You don’t need us to tell you that recruitment is a tough job to do. When things are going well, it can feel like the best job in the world and the rewards are certainly there to be had. But for some, being just a consultant is not enough – they want to be the person running the ship.
So if you are thinking about jumping ship to swim the treacherous seas towards career nirvana as your own boss, how do you know if you are ready to go it alone from a financial perspective?
Here are our top tips for starting your own recruitment business;
Keep your costs down from the outset: When starting up, the idea of securing a great new office in a prime location may be top on your list of personal priorities, but it’s not necessarily the right move to make at this stage. So think about your costs and remember that it’s now down to you to pay the office rental, business rate, utility bills and all manner of other ‘hidden’ expenses that come with operating an office. Focus on the real priorities for the business and consider if you really need that plush looking office or if you could work from a spare room in your house and save costs instead?
Network rather than advertise: In these early days, the temptation to plaster your new branding all over the place can be too much to resist for many new start-ups. But resist you must. It is all too easy to waste money on lots of advertising – some of which will be effective but most won’t. Instead, tap into your existing network of contacts, maximise your connections on LinkedIn or even organise a launch event for your new business. Talk to as many people as you can about who you are, what you are doing and what makes you stand out from your competition – you really never know where some of these conversations may lead.
Get your pricing right: In your previous job the percentage you charged a client for a successful placement will invariably have been set by the powers that be, but now that decision is yours to make. This is when you need to don your business hat and factor all manner of things, ranging from your own National Insurance Contributions, cost for your time to source that candidate, time taken to interview candidates, costs for advertising the role, as well as the margin you are looking to take. With the CIPD estimating that the average cost of hiring a new employee is £4,667 – time quite literally is money.
Protect your cash flow: Maintaining a healthy cash flow is imperative for any business, whether new or established. It can take several months before you make your first placement and your first invoices are paid, but the bills still need to be paid. Unless you have deep pockets, chances are you will need some sort of financial support to see you through these early days. So ensure that you you have the right back office and financial support partner to help steer you through and keep your business moving forward rather than held back by slow paying clients.
Keep the books: The sooner you can get to grips with your accounting systems, the better. Having a good system will also mean you can keep track of your business progress from day one and will save you considerable time when it comes to completing your annual tax returns too.
Listen to advice: No one has all the right answers all of the time, so be prepared to listen to the advice of others. Running a business when you haven’t done it before can be a minefield, so budding entrepreneurs should seek the support of company’s such as Simplicity who can provide sound advice based on extensive experience of providing financial backing, recruitment support, back office services and business mentoring.
We have helped literally hundreds of recruitment agencies who have since grown to become some of the most enterprising and fastest-growing consultancies in the UK. By taking the financial risk out of starting a new business, Simplicity is a leading partner of choice for those individuals who can demonstrate they have what it takes to develop a successful recruitment business.
If you are interested in launching your own recruitment consultancy or would like advice on how to finance your growth, call us now.