How to Start a Nurse Staffing Agency

July 3, 2020 •

The US needs more nurses. We’re in the midst of a nursing shortage. And with more than 1 million RNs expected to retire by 2030, that demand is only going to grow.

When it comes to finding and hiring high-quality nursing personnel, hospitals need all the help they can get. So, if you’re looking to open a nurse staffing agency, you’re entering the market at the perfect time. But, before you can start, there are several steps you must first take, including:

  • Building a business plan
  • Registering the business
  • Acquiring proper medical staffing insurance 
  • Creating a website 
  • Subscribing to drug screening services

Wondering what all of this entails for your staffing agency? Let’s discuss. 

How to Start a Nurse Staffing Agency

Legal requirements and licensing vary on a state-by-state basis. Before you dive in, be sure to check with your local and state licensing agency to see what’s required to become operational. 

Once that’s done, you’re ready to build out a business plan for your staffing company.

Create a Business Plan 

If you’re asking “how to open a nurse staffing agency,” one of the initial tasks will be to create a business plan. It will function as a roadmap that you can use to inform your decisions and attract potential investors. The business plan should outline the management and organizational structure. It will also contain the following sections: 

  • An executive summary – Defines the business and describes the nursing agency model. 
  • Company description – Covers what you will do, how you’ll operate, and your general goals for the agency. 
  • Services – Explains your unique value proposition, highlight your goals, and help distinguish you in the marketplace. 
  • Operational plan – Discusses how the business will operate, both in a micro day-to-day level and a macro long-term picture.  
  • Marketing plan – Establishes your target market and competitors. It will then detail how you plan to reach new customers and build the staffing firm. 
  • Financial Plan – Covers your KPIs, expenses, budget, and cashflow. 

Register the Business 

Once you’ve done your due diligence, it’s time to register the business for tax purposes. Most nurse staffing agencies register as a limited liability company (LLC), which is “a business structure in the United States whereby the owners are not personally liable for the company’s debts or liabilities.” 

After registration, you’ll receive a tax identification number that you will use for paying taxes and employee withholding. 

Get Insurance 

All it takes is one liability claim to put your business’ future in jeopardy. But you can prevent this by protecting your staffing company with the right medical staffing insurance policy. 

For a nurse staffing agency, there are four primary types of insurance that you simply can’t risk operating without, as you may encounter various nurse staffing issues from time to time. They include:

  • Workers’ compensation – Having a workers’ comp policy is a legal requirement in every state but Texas. It protects your business and its employees in the staffing industry from work-related injuries or illnesses. Should a mishap occur, this policy can help cover:
    • Hospital bills
    • Rehabilitation and post-incidental care
    • Disability
    • Lost wages and ongoing payroll
    • Funeral expenses
  • General liability insurance – A general liability policy safeguards your healthcare staffing agency from the risk of third-party bodily injury or property damage. It can help cover:
    • Medical expenses
    • Property damage
    • Attorney fees
    • Court costs
  • Professional liability insurance – Also known as errors and omissions insurance, this helps cover damages resulting from claims made against the work you performed, including:
    • Negligence
    • Misrepresentation
    • Inaccurate advice 

For instance, if a hospital hires a registered nurse from your agency and that nurse steals from the healthcare facility, professional liability insurance could help shield you from the consequences of the employee’s actions. 

  • Cyber liability insuranceCyber liability insurance protects your business should a data breach occur resulting in the loss or theft of a client’s private information. It can help cover:
    • Customer notification 
    • Restoring personal identities
    • Recovering data
    • Repairing damaged systems  

Build a Website 

Your website is your most powerful marketing and recruiting tool when operating in the staffing industry. Even if you know nothing about coding, there are dozens of web builders that allow you to create mobile-responsive websites and bundle them with domain and hosting services to better connect you to qualified healthcare professionals.

As Forbes says, “To deliver digital results, a website must offer an engaging, dynamic user experience.” To accomplish this, keep in mind the following as you build out your site: 

  • Apply search engine optimization (SEO) practices sitewide 
  • Create and regularly publish a blog to build thought leadership that will attract well informed healthcare professionals and skilled nursing personnel
  • Make the site easy to navigate and visually appealing
  • Include all of the information regarding what every registered nurse should know about staffing process and how you plan to meet the staffing needs of healthcare facilities

Screen Your Nursing Candidates  

Once your i’s are dotted and t’s crossed, it’s time to start recruiting talent. But you shouldn’t enlist anyone without first having them undergo a background check and drug screening. 

Since screening laws vary across the country, check with your state’s website. Per the Balance, “In some states, there are limits to when and how drug screening can be conducted. In some cases, the law requires drug testing.”

By taking this precaution, you can protect your business from legal liability and ensure that your reputation as a medical staffing agency isn’t irreparably damaged. 

Getting Started

Nurse staffing agencies play a crucial role in placing the right nurse with the right hospital or other healthcare facility. It’s not an easy job, but it can be rewarding both emotionally and financially. To get started, simply follow these steps:

  • Create a business plan
  • Register the business for tax purposes
  • Purchase general liability, professional liability, cyber liability, and workers’ comp  insurance 
  • Create a website 
  • Subscribe to background and drug screening services

Need help finding insurance to protect your nurse staffing agency? 

NOW Insurance can help. 

We cut out the middleman, bring insurance directly to you, and let you dictate your coverage. This means better coverage and peace of mind. 


  1. American Association of Nursing Colleges. Nursing Shortage.
  2. Forbes. 11 Website Design And Development Best Practices For 2018.
  3. The Balance. Things You Should Know About Pre-Employment Drug Testing.