Should You Start An Agency? We Have The Checklist
As we come up on the end of another tax year and the holiday season approaches beyond that, we’re looking forward at TBOS to what we know will soon be coming; calls and inquiries from recruiters who are thinking about taking the plunge and starting an agency of their own.
Knowing what your tax situation was and with time to think on holiday gives plenty of reasons to think about the future, plan ahead, and return refreshed and aiming to strike out on your own – and we encourage that.
That said, there are six questions we always ask before we recommend going for it.
1. Why Do You Want to Do This?
Not every great recruiter has the mindset to be a director as well. Before you risk it you should make sure you’re ready to handle the management side and have the drive to see your commitment through. Quitting to go solo because your current employer has annoyed you isn’t good – that drive will burn out with the anger.
2. Where’s Your Business Coming From?
Don’t make the mistake of assuming all of your clients will come with you. Your covenant with your old employer gives them a chance to sell your old clients on someone new, and they may prefer to trust a larger name anyway. You should be confident of your ability to earn new clients and candidates before you take the plunge.
3. Do You Have or Want a Business Partner?
Believe it or not, it’s lonely at the top. Having a partner can boost your motivation, ease the burden, and give you someone to joke with who understands when you need it – but do you want to split the profits? Do you have someone who’ll see things the way you do? If not, consider working in a shared or serviced office to reduce loneliness – but you’ll still need drive.
4. What Kind of Agency Do You Dream About?
You need a clear goal for the shape of your agency if you want to build something solid and secure. What industry will you recruit into? Do you plan to specialise in permanent or contract placements, or will you take both? What’s your growth plan? Are you building a business to take you to retirement or one to sell in the future? Believe it or not, these are all questions you should be answering now.
5. Can You Afford It?
You need to have, at minimum, 3-6 months of living allowance banked before you begin as it will take some time before the company can support you. In that time, any income the business makes will have to be routed right back into its costs.
6. Do You Know What You Need?
If you have answers to the first five, the next step is clear. Forming your company, setting up a bank account, registering with HMRC, arranging insurance, buying an email domain, and buying contracts are all important – and then it’s time to start generating business. Setting up your website, ordering business cards, and joining associations can wait for a while.
We offer comprehensive start-up facilities for new recruitment agencies to help with company formation, HMRC registration, bank account support, and for other services we even offer a full list of recommended partners.
Of course, we can also handle your back office and accounts completely, with a service charged on placement numbers – not your turnover – to eliminate the need for back office staff and an accountant.
If you’d like to know more about this – or our invoice finance service, TBOS Freedom – please don’t hesitate to get in touch.