Business-to-business franchises continue to play a critical role in a U.S. economy that has evolved from a manufacturing base to one that relies much more heavily on services. Those companies that have tailored their offerings to match the demands of other businesses in this service-based economy consistently find strong growth opportunities both at home and abroad in an increasingly globalized marketplace.

Businesses-especially small businesses-require outside services ranging from accounting and advertising help to benefits management to temporary and permanent employee placement and more. Dozens of franchise companies have sprung up to help like-minded entrepreneurs get started in the business of providing those services.

One good example is the temporary services field. For the past several years, temporary agencies have been doing a booming business, and industry experts say that trend is expected to continue.

There are several strong trends driving growth in the temporary services business. For one thing, the price of hiring permanent employees these days can be high--often too high for small or start-up businesses to afford.

"The cost of health care and other benefits has been growing steadily," says an analyst with Buck Consultants, a large benefits consulting firm. At the same time, the number of lawsuits filed by disgruntled employees has also been on the rise. "Even if the employer is in the right, defending against these lawsuits can be hugely expensive," he says.

Scheduling and matching staffing levels to market demand are problems faced by many companies. Hiring a full-time employee can be a time-consuming process. Companies in industries that require flexibility to meet customer demand often cannot afford to spend the time involved to recruit, hire and train new full-time staffers.

When demand slackens, companies often find themselves stuck paying for workers they don’t need anymore. That’s not a problem with temporary workers.

While temporary work has obvious appeal to business owners, it is also being embraced by a growing number of employees who find that the flexibility it affords suits their lifestyles.

"Some people only want to work three or four days a week," says an executive with one temporary services franchise. "Others want flexible hours because of child care requirements or other responsibilities at home."

Qualified temporary workers are finding that their services are always in strong demand, so there is little concern about not being able to work when they want to. In fact, competition among temporary agencies for the most qualified workers is heating up. Some are offering enticements such as health care and paid time off to attract and retain the best temps.

"When you look at it from one perspective, everyone is a temporary employee in the current work environment," says a former employee of IBM who has been working as a temp for about 16 years. "In today’s economy, no one’s job is permanent any more."

Figures compiled by the American Staffing Association reflect the growing trend of temporary workers. More than 3 million people were employed by staffing companies on the average day in 2007. U.S. staffing firms hired about 12.5 million people last year.

About 79% of temporary employees work full time, a slightly lower percentage than the rest of the work force. Temporary work also provides a bridge to full-time employment for thousands of people, with 53% of temps moving on to permanent jobs in 2006.

Temporary services agencies supply workers to fill all kinds of job descriptions, ranging from custodian to CEO. The greatest number of temps, almost 35.1%, perform industrial work, followed by 21% who work in professional and managerial jobs. Office and clerical staffers make up 20.4% of the pool, technical and IT jobs 15.7% and health care 7.8%.

Skill requirements are on the rise for most types of temporary workers, just as they are for full-time employees. The worker on a factory floor is as likely to be using a computerized production console as a hand tool. Employers looking for temporary secretarial help often require knowledge of a specific software program. Many temporary agencies now offer training in those skills to their workers.

One trend in the temporary services industry is the concept of employee leasing. Under this arrangement, workers are technically employed by the temp agency but are permanently assigned to one specific company. Many companies have found this to be an efficient and cost-effective way to staff such departments as mail rooms, foodservice operations and other low-skill, labor-intensive functions.

"There are many compelling reasons for small businesses to consider employee leasing," says Fred Greene, director of the Small Business Development Center at Manhattan College in New York City. Among them are relief from dealing with such regulatory headaches as payroll tax deductions and government-mandated programs.

The employee leasing segment of temporary services began to emerge about 15 years ago. Along with the advantages it offers to business owners, employee leasing can also provide benefits to workers. For one thing, it may offer employees access to health care coverage that a small employer would be unable to afford to provide them on its own.

The regulatory relief employee leasing can provide is no small issue to many firms. Bruce Erickson, president of the Fancher Chair Co. in Buffalo, NY, embraced employee leasing for exactly that reason.

"There is so much a small business has to comply with these days," he says. "There is the Americans with Disabilities Act, Occupational Safety and Health Administration regulations, unemployment insurance, worker’s compensation. Employee leasing companies are specialists in all these human resources issues. It becomes their responsibility to comply with the laws."

Of course, most companies continue to hire at least some full-time permanent employees, but a growing number of companies are contracting with outside firms to provide a long menu of other services.

"Word processing, payroll, security, travel, legal advice, accounting, marketing, food service--all these and more are now routinely farmed out to specialists in those areas," says a spokesman for Deloitte Consulting, an arm of Deloitte Touche Tohmatsu.

Farming out those responsibilities can save companies time and money, the spokesman notes. More importantly, it can free up key personnel to focus more attention on the company’s core business.

