What issues stop you as a Recruiter setting up your own Recruitment Agency?

From our experience in the recruitment industry, we have seen that most new recruitment consultants are often dazzled by the thoughts of large commissions (with a steady salary), company incentives, working in a buzzing atmosphere and growing a large database of contacts. Over the years most consultants either become stagnant (stay at a steady pace and do not grow as they have a regular salary and commission payment – they stay off the company radar as they bring in just enough business to be an asset but not enough to be a high flyer) or they become bored and disillusioned by the fact that they are producing large amounts of profits with only a fraction of the rewards (making £150k for the agency but their pay packet reflects £45k).

Those that become disillusioned often have to decide on if they stay and continue lining the pocket of their employer or take the plunge and start up their own agency.

Recruiters are always worried of 3 issues when setting up their own agency – setup costs, funding and working alone.

Setting up an agency is not as hard as it seems and the costs are often a lot lower than anticipated. Registering a limited company can be done within 48 hours online (thinking of a name can be one of the hardest things in the whole process), a business plan requires time and a bit of detailed thought and most banks will help with setting up bank accounts. Legal paperwork such as Terms of Business and contracts can be costly but can be bought as a pack from some employment lawyers (using your sales techniques can often help!). Jobs boards will often give free trials and discounts to new agencies to bring in new candidates and advertise jobs. All you need is a base (spare room), telephone and an email address…. You are then ready to go!

Funding is also another easy hurdle to overcome. As long as your business plan is sound, your clients are good payers and you do not expect to be paid large salaries in your first year you should be able to survive. Having some initial capital to pay your salary till your first deal comes through is important. Permanent deals are a good way of starting up a business as there is little or no cost involved, but to really have a steady amount of business coming in, you need to consider the contract market. Long term contracts mean you have a saleable business and income in months to come. The administration and funding on contract deals can sometimes seem daunting but there are back office service companies (such as TBOS) who can take this part off your hands and run this for you allowing you to concentrate on the selling aspect of your business.

The last issue is working alone. Having the buzz of people around you can seem like a great thing but can often be a distraction. If you are motivated enough to succeed in your first year then in your second year you can consider a serviced office where you will get that buzz and interaction without having to compromise working for someone else. Also other successful recruiters working around you may be thinking the same as you so going into partnership with another recruiter can help start up a business and allow you to share costs and build a successful business.

TBOS can help with all of the above issues. Our focus is to take away all the stress of the above and allow you to do what you do best… sell. We have the knowledge, contacts and expertise to set up your agency at a low cost, legally and as quickly and smoothly as possible. Once you are up and running we then take away all the daily administration of running an agency from timesheet processing right through to final accounts. We don’t just stop their either as we will advise on ways to improve your business by looking at marketing, tendering, compliance and accreditations, you ask for it and we can probably do it… or tell you of someone who can!

We would only advise anyone starting up their own agency to consider four main things:-

1. Do you own the clients? – i.e. is the relationship with you or your agency?
2. Are your clients credit worthy? – i.e. are they good payers? Have they been around for a long time? Are they surviving in the recession?
3. Can you survive for at least 3 months before you start receiving enough profit from your clients to live?
4. Are you motivated enough to do this yourself?

If the answers to these points are yes then there should be no hesitation for any successful recruiter to start up their own agency… and TBOS can be there to help.

Hopefully most recruiters will see the obvious benefits of setting up their own agency… 60-70% of the profit generated, a saleable business and the fact that they are their own boss! Why would anyone want to work for an agency with those kind of benefits?

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