There’s more to setting up a recruitment agency than an armful of clients, or so the saying goes.
So, everyone agrees that there’s more needed – but most of the time, new agencies are missing some of it. TBOS has often found ourselves pointing out something that’s been overlooked, and given our back office focus, a lot of what we see missing can be a company killer.
So what are people missing?
A Headquarters
As TBOS has noted recently, you don’t even need to be in the same country as your clients and contractors these days. However, if all your meetings are taken by phone from the nearest bar, there may be questions raised about your professionalism. As part of TBOS Complete, we present ourselves as if part of your company, giving you a business address that looks businesslike and a phone number people can call which presents the atmosphere of a busy office… by being a busy office.
Company Insurance
Public liability and professional indemnity insurance are automatic requirements for any business. If you employ anyone you also need employers’ insurance. And a recruitment agency also needs to be aware of what contractors’ insurance each of your contractors has; making sure you have checks in place from the start can help.
Turnover Projections
Putting turnover projections in place will help you secure ongoing finance arrangements – and without those, paying your contractors can be a nightmare. A clear expectation of how your business’ finances will flow is always important, but that’s never more true than for a recruitment agency.
Initial Financing
You’ll always need to spend on startup, before money comes in, and even then breaking even isn’t guaranteed for a while. We recently looked at how agencies can survive the first six months, but in short: You need enough capital for a successful start and you need to arrange financial arrangements for paying your contractors. TBOS Freedom is one potential solution to the second need.
HMRC Registrations
You don’t technically need to sign up as a company at Companies House, but you may want to and you should definitely think about it. Staying as a sole trader means you don’t pay Corporation Tax, but you also don’t receive any personal indemnity if your business goes bankrupt. Along the same lines, your turnover projections might or might not suggest it’s worth VAT registration immediately – but you should know at what point it’ll become necessary.
Detailed Accounts
It’s much, much easier to keep your accounts up to date if you get them set up before you start. After all, once you’ve launched, you’ll want to spend all your free time working on making the money you need, and having your accounts set up and only needing updating can make a world of difference.
TBOS is happy to discuss these and other issues. You can contact us on our site, at enquiries@tbos.co.uk, or by calling 0845 881 1112.
