When you’re setting up as a recruiter there are 7 things TBOS suggest you need to consider.
An armful of clients is all well and good for a new recruitment agency to have on hand, but it’s far from the only thing needed; the big problem is answering the question ‘what else?’
It’s a rare month at TBOS where we don’t find ourselves telling at least one new agency – or planning-stages agency – about something they’ve overlooked; quite often, what they’ve overlooked could be a company killer if it’s not handled.
Seven of the biggest are listed below…
A Base of Operations
Given today’s telecommunications, you can recruit from anywhere; you don’t even need to be in the same country as your clients and contractors, as any international recruiter will tell you. Mind you, if every time you talk to your clients on the phone they can hear a TV playing or the busy chatter of a Starbucks in the background, sooner or later they’ll have doubts about your professionalism.
A one-man recruitment agency legally requires public liability and professional indemnity insurance. Any staff at all means you should look at employers’ insurance, and you should also be keeping track of contractors’ insurance as regards each of your contractors – starting out by setting up the checks is a good idea.
Without turnover projections, you’ll have difficulty securing ongoing finance arrangements – and without those, paying contractors on time is a major challenge. In recruitment in particular, having a clear idea of cashflow projections is vital.
Any company should expect heavy spending on startup, well before money starts to come in. Making sure you have enough capital to survive and arrangements to handle contractor financing in the early days are vital.
Signing up at Companies House as a company isn’t essential, but without doing so you receive no personal indemnity against bankruptcy. Similarly, depending on your turnover projections you may or may not have to register for VAT immediately, but you should know what to keep an eye on – so you may be better off signing up.
We’ve seen and heard too many panicked horror stories not to advise you get your accounts prepared and in place ahead of launch. Trying to start work on them just as business is picking up seems perfectly workable, but in practice, it hardly ever pays off.
We can’t recommend you run the risk – get everything in order to take detailed accounts ahead of time and you’ll be in a much better place going forward.