When you’ve decided to start your own recruitment agency, there are so many different things you need to consider.
You might be feeling excited, or maybe a little daunted at the prospect of spreading your wings and heading out on your own.
Here at New Millennia, we have years of experience working with startup recruitment agencies. We love to support businesses in that early stage and share learnings that can help them to get started and ultimately succeed.
Below we’ve shared five mistakes startup recruitment agencies can make and a few different approaches to avoid them:
1) Spending too much money
When starting out you might feel like you need an office space. Then there’s the exciting task of choosing furniture for your new founder/director/CEO corner office!
However before you do anything, think about what you really need to start out.
Spending too much money and making too many commitments puts your new company at higher risk. Not only do you need to find your salary each month, but also the money necessary to cover your overheads.
Keeping startup costs low is one of the best pieces of advice we could ever give a new recruitment agency. Working at home, shopping around for quotes on services and considering the benefits of recruitment funding, are just a few ways to save money.
2) Picking the wrong specialism
New Millennia’s Operations Director Paul O’Rourke always advises new recruitment agencies to stick to what they know when it comes to choosing a niche for their agency.
Starting a new business is challenging enough, without having to get to grips with a new industry.
Choosing a sector you have experience in, will give you a head start. You’ll understand how the industry works, the requirements of different roles and you’ll have a foot in the door with clients.
This doesn’t mean you can’t expand your agency once you’re established. You’ll be in a much stronger position, plus you’ll have the reputation and financial security that you need.
3) Offering very low or discounted fees
It can be tempting when you’re trying to get your first client, to offer a very low fee to get the deal over the line.
Remember though you’re starting from a low position and moving from that point could prove difficult.
Sure once you’ve placed some fantastic candidates with a client, you have the track record. Then you can justify increasing your rates. However increasing your fees significantly will need to be done over a fairly long period of time. This can mean you end up making very little profit.
Low fees can also be a red flag for clients. They might question whether you have the skills necessary to find the individual they’re looking for.
Instead think about offering a reduced rate if you get the role on an exclusive basis. Then you know you’re almost guaranteed a fee.
4) Not recognising the importance of back office functions
If you’re running a temporary recruitment agency, then ensuring candidates are paid on time (and accurately) is one of your most important jobs.
In a haze of meeting with new clients and securing deals, sometimes startup agency owners can neglect all the work that needs to be done behind the scenes!
Reviewing timesheets, processing payroll and being on hand for temporary worker queries is seriously time-consuming. However it’s essential for keeping both clients and candidates happy.
At New Millennia we offer a back office management solution that allows agencies to hand over the resource-heavy tasks such as payroll management. A combination of industry-leading software and an experienced team, allows recruiters to simply focus on growing their business. Click here to find out more.
5) Lacking direction
Not having a clear business plan is another way that recruitment agencies can fall before they’ve even got started.
It’s essential that before launching you take the time to really consider what your business is about. Plus what you’re hoping to achieve.
Take a close look at the competition, what are they doing right? What do you feel you could do better?
Also remember that working independently, when you’ve previously worked for an employer can be really challenging. It can certainly put your self-motivation to the test.
Having a plan in place is a way to help you stay on track and focus on your ultimate goal – running your own successful recruitment agency.
Setting a mission, vision and values for your new company will also help you develop an authentic and original recruitment brand.
Do your research, plan your approach and we’re sure you’ll be on track for success!
Here at New Millennia we have years of experience working with startup recruitment agencies, and we’re here to help.
We offer a 100% recruitment finance solution that can help you make placements without the risk.
All our services are tailored to the recruitment industry, meaning we understand the challenges and requirements of the sector better than a general provider could.
We initially like to arrange a chat with you to learn more about you and the business you’re launching. Together we can build a service that works for you.
If you want to learn more about how New Millennia can support your agency then get in touch.