What is the Cost of Starting a Recruitment Business?

We are in the midst of a third national lockdown and it is undeniable that change has been happening all around us; the way we live, interact with one another and the way we work.

However negative some of the impact has been, there have been some major positives to go alongside it. Many individuals have been using this time and the unique opportunities it has provided to initiate change; be it by choice or circumstance.

Maybe you’ve proven to yourself that you can work remotely, realised how effective you can be without immediate support around you, and how much better your work-life balance can really be

Maybe you’ve spent time reflecting whilst on furlough or have faced redundancy due to company cuts.

Regardless of the reasons behind it, if you have decided that forming your own recruitment business is the route you want to take, you will no doubt be asking yourself the daunting question: how much money do I need to start my own recruitment agency?

The simple answer to this question is: not a lot!

Assuming you have a computer and a mobile phone you can start and run a successful freelance recruitment business with a relatively empty bank account.

Think about the two most important costs of a freelance recruitment agency

These are:

The payroll for the temps
The software to be able to effectively manage the back office of the business.

Sure, there are costs that an average agency will incur over time as it grows such as a website, a CRM, job boards subscriptions and marketing support for example, but none of these are integral in getting the business off the ground and starting to create a profitable business.

The most successful recruiters that we see and support at Quba Solutions are those that are focused, driven and determined to succeed.

By its very nature, a freelance focused recruitment business creates a cash flow issue, due to having to wait for your invoices to be paid by your clients whilst having to pay your workers at the same time. This is the true cost of running a recruitment business and potentially where large debts can start to build up and spell the end of a company. before its really begun. This is where Quba can come in and offer exactly the support you’ll need.

Quba’s invoice finance solutions will not only pay your temps every week, but will also pay you the margin gained, providing an instant income into the business. We provide full back office services that match, and in many cases beat those of any blue-chip corporate agency, enabling your new business to compete at the highest level without such expenses as offices and staffing, so you can get billing straight away.

There are no signing up fees, minimum monthly fees or start-up costs – our solutions are charged based upon your weekly turnover. As such there is no need for financial investment prior to starting your business.

The only requirement for any cash reserves for a new agency is to cover personal costs (such as your mortgage) whilst the business is building over the first couple of months.

There are other complex funding options and potential investors available that will offer a salary or funding injection at the start when forming your business to tide you over during this period, however they tend to be at the expense of either equity in the business or a far more complex funding model that often doesn’t include many back office services such as payroll or credit control.

Building a successful temp desk will quickly provide the cashflow needed to cover your personal costs when supported by a funding partner like Quba. For example, placing 5 temps on £10 pay/£15 charge placements would net the business in the region of £450 per week.

If you would like to learn more about how our solution and whether it can provide all of the funding and services you need, you can reach one of our funding professionals any time on 01305 571042 or contact us here.