Brandie Jones began her career in the payroll and human capital management industry working in the corporate payroll department of a major pharmaceutical company, making sure more than 15,000 employees both nationwide and internationally, got paid accurately and on time. So, when she relocated and joined a CPA firm in her new town, she quickly zeroed in on multiple compliance issues that, if left unaddressed, ultimately could have cost her employer and its clients immeasurable damage both financially and reputationally.
“They just didn’t understand the structure of a fully compliant payroll operation, particularly when it came to pay garnishment,” Jones said. Her solution: She offered to purchase the firm’s book of payroll-related business and, with a mutually beneficial referral system already built in, launched Pittsboro, North Carolina’s Company Payroll Processing in 2014.
In the decade since, scores of payroll professionals have jettisoned the corporate world in favor of an entrepreneurial option – And with good reason. A recent report by the International Market Analysis Research and Consulting Group (IMARC Group) shows that the global payroll outsourcing market size reached $8.9 Billion in 2022 and is expected to surge to $12.1 Billion by 2028.
“Due to the expanding geographical reach of organizations, there is a rise in the demand for time-saving and cost-effective measures, such as payroll outsourcing, that allow the management to focus on core issues and run the business smoothly,” the report reads. “Moreover, the incorporation of digitized services, such as business analytics, big data and the cloud, is escalating the demand for payroll outsourcing across the globe.”
Those figures alone prove that there is plenty of opportunity to go around. But there are other benefits contributing to the trend:
Autonomy and control: One primary motivation for payroll professionals to go the entrepreneurial route is the desire for autonomy and control over their work. Large corporations often have rigid hierarchies, strict policies, and limited flexibility, which can stifle growth. The chance to shape their own futures, make decisions aligned with their vision and create a working environment that suits their preferences is a significant draw.
Enhanced earning potential: While large corporations offer stable salaries, they don’t always provide substantial opportunities for financial growth. Making the switch from employee to entrepreneur offers the chance to set one’s own pricing models and service menu, which can lead to higher profit margins and overall earnings.
Service Innovation and customization: Payroll professionals who establish their own firms also enjoy the ability to offer innovative and customized solutions to clients, and to choose the client niches they want to with. Large corporations often are bound by standardized processes and limited options that make no room for the tailored payroll and HCM services needed by certain industries like construction, healthcare and restaurants. Independent payroll service bureau owners can better leverage their expertise, stay updated with industry trends, and offer levels of personalization that larger firms can’t.
Work-life balance: Life in the corporate world invariably means long hours, heavy workloads, and ever-increasing stress. The freedom to have greater control over schedules, prioritize family time, and create a healthier work environment that aligns with personal values is a major contributing factor for many new payroll firm owners.
Intrigued? If you’re a payroll professional ready to take the reins of your own career, IRIS offers a few tried-and-true tips.
First, you’ll want to start by conducting some serious market research. If you plan to focus on serving clients in a particular geographical area, get a rundown of the competitors in your region. Find out what client niches they target, how they advertise and what they promote as their competitive edge. Similarly, if you want to target particular industries rather than a geographical region, learn all you can about those industries and the nuanced payroll products and services they’ll need. For instance, restaurants and other hospitality clients whose employees who make much of their income in tips need a different set of payroll and HCM solutions than office-based customers whose workers all are salaried. Also find out which of your competitors specialize in those client niches and study them so that you can develop your own, unique approach.
Once you’ve chosen your target market, create a detailed business plan that caters to that market and also encompasses your mission, vision, pricing strategies, marketing plans, and growth projections. A major element of your business plan must establish the legal and financial framework of your payroll service bureau. Registering your firm with your city, county and state, and obtaining the necessary licensure is the easy part. It’s highly advisable to talk with an attorney and accountant who can walk you through making sure your business is set up in a way that meets all requirements and regulations. This includes planning for the future with an expertly crafted exit strategy. After all, you’ll want to retire one day. A strategic growth plan helps assure that what your business does today will create a documented, high valuation when it comes time to sell
Any successful payroll service bureau owner, including Brandie Jones, will attest that the best foundation for growing your firm is choosing the right payroll software and technology platforms. After a hit-and-miss run through multiple options, she knew just what she needed to serve her clients and best her competition – A robust, cloud-based, customizable system that assured up-to-the-minute compliance, offered 24-7 remote access by employer clients and their employees and could stand on its own but also was compatible with popular related HCM and accounting software that clients may not yet be ready to part with.
“My IRIS representative showed me every bell and whistle. I saw a program that would allow me to expand from a handful of clients to hundreds, no matter how many employees each of those clients had. And I could do it without needing to add on employees of my own,” Jones said. “Shortly after I signed on, my client list doubled, and my revenue grew exponentially.”
Finding the right software solution also allowed Jones to expand into new avenues of business, including the thriving restaurant market in her area.
“Because of complicated compliance issues with tips and income recording, I didn’t feel comfortable with approaching restaurant clients before. I do now,” she said. “Where I didn’t have the capacity to grow [before], I can now make my business as big as I want it to be.
Once you’ve got a solid software and technology offering in place, you’ll want to start – and never stop – networking to build connections, establish partnerships, and land clients. Attend industry events, join professional associations, and engage in online communities to expand your reach and gain valuable insights. As you develop your clientele, focus on providing exceptional and tailored customer service that will assure you keep those clients long-term. Be proactive in checking in with clients on a regular basis so that you keep on top of what they need as their businesses grow and change, too. This allows you the opportunity to predict and meet their needs by upselling them on additional products and services in your technology platform’s suite. Also, remember that your best advertisement is a happy customer. Leverage those satisfied clients by asking them for referrals from among their colleagues and contacts
IRIS provides the payroll solutions you will need to boost your firm’s profitability and that can scale with you as you grow and your needs change. Contact us today to learn more about which IRIS payroll
solution is right for your new or growing business.
Schedule a personal demo to see the IRIS software solutions available to you.