Top Tips for Starting a Recruitment Agency
Whether you are new to recruitment or you have been working in recruitment for years and feel the time is right for going out on your own, starting a recruitment agency is never easy. Luckily, we are here to help with some top tips to help make your journey to starting your own agency a little easier, and which will allow you to quickly focus on recruiting (and earning money.)
#1 Decide What Type of Recruitment You Are Focusing On
One of the most important decisions you will have to make regarding your recruitment agency, is what type of recruitment you are going to focus on. You may want to focus on a certain type of recruitment, such as:
- Executive search
- Permanent roles
- Contract/Temporary roles
Or, you may want to pick a certain niche industry, such as:
- Accounting and Finance
Whatever you decide, make sure you have an interest in it, knowledge of it, and something that you feel you can add value to.
#2 Assess the Competition
As with any industry, the recruitment industry is full of businesses both large and small, and so you need to make sure you stand out from the crowd so that clients and job seekers pick you over all of the others. You should spend a bit of time then checking out the competition and figuring out what their weaknesses are, and what you can do better than them.
#3 Be Honest about your Experience
Recruitment can be a tough industry to crack – long hours and lots of energy are needed. Don’t let this put you off though, as the rewards can be massive. If you don’t have much recruitment experience it may be worth working at an existing agency for a period of time in order to pick up some experience, or partnering with someone who already has experience and learning from them.
#4 Think About Finance
When it comes to finance recruitment there are lots of things to take into account, although unlike most other industries the actual start-up costs for recruitment agencies are not that expensive. You can start out by just working from home, or from a co-working space to keep your costs to a minimum. You will also need to think about other expenses such as:
- Business expenses
- Corporate insurance
- Laptop and Phone
- Recruitment software
If you already have the funds in place to cover all of these costs then that is great, but if not there are plenty funding options available to you, such as those offered by Finance4Recruitment who specialise in funding for recruitment agencies.
#5 Read up on Rules & Regulations
You could just rely on a lawyer to ensure you are complying with all of the rules and regulations relating to recruitment, but this could get quite costly. It is always a good idea to be aware of the laws yourself so that you can ensure you are sticking inside them. Some of the important documents you need to be aware of include:
- Employment Agencies Act 1973
- Conduct of Employment Agencies and Employment Business Regulations 2003
There may be other important regulations you need to be aware of depending on which sector of the recruitment market you are operating in, and you can find out more about these on the Gov.uk website.
#6 Register Your Company
Once you have done all of the above, it is time to make your recruitment agency official. To do this you need to:
- Choose a name. Make sure it is unique by using the Name Availability Checker at Companies House
- Set up a Limited Company. You can do this yourself through the Companies House website, or choose one of the many companies available out there who will complete the process for you (for a fee).
- Register your website domain. Some people think this is more important than your actual company name. Again, you can use a tool such as the domain name checker at GoDaddy. You should buy the .com version of your website domain at least, but there are lots of other options nowadays such as .co, .org and even .agency
- Open a business bank account. All of the main banks and financial services companies offer business bank account options with different perks such as free fees for the first year, and free travel insurance. Take a good look at all the different accounts and choose the one which is best for you.
- Take out Business Insurance. You will need to take out Professional Indemnity Insurance (protection for your services) and Public Liability Insurance (protection against compensation claims) as a minimum. Again, there may be other insurance cover you need, dependent on what sector of the recruitment industry you are operating in.
- Find an Accountant. To make sure your books are well kept and above board.
- Register your Company for VAT (if your turnover is going to be more than £85000)
#7 Choose your Location
The location of your recruitment agency will be very important, depending on what type of recruitment you are doing. If you want to be a general recruiter, then you will need to be based somewhere were candidates can easily get to you. If you are focusing on executive search or a specific niche in the market, then you can more or less work from anywhere. This is easy to do nowadays as advances in technology mean that you can even do face-to-face interviews using software on your laptop.
#8 Create a Marketing Plan
- First things first, you need to make a list of potential clients, either by niche industry or those that are local to you. This could involve doing a bit of searching on the internet, or just listing people you have been in contact with in the past.
- Find candidates. If you have no candidates to offer clients then you have no agency!
- Create a logo and produce a website. First impressions are very important.
- Finalise your pricing structure. Be prepared to be competitive on price when you first start out, and decide whether you are going to offer a commission-based structure or a flat rate fee.
Whatever sector of recruitment you are going into, whether it be back office recruitment or retail recruitment, the team at Finance4Recruitment are here to help you with all of your financial solution needs. Get in touch with us today, and let us help you to scale your recruitment business.