Creating my own agency

Michelle Rhodes, MSN, RN · Feb 2, 2017

I can help you. Lets connect.

NedRN · Feb 3, 2017

What do these agencies REALLY make off of a contract for an RN?

The industry average gross profit margin (everything not paid to the travel nurse) is a little more than 25% right now, but 35% plus is not uncommon, especially for larger agencies with higher overhead. Thus you will gross 50% more (do the math the other direction) bypassing other agencies just based on that number. However, you are also only negotiating for one profile, yours, and don't care about employing other travelers. Thus you can often negotiate a higher bill rate than most agencies depending on the strength of your profile and your specialty (and facility need and a few other variables).

I'm not clear why you ask about locums/techs. Do you have some ambition to be more than a one person agency? Locums deliver a higher gross margin - or so I read on agency financial disclosures. Techs like an OR tech are not really worth pursuing other than as a service to your clients. The reason is that while you may be able to make the same margins, the bill rate is much lower so your total profit will be lower on the same amount of work.

It is a little harder now to get contracts with the upswing of vendor managers who control a large percentage of all open job orders. It may be more difficult to get a contract with them (and negotiating opportunities will be less) than a direct hospital contract. That said, most facilities do not have a vendor manager.

Not much in the way of legal stuff. It is best to have a corp or LLC but that takes only a few minutes and is dead cheap in most states. You also need to prove that you carry general and malpractice liability (1/3 million is the usual requirement) and workers comp. That is pretty much it! Low barrier to entry as they say in the business world, which is why you see so many new agencies every year.

Effectively, you are only paying the traveler. You are not providing the workplace, nor the oversight, nor even making the decision to place. That is all on the facility, and while they offload the insurance requirements on you, you don't have the kind of legal exposure the facility does.

Sent you a link to some reading material that should get you most of the way there.

AM9160 · Feb 3, 2017

Actually, yes I am working with another person who is not a nurse, but knows the business and my husband to place nurses, I have about 3-5 that would like to leave their agencies and work with me if I can get up and running. I would love to as a 3 year plan get into locum tenens for midlevels and physicians as well as RNs. There are a lot that I know of that want to do per diem but don't want to be committed to the facility (myself included) and would like to have the freedom to go where they want.

My biggest hurdle right now is getting funding to get what I need up and running. After that would be who to talk to at the hospitals and how to talk to them to get what I want.

NedRN · Feb 3, 2017

You shouldn't need funding as your total startup costs will be under a thousand dollars. Now if you need to float a payroll, yup, that requires a good bit of capital. However if your friends are willing to wait until you are paid to get paid (30 days is standard) in exchange for more money, then you don't need to float anything.

Per diem is a ton of work! You will need to staff for 24 hour phone answering, and then finding someone free to work the shift. The costs of operation will be much higher. I don't have any experience in per diem, but I'm sure it doesn't scale like travel. With travel, you can grow slow. Not sure you can do that with local per diem. If you cannot supply enough nurses, a hospital may not give you a contract or cut you later as a vendor. It is certainly something I would be reluctant to try even with my actual experience staffing travel contracts.

AM9160 · Mar 2, 2017

So I am going to get my husband to be the "voice" of this, BUT he is not in the medical field AT ALL. I was trying to sit down with him and "train" him so to speak about what he needs to say when he calls these HR/Staffing people for contracts. Except, I myself also do not know what I am saying to these people to place someone in an open position. I know that the positions around the country are the same ones that pretty much every travel company has, so it's just a matter of looking on their websites for the positions. But what does one say when they call to discuss placing a nurse? What does HR ask? I know its a lot of cold calling too, but why would a hospital contract with someone new? Or do they not care just as long as they have a profile?

NedRN · Mar 2, 2017

You certainly do not need healthcare experience to talk to HR or staffing. Calls are simple and short. Unless the manager already wants you, or you have a difficult to fill specialty, the first response will be that "we have enough vendors, or we use a prime vendor"@". Only if you meet one of those criteria, not much to talk about. If you do, provide a profile and they will confirm it with the manager. After that the discussion will just be your contract or ours, any changes to the terms, and the Bill rate.

LadyCNM · Mar 15, 2017

Hi!

I am also interested in starting an LLC and respresting myself as a nurse midwife. Could you please send me the informational links that may help me get started. Many thanks.

Tneo8385, BSN, RN · Mar 15, 2017

Me too please

NedRN · Mar 15, 2017

Tneo8385: there is some unspecified problem with your account and I could not reply to your PM.

However, here is what you all need to find my blog about starting a single person travel company: Search Google with my screen name and independent nurses. After navigating to that site, look for FAQ or search for 108.1.

Tippyrn · Mar 18, 2017

I would work for you

NedRN · Mar 18, 2017

Well, thanks. But I don't recruit.