This is a great guest blog from the team at Simplicity.
Going from being employed to starting your own business is a daunting task and without the proper foundations in place, you could be setting yourself up for failure. If you are currently a recruiter, you may think that you will make a lot more money by placing clients in jobs yourself rather than taking a salary from the agency you work for. That may be true, but it’ll take some hard work to get there. Below I’ll look into some important steps to take before setting into the world of self-employment and running a business.
- Get a Solid Business Plan
When I say sold, I mean solid! This has to be a well researched document with figures that make sense to everyone looking at it, not just yourself. It is important that you understand yourself too of course, as you’ll want to use your business plan as the basis for any decision you make. Do some research on competitors and figure out how many clients you need to place in jobs to make a profit.
Don’t forget that you’ll have overheads to think about with a recruitment agency. Don’t rush into making a financial commitment on things like office rental, car purchase, and staff. These should be thought about but always try to keep overheads low to begin with so that you can turn a profit sooner.
- Do You Need an Office?
You may think this is an important aspect of any business but in reality a large proportion of business owners start out from their living room. In recruitment, it is possible do a lot of the work from your home, whether that be making calls, doing admin, or searching for candidate. You should think about shared office space to hire out meeting rooms when needed as this will give a professional look to your business without the large overheads.
- Hire an Accountant
If you want to keep track of where you are with your finances and make decisions with sound information, you should consider hiring an accountant. One of the biggest challenges with business is keeping track of your income and expenditure and so having someone to do that for you is a blessing.
An accountant will also be able to give you some good advice on the structure of the company. Should you start a LTD business or should you go self-employed? These are important questions to consider when starting up as they will affect how you can run the business and how you can make money.
- Open a New Bank Account
Whether you are planning on going self-employed or starting a LTD company, you should always open a new bank account purely for your business transactions. The main benefit of this is that you will be able to keep your personal finances separate from your business and it’ll make it easier for you, your accountant, and HMRC when doing accounts. You can also benefit from some start up business bank accounts that offer great incentives for joining them.
There are many advantages to going alone in recruitment but also many pitfalls that may occur along the way. If you are seriously considering going alone and need further advice, take a look at this guide to starting a recruitment agency from simplicityinbusiness.co.uk.
