When you’ve made the decision to set up your own recruitment agency there are many things to consider. However at the forefront for all new business owners the question remains; how do I go about funding my new venture?
To be confident when developing a new business, you will want the security of having an established financier supporting your financial requirements and most likely, your back office requirements too. There are two main routes of funding that are readily available to new start up recruitment agencies which are as follows:
This route of funding is typically provided by well-known banks or alternatively a factoring company. Usually traditional factoring involves an agreed draw down amount ranging anywhere from 70-90%, this meaning if you had an invoice value per week of £10,000 then on an agreed draw down of 80% you would receive £8,000 each week and the remaining £2,000 would be paid once the invoice has been paid. This of course will help your cash flow however will mean that your margin won’t be paid until the invoice has been paid by your end client, therefore delaying you from reaping the rewards of your hard work.
Alongside this, traditional factoring rarely provides a full back office facility for the agency and can sometimes come with additional fees such as interest charged on the amounts you’ve drawn down and having to look at paying additional costs for debt protection. In our personal experience, we have found traditional factoring to be best suited to larger recruitment agencies due to their increased cash flow and back office.
Invoice Financiers will typically provide 100% finance which will mean the £10,000 mentioned previously would be processed in full each week and you would receive your profit every Friday, no waiting on the invoice being paid. Alongside this they typically offer their agency partners some form of back office platforms for you to use however this does vary massively from business to business and it’s always worth asking for a demonstration at the IT platform on offer prior to signing into an agreement. It’s worthwhile making sure the partner you choose to finance your business is one which offers the most to your newly formed recruitment start up.
Quba Solutions are an industry leading, well-established invoice financier set up and run by recruitment professionals. We provide all agency partners with 100% finance, comprehensive debt protection and a full suite of back office requirements. All of this is provided at one set percentage with no additional costs such as interest rates or monthly minimums meaning you know exactly what you’re paying and when.
Back office solutions at Quba include our DynamiQ Dashboard, designed ourselves and made purely for the use of those in the recruitment industry. It provides real time information regarding profit, turnover, debt levels and credit limits from which detailed reports can be run. It also houses our eTimesheet functionality which links in with our newly developed e-Timesheet app which is available for your candidates and end clients to download in the app store.
By partnering with Quba Solutions you would be fully equipped to run your new business whilst we take care of the funding and your back office. Leaving you to focus on your agency with the confidence of having a knowledgeable financier supporting you.
To discuss how Quba Solutions can assist you in funding your recruitment start-up please get in touch with one of our finance professionals on 01305 233178.