Deciding to start a recruitment agency is an exciting move, but there are quite a lot of different factors to consider to ensure you have everything in place to make your business a success.
Here at New Millennia we’ve worked with startup recruitment agencies for nearly 20 years. We understand both the opportunities and the challenges.
Below we’ve summarised what you need to consider. Feel free to explore the rest of our blog which has lots of useful advice for startup recruitment agencies:
Choose a Specialism
If you’re looking for advice about starting your own recruitment agency, then we always recommend choosing a specialism. Being a recruiter that will handle any role might work for larger agencies, but it won’t if you’re a recruitment startup trying to find your place in the market.
We always find it’s best to stick to what you know! If you’ve worked in marketing recruitment previously, then chances are you’re thinking of starting your own marketing recruitment agency. Starting a business is hard enough. You don’t want to be learning a completely new sector, as well as how to run your own business!
Choosing a specialism or niche allows you to really carve out a place for your recruitment agency. It also gives you a way to get in the door with new clients and develop your brand.
Research the Market
Before you start setting up your own recruitment agency, you really need to do your research to ensure you fully understand not only the market, but also the recruitment industry itself.
It’s essential that you assess the competition.
This means thoroughly researching recruitment agencies both big and small that specialise in your industry. Not only will you learn more about the kind of roles and clients they represent, but also about the way they use their brand to connect with industry professionals.
Comply with Recruitment Rules and Regulations
There’s a lot that you need to know when it comes to recruitment rules and regulations.
You need to think about your responsibility as an employment agency by complying with the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Business Regulations 2003.
Then there’s the National Minimum Wage and National Living Wage Rates, and Agency Worker Regulations 2010.
Then there’s tax and GDPR regulations to think about, before you’ve even considered the rules you need to comply with when setting up any new business.
It might all seem a little overwhelming, so to help we’ve summarised recruitment agency rules and regulations in more detail here.
Set Your Pricing
Before you embark on your new business, you need to decide on your fees. Take into account not only your own time, but also other investments you’ll have to make, such as job boards.
When starting out it can be tempting to simply undercut the larger recruitment agency you may have previously been employed by. However consider the message this sends to the client.
Plus you need to remember that starting low then trying to get a better fee on the next placement can be challenging!
Consider the Costs
There are of course a number of different costs that you need to consider when you’re starting your own recruitment agency:
- Phone – Every recruiter needs a phone, and though you of course have one already, you need to consider the cost of the increased usage and budget for it accordingly.
- Website – Both clients and candidates will expect you to have a website that showcases your brand and advertises the roles you’re currently recruiting for. Of course you can build this yourself, but sometimes it can be more cost effective to employ the services of a professional.
- Premises – Could you start out working from home? It’s a huge cost-saving and reduces pressure on your business in the early days. If not, consider the length of the lease and any service charges you need to pay on top of your rent.
- Registration Fees – Registering your company with the relevant bodies comes with a fee, so be sure to factor these into your budget.
- Insurance – You will need business insurance to cover yourself, so perhaps speak with an advisor who can suggest the right package for you.
- Job Boards – Each job board typically has a subscription fee dependent on the number of roles you want to post. Shop around for the best deals and don’t ignore niche boards that might provide you with better candidates for a lower cost.
- CRM – Consider the cost of a CRM to manage all your client interactions. You can purchase off the shelf options or have one tailor-made.
One piece of advice that we always offer startup recruitment agencies, is to keep costs low when you’re first starting out. This reduces the pressure on you as an individual and on your business, and provides you with a much better chance of succeeding.
Working with New Millennia
To avoid blowing your savings when starting out, you could consider recruitment finance from New Millennia.
We specialise in providing back office support and funding for startup recruitment agencies.
Establish a Brand
When you first start out you need to establish your brand – this is more than just a company name or a logo.
You need to think about your colour palette and the tone of voice that you’ll use to communicate with your prospective clients and candidates.
You also need to consider the values that your brand stands for. Is your agency about being bold and breaking the mould? Or do you want to come across as highly knowledgable, yet still friendly and approachable?
Deciding on a direction for your brand, and even creating your own simple brand guidelines, can help with decision-making around marketing materials and other documentation later down the line.
Build a Business Plan
If you’re determined that starting a recruitment agency is the right step for you then you need to start building your business plan.
Put together a document that describes exactly what services your recruitment agency plans to provide and how you’re going to do it.
Set both short, medium and long term business goals to help keep you on track during those early days.
Good luck and get in touch if we can help with the finance side of things!