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Warning! Are You Ready to Set Up a Recruitment Agency?

recruitOver 1,490 new recruitment agencies started in 2011, according to Recruiter, and the number of recruitment start-ups is likely to increase as the economic climate improves. If you work in a recruitment agency, you are probably tired of making a lot of money for someone else. You’ve probably got friends who are successfully running their own agencies. The time is right, you decide, to make the leap and start up your own recruitment business. But you need more than money and a few years of experience in the industry to make a success of a recruitment start-up. Ask yourself these questions to find out if you are truly ready to go at it alone

Do You Have Solid Financial Resources in Place?

Plan your finances meticulously before you start thinking about your logo or how many office chairs you need. You must have access to enough capital to run your business while you are not making any money. Many people overlook the fact that, for many months, you will not be bringing in a lot of cash. Even if you hit the ground running and get clients placed at once, companies won’t pay immediately. Do you have a pot of money available to live while you are not drawing in an income?

Do You Realise How Much Paperwork You Need to Complete?

Running your own recruitment business is not just about taking long lunches whenever you feel like it and working in your pyjamas from home. You need to be serious about completing all the required paperwork concerning payroll, taxes, and insurance. If you don’t have these skills, consider hiring someone who does or outsourcing key financial tasks to another company. In addition to financial paperwork, you also need effective systems in place to track contacts, keep records of placements, and chase invoices.

Do You Have Help?

Unless you are an absolute powerhouse with no home life, you’re going to have to get some help at some point, whether that is help with administration, web design, or marketing. Factor the cost of this into your budget. Don’t plan on doing everything yourself unless you have a long lead-in time.

Can You Live Without Paid Holidays?

And sickness pay, and bonuses, and an expense account – going solo means you are on your own, and you need to pay for your own holidays (or not take them) and put money away to cover your bills if you fall sick. If you need the stability of a pay cheque, then consider staying where you are at your agency. It is not for everyone – setting up a recruitment agency means living with insecurity and constantly wondering how to organise your own pay as well as meet your financial obligations.

If your answers to these questions lead you to the conclusion that setting up a recruitment business is still very much within your grasp, then go for it – plan carefully, and enter into the new venture with enthusiasm and creativity. You will have to work hard, but the rewards are impressive for the people who succeed.

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