What You Need Before You Set Up a Recruitment Agency

Something was say quite often is that there’s more to setting up a recruitment agency than having an armful of clients.

As much as that’s obvious, what we’ve found is often less obvious is exactly what’s needed; it’s a rare month where we don’t find ourselves pointing out to one new agency or another something that they’ve overlooked, and often what we draw to their attention is a potential company killer if not attended to.

Here, then, is a quick list of some of the more important things we’ve seen get overlooked.

  • A Base of Operations

You can recruit from anywhere; given the contacts and good telecoms you don’t even need to be in the same country as your clients and contractors (although it helps!). But if you take all your meetings by phone from your local Starbucks, sooner or later clients will start to worry about your professionalism. That’s one of the reasons TBOS Complete includes a service where we present ourselves as if we were part of your company.

  • Company Insurance

As a business you require public liability and professional indemnity insurance, and if you employ anyone you will also require employers’ insurance. As a recruitment agency in particular you’ll also want to be aware of the contractors’ insurance status of each of your contractors, so setting up checks at the start is a very good idea.

  • Turnover Projections

Without turnover projections, it’s difficult to secure the kind of ongoing finance that a recruiter needs to pay their contractors before collecting from their client. A clear expectation of how your business’ finances will flow is always important, but far more so in this sector.

  • Initial Financing

Any company can expect to need to spend on startup, before money is coming in. Enough capital to start successfully is vital, as is arranging ongoing financial arrangements for contractors. Systems like TBOS Freedom help, but these still need to be organised.

  • HMRC Registrations

Signing up as a company at Companies House isn’t necessary, but it’s something you should have considered before you start. While remaining a sole trader excuses you from Corporation Tax, you receive no personal indemnity should your business go bankrupt. Similarly, depending on your turnover projections you may or may not have to register for VAT immediately but you should know what to keep an eye on.

  • Detailed Accounts

You may be saying to yourself “But if I haven’t started yet, why do I need to think about accounts? I can start work on those once I’m going.” The fact of the matter is that before your agency launches is the perfect time to get everything set up and in place because after you launch, you’ll want to spend all the time you have available on things that will make you money.


To discuss these and other things you should remember, contact us on our site, at enquiries@tbos.co.uk, or by calling 0845 881 1112.

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