"There is a growing realization in the business world that many--perhaps most--jobs can be done cheaper, more efficiently or both by outside providers," says Michael Corbett, executive director of the Outsourcing Research Council.

"Companies in all industries are flocking to permanent reengineering and serious cost-cutting. This is fueling solid growth in the business services sector," he says.

Business service and supplies companies have been growing at a much faster rate than the overall economy for most of the last decade, and economists see few signs that is likely to change any time soon. Within the business services sector, data processing and computer software represent two of the greatest areas of growth. Sales of software have been growing steadily for about 15 years.

The growth of the Internet and e-commerce has also boosted sales in the software and data processing sectors, while helping to create new business-to-business opportunities for franchising on the Web. The practice of hiring outside business service providers, commonly known as outsourcing, is growing in popularity not only among small companies but among large ones as well. It is a huge business in the data processing industry, with giant companies such as IBM, Computer Sciences Corporation and Digital Equipment winning multimillion dollar and even billion dollar contracts to provide computing services to other giant firms, such as General Dynamics and Equifax.

But that’s not to say that there isn’t plenty of room for smaller players, as well. "This is one business mega-trend that definitely has the potential for a trickle-down effect," says Corbett, of the Outsourcing Research Council. The same attributes that make outsourcing on a huge scale attractive to very large companies can make outsourcing on a smaller scale attractive to smaller companies--namely, cost and efficiency.

One area where outsourcing has seen explosive growth in recent years is telecommunications. Given the increasing level of integration between data processing, where outsourcing is hottest, and telecommunications, a surge in activity in the latter area makes sense, says Bradley Donleavy, a Washington, DC-based consultant who specializes in technology issues.

"One of the big motivators in outsourcing deals is money, especially for companies facing financial constraints," says Len Bergstrom, president of Real Decisions Corporation, a Darien, CT-based consultancy that maintains a database of some 300 companies that are actively involved in outsourcing.

In the more than 30 years that Bergstrom has been following the development of outsourcing from its roots in computer time-sharing, he has acted as a middleman in some of the biggest outsourcing deals in the industry."

In the short term, outsourcing can make almost any deal look good," he says. "To the CEO focusing on quarter-to-quarter performance, outsourcing is very attractive."

Outsourcing any internal function-be it data processing, payroll or entire operating departments-can allow a company to eliminate a sizable expense. At the same time, it can provide an immediate infusion of cash if the client company sells its assets to the outsource vendor as part of the deal.

Even companies that are rock-solid financially are finding it pays to contract out certain business services, says Nate Lanford, vice president of the transportation strategic business unit at Electronic Data Systems, the former General Motors subsidiary founded and later sold by erstwhile presidential candidate Ross Perot.

"Outside business service providers can help their customers achieve a competitive advantage by controlling costs through economies of scale," Lanford says. "Outsourcing vendors can act as strategic business partners in the broadest sense of the word, offering consulting, systems development, systems integration and management services."

There are many other reasons why more and more companies are turning to outside providers for a growing array of business services.

For example, globalization is increasing the pressure on many small businesses to become more competitive and to increase their profit margins at the same time that many of them face growing difficulties in raising capital, thanks to the credit crisis that started with the sub-prime mortgage debacle.

"Every dollar a company does not have to spend on an internal function unrelated to its core business is another dollar it can devote to improving its competitive position in the marketplace," says Stephen McClellan, an analyst with Merrill Lynch.

Outsourcing can free up capital to be applied to a company’s mainstream strategic activities, such as marketing, new product development or customer service. It can also provide a means for a small company to stay on the cutting edge of new technology without the kind of infrastructure commitment that normally entails.

"Outsource vendors tend to have the best and the latest equipment in their fields, and their technical consultants are at the top of their industries," says McClellan. Another emerging trend in the business-to-business service sector is the tendency for client companies to develop relationships with fewer suppliers of goods and services.

The business service provider that gets the inside track with a company is likely to keep that company as a customer and grow the amount of business it does with that company, provided it continues to meet the customer’s needs.

This can be good news for owners of franchised business service operations. A survey by a big industrial trade magazine recently found that companies rate quality and service as the number one and number two attributes they demand in a business service provider. Price was ranked fifth.

"Those results bode well for franchised business service providers," says Chris Weir, a White Plains, NY-based economist who tracks regional, national and global leading indicators in the business-to-business sector.

"The uniformity and emphasis on quality that characterize most franchise organizations have strong appeal to other business managers," Weir says.

"The name recognition that comes with a franchise can also help the franchised business service provider get a leg up on its independent competition when prospecting for new business"

The directory section of The Franchise Handbook lists dozens of franchises specializing in Business Aids and Services and other business-to-business offerings. They come in all shapes, sizes and specialties, and there are variations available to fit a wide range of start-up budgets. Some of the more popular formats include: