemployment rate have contributed to the growth of Leffall’s firm, but the competition for recruiting high-caliber, qualified employees is fierce. “Nine out of 10 companies use temporary personnel, and the trend is to hire them on a ‘temp-for-hire basis.’ This saves the expense of turnover and recruitment.” His firm, with three employees internally and 80 to 100 employees on assignment, is growing.
Leffall Employment Agency, 7700 Edgewater Drive, Suite 647, Oakland, CA 94621; 510-613-8080