It has never been easier to start a business. Prospective entrepreneurs have an incredible range of tools at their fingertips and cutting-edge technology and communication is helping new businesses to reach their customers quicker and at a lower cost. The digital age has helped to reduce the barriers that many start-ups struggled to overcome before the days of the internet and now there is endless advice, useful products for small businesses and of course investors available 24 hours a day, 7 days a week, just a click away. Businesses don’t need expensive, pre-existing infrastructure (and overheads) before they can start to make money, and they can exist virtually, without the need for a flashy office or indeed any business premises at all.
Recruitment companies especially can take advantage of this ease of access. Recruitment is a people business, with no physical products produced and very little needed to set up in business. Most small recruitment firms need a business phone line, website and access to recruitment tools like job boards, with sales and networking skills, rather than a stand-out product and pricey business infrastructure, helping recruitment firms on the path to success.
Setting up a recruitment company is by no means easy, but the key is to get the basics right first. Deciding on a specialism and branding approach is a good first step, with the market flooded by generalists who try to fill any role that comes across their desk, and of course the established names who can hire hundreds of staff to cover small areas of the market. IT and finance recruitment tend to be very lucrative, with both business functions having thriving contract and permanent markets in the UK, so could be a starting point for a specialised agency.
Building your profile and getting your name out there is becoming a lot easier thanks to sites like LinkedIn. Advertising jobs and finding candidates across a variety of job boards is easy with inexpensive tools like Broadbean and free-to-use sites like Indeed and the Government Gateway jobseeker service keeping costs low.
The difficulty with working as a freelance or boutique recruiter however is the competition. Big names like Randstad, Hays, Michael Page and Reed offer an expansive service and competitive rates, making it difficult for smaller recruiters to match their service. Small recruiters often have to pursue a strategy of picking their fights, building strong relationships with local businesses before attempting to grow and expand their markets and offerings. Success certainly doesn’t happen overnight and recruitment start-ups must expect months with little or no income in the early days as their prospective placements and market reputation gain traction. New recruiters often go off chasing high-profile companies and desirable candidates, instead of focusing their priorities on the ‘bread and butter’ placements that make up the foundations of their income.
As with any business, having the right back-office functions is of extreme importance. Things like bribery, equal-opportunities violations and competition regulations can often spell disaster in the recruitment world if they aren’t followed. Mix this with clients that don’t pay and an often high level of staff turnover in the recruitment world and recruitment businesses can soon end up in financial difficulties.
The additional complication of relying on a virtual office is that are reliant completely on your technology. Issues such as a broken monitor, corrupted hard drive or a virus can bring your company to a halt. These issues grow as your company does, as you rely more and more on the things in your office. In order to ensure that there’s no disruption to your business, you need to cover yourself, and have a safety net. Having the right insurance is an easy way to provide the right security, and partnering with a back-office solutions provider is another simple way to take money headaches away, letting you focus on growing your recruitment business. With a service-based industry, your word and your recommendations are also very important, with professional indemnity insurance also providing additional security.
Being a recruiter certainly isn’t an easy career, with resilience and a positive attitude needed when the going gets tough. It can certainly be a lucrative enterprise however, as long as a passion for people and solid business strategy are in place.
