Setting up your own recruitment agency gives you the flexibility to manage your own hours, set your own salary and be your own boss. It’s a rewarding venture and a change in pace and lifestyle that many recruitment experts relish.
Here are our top ten tips for starting your own recruitment agency:
- Have a plan – a solid initial business plan with at least a year of targets for revenue, costs and cash flow, can be an invaluable tool.
- Start-up funds – making sure you have enough initial funding is very important. It is often the case that you will not be in a position to take a salary for the first six months or so, as these are the most crucial, and the most difficult, months for a new business.
- Permanent or Contract – which type of recruitment will your agency focus on? Contract recruitment gives long term profits and turnover, but will require an invoice finance solution. There are short term cash-flow benefits for permanent recruitment but you are reliant on reputation – you’re only as good as your last permanent placement.
- Don’t rely on existing clients – relying on clients you’ve dealt with while working for an existing agency can be setting yourself up for a fall, as they will often stay loyal to the company rather than an individual. Also beware of restrictive covenants in your existing employment contract.
- Register your company – correctly registering with Companies House and HMRC is crucial, though choosing a name is often one of the most difficult parts of setting up a new recruitment agency.
- Business banking – make sure your new business bank account is with a bank who will help you grow, and who’s solutions are scalable. Some banks are still offering free banking to new business customers.
- Legal contracts – your contracts are your first line of defence, and ensure that all your payment terms are met and paid correctly for every deal.
- Insurance – Employer’s Insurance and Public Liability Insurance are crucial, as they are another way of protecting your agency. Protection of your assets is vital.
- Back Office – almost all new recruitment start ups are people who want to be able to focus on their key role – recruiting, and forget that there is a lot of administration which goes into operating an agency behind the scenes. A back-office agency such as TBOS provide a way for you to outsource the admin and focus on selling.
- Increase your top line – concentrate on building sales and don’t get hung up on analysing your bottom line. Losing focus on what is important can be easy for a new agency director, and this can have an adverse impact on business performance.
After reading that you should now be in a much surer position to correctly and confidently set up your very own recruitment agency. And don’t worry if you find naming the agency too difficult, help is available in the form of TBOS’ start up package.