Whether you’re new to recruitment or looking to go on your own, it can be a daunting prospect starting a company. It’s the unknown; you’re a successful recruiter disillusioned with your progress or immediate management, fed up with billing for someone else and asking yourself, why don’t I just do this myself? You’ll be looking to reap more of the rewards of your own hard work, and have numerous ideas on how to run your own consultancy. It’s not easy though; you’ll want to enter into this with your eyes wide open.
1. Understand your market
Choose what industry; Construction, Oil and Gas, Engineering, IT etc. You may be under a form of covenance from your previous employer so read your contract carefully so you don't come across any issues before you start. Recruiters could only previously really start their agency with a focus on permanent recruitment due to restrictions on cash flow, preventing temporary recruitment being viable.
2. Analyse your competitors
Business is all about competitors. You will need to establish a unique selling point, a vision, and a company ethos. You should understand your marketplace and the competition amongst you. In some way, this is a game and if you don’t know who your opponents are then you are likely to lose or unlikely to establish market share. It's worth looking at basic level marketing such as the 4 Ps: Product, Price, Place & Promotion.
Unlike many other start-ups the initial costs for starting a recruitment agency don’t have to be expensive. Online CRM systems are generally up to date from a legislative perspective and cost effective. You’ll need to consider of you are going to service the temporary recruitment market there are many considerations to take into account regarding cash flow and financing the business. Banks, traditional factoring companies and recruitment specialists like Quba Solutions are all possibilities
Many individuals looking to start up a business, often ask themselves “how much money do I need?” This is a difficult question, but starting your own business is investing in your future, it’s hard work and you need to take some risks. You’ll also need some basic recruitment insurance as a requirement for dealing with your clients. Public and Employers liability and Professional indemnity are a minimum. Quba has many business partners to assist in gaining the most competitive quotes on the market.
If you’re a member of Recruitment Employment Confederation (REC) or APSCo you may have access to the necessary contracts you require otherwise you’ll need a recruitment or employment lawyer to assist you. You will also need to consider the following: Contract for Services, Contract of Employment, Terms of Business to the client and assignment schedules to candidate and clients.
Recruitment is awash with legislation. We advise that you take seriously and understand any relevant and up to date recruitment specific laws such as: The Conduct of Employment Agencies and Employment Businesses Regulations 2003, The Equality Act 2010 and AWR to mention a few. 2018 will also see changes to data protection through GDPR in May and also a consultation on IR35 into the private sector.
6. Registering your company
Select a name for your business, take time when considering the name, think long term as it’s often very difficult to enter new markets if the name is very specific. For example, National Drivers Ltd would struggle to diversify into Legal or Financial for example. Companies House has a name availability checker here. Consider your website and purchasing the website Domain name; it may be worth looking at this before making the final decision on the name of your business.
It is also important to speak with your current bank to set up a business account, which will allow you to trade with your clients, you will need to take in your company certificate of incorporation for registration purposes.
Gone are the days where you need an investor to start a recruitment company. You need to make the decision on what finance options are most suitable for your business needs, expertise, and experience. This could be anything from: Confidential Invoice Discounting, Traditional Invoice Factoring, 100% Financing or 100% Financing with full back office. There are many businesses available that will be on hand to offer a range of finance products to suit your business and the expertise to make your recruitment set-up easy.
8. Financial Planning
The thought of financial projections to most sales people can be painful, daunting and equally taxing. There is no need to drill down a Financial budget to the nearest penny and spend weeks forecasting what you believe may be the outcome. Take certain steps to carry out a detailed but realistic plan, there is plenty of information available on financial planning on the web.The Financial Plan basically describes each of the activities, resources, equipment, and materials that are needed to achieve these objectives, as well as the timeframes involved.
You can easily breach the new GDPR rules if you are unaware and do not invest in technology. Quba has already begun thinking about GDPR and implementing changes that will be ready to take much of the burden come May 2018.
Cloud based technology is probably the safest and easiest way to start your business. Local server systems are expensive to maintain and not ideal from a disaster recovery perspective. Quba Solutions is fully cloud-based, backed up over 5 separate UK data centres and gives you complete peace of mind that we’ll still be able to pay your temporary workers in the event of a disaster.
10. Business Plan
A business plan is crucial for any business, its a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals. It highlights unique selling points why you are different from your competition and the strategy and vision you have as company.
A plan needs to be something that is looked at regularly and something that is updated, its not a document that is produced and then hidden at the bottom of a draw. It links together with the Finance business plan and financial projections. Again be realistic in your targets, we as salespeople have a tendency to “overcook” things…
If you have are looking to start a recruitment business in 2018, then why not contact us for more information.