Starting a Recruitment Business - REC's Three Things to Consider
There are so many things to consider when you are starting your own recruitment business, so it is crucial to focus on a few key ones. It’s really hard work at the beginning and you may find yourself questioning ‘why am I doing this?’ To help ease the pressure, here are three top tips to consider.
1. Have a plan
- Develop a plan that is simple and realistic at launch. The plan should outline what market you will operate in —by sector, skill or geography—and why clients will buy from you and your company. To help with this, I recommend having a clear vision so that all your target audiences (clients, candidates and staff) know what differentiates you. For me, it’s crucial that you provide specialist recruitment services, be that by skill, geography or type of service.
- Set easy, clear and timely targets and goals, but don’t kill yourself if reality doesn’t match the plan, it rarely will! Be prepared to flex the plan and be open.
- How are you going to fund the business during the start-up phase? Assuming you have to pay yourself (and any other staff), as well as office and set up costs, you need start up investment. I recommend you have enough funds to cover the first six months of costs. If you are taking funds from friends or family, ensure these are legally documented (be that loan or shareholder agreements) and that they understand the plan and risks.
- Ensuring you have adequate finances is crucial, as you could be hitting your sales and client acquisition targets but still not have enough cash flow. Get good financial advice and qualified finance, accounting and reporting support, even if that is only part time.
- It may help to use invoice discounting from one of the main banks to help with your cash flow, especially if you are running temps, contractors or interims.
- The most important person is you. You will need to lead, inspire and drive the business towards its goals. But if your plan isn’t you working alone from your bedroom, then you will need to hire and motivate other people. Our entire industry is looking to hire experienced and proven recruitment sales people, and it is hard. It’s a frequent issue raised by recruitment business owners.
- You may need to offer incentives to entice key people to join your fledgling company - share options, profit share - or offer flexibility in how people work with you. You may also need to consider taking on trainees or apprentices, an area where we have seen significant growth in our sector with 729 apprentices presently enrolled on recruitment apprenticeships awarded by the REC. Another trend I am seeing is for companies to split sales and delivery, so that you have focussed client sales people working with specialist resourcers.
Whichever journey your new recruitment business takes you on I can recommend utilising the REC and all its resources to help you at this early stage.