Top 20 checklist for the discerning recruitment entrepreneur;
Having now decided that starting up a recruitment is the right way forward for you, it’s now important that you have a good idea of all of the key areas you will need to address, in order to set up a professional and compliant recruitment business.
During each edition we shall be offering some advice and guidance in each of these (and many other) areas to help you on your way. Here are our top 20 core considerations;
Putting together a business plan is crucial when setting up a new business. Whether it’s a small business plan for your personal use and referral or a more robust document for acquiring investment, it is imperative to get your ideas and research down on paper.
Before you set up you need to know that there is a viable market for your business to thrive in. Therefore you will need to conduct your own market intelligence research to ensure the success of your business.
You need to know who your competitors are, where their clients are, what their rates are and their unique selling points, so you know what you will be up against.
Sales & Marketing Strategy
Crucial! Knowing how you are going to take yourself market is vital to the survival of your business in the initial stages. Get a robust marketing plan together, detailing specific weekly sales and marketing activities from week one of trading up to the end of your first quarter (with subsequent activities planned for later in the year).
Devise a pricing strategy
Work out from your analysis how you will structure your pricing for the business and decide what your policy will be regarding negotiation.
Financials – P&L’s Budgets and Forecasts
You may need some assistance with this if you are new to the industry or this is your first time establishing a new business. It is important that you do not over estimate your revenue for your first year of trading and keep your expenditure in check.
It may be that you have some money tucked away to set up your business, however cash flow is king and for nay start up recruiters, the money can run out all too easily. Speak to someone in the know to establish how much you really will need to set up the business and realistically what you will be able to survive on during the first 12 months of trading. The banks can be really helpful and factoring and invoice discounting are also options at very competitive rates for start up businesses.
Company Formation, email accounts and Web Domain
There are businesses who will set up your business for you, as well as your web and email domains. Make sure you have researched this properly and don’t pick a name which is already in use or in direct competition.
Franchises v’s setting up alone
There are some exceptional franchise business models out there offering support and resources to those looking to set up on a shoestring but be wary of giving away too much equity.
In this day and age a website is one of the most effective ways of driving business to your agency and there are some really cost effective options available. A website is a great tool, however there is no better means of marketing your business than a good old fashioned telephone and a spot of networking, so don’t feel it has to be your first cost consideration
Accounts and Bookkeeping and Software
Make sure that you keep your accounts up to date from day one of setting up. You will thank yourself for it later on. There are some excellent spreadsheets around and many accountants will be able to offer you free software or online tools to help you with your accounts. If you are a limited company, getting an accountant in the early stages could prove to be a huge help.
HMRC, Income Tax, Corporation Tax & Capital Gains Tax
www.hmrc.gov.uk HMRC’s website is an excellent resource and can offer a wealth of information regarding all of the above. Alternatively your accountant or assigned payroll professional should be able to offer you free advice on all of the above.
Payroll, Purchase and Sales Ledger and Credit Control
Even if you are not going to be supplying temporary or contract workers initially, you may still have your own payroll and income tax to organise. It’s definitely worth speaking to a payroll provider or your accountant to find out what needs organising in the early stages. Don’t get caught out.
Ensure you are insured before you start trading. There are some fantastic insurers who specialise in insurance for recruitment businesses. Look into Professional Indemnity, Public Liability and Employers Liability cover as a starting point.
The value of your business in the future will be based on your client and candidate database as much as your sales pipeline and annual revenue. Investing in a decent database during the early stages is a wise investment. Finding the right software for you can be a bit of a minefield but there are plenty to choose from with functionality and cost to match each businesses needs and budget.
Branding, Company Name etc
Establishing yourself as a brand, your core values and principals and get the message out there from the outset. Speak to friends, family, colleagues and research and research. There are also some excellent marketing and branding professionals out there who can help you with this. It’s so important to get this right – it can be the making or the breaking of you if you get it wrong.
Legislation (Contracts and legally compliant documentation)
Anyone can set up a recruitment business but setting up a professional, compliant business entity is another matter. Make sure that you have a good understanding of the legal practices you must adhere to once up and running.
Establish processes and procedures (contract / Temp and/ or Perm recruitment)
From day one, make sure you get some robust business processes and practices in place. There are correct and professional methods for providing recruitment services and if you want to keep ahead of the game you need to make sure yours are exceptional.
Communications: Telephones / Broadband / Network etc
There are some great deals to be had and a lot of advice out there. Worth speaking to one of the larger providers to see what deals they have available to incorporate all of your communications and take it from there. Get your best three quotes before committing.
Working from home can be a very cost-effective solution in the initial stages (if you have the space) and serviced offices can make a great base for interviewing candidates (In addition many offer prestigious postal addresses and phone answering services).
Setting up doesn’t have to be expensive or complicated but you do need to get things right to make this work. There are support services available to advise and assist you to ensure you get off on the right foot.