It may seem obvious but when you start your recruitment business, the money you put aside is never enough, but with careful house keeping you can get it to spread much further, particularly as Banks are not keen to help in your first year.
Apart from salaries and advertising one of the biggest costs will be office space. It isn’t so much the cost you need to worry about; it is the contract that you sign. I have a huge warning here, avoid contracts that tie you into more than 3 to 6 months you could live to regret it, I learnt this the hard way.
The best strategy is to work from home when you start, and with recent advances in technology and the common use of virtual offices, there really is no need to have a office. OK you may feel the need, but you will be putting the company under a huge strain. Wait 3 to 6 months, get regular business and increase the revenue you have on deposit for a rainy day. When you have built this financial reserve, it may then be worth looking at offices, but consider serviced offices at the start such as Regus. as they enable you to rent office space on a month to month basis, without a huge deposit. Obviously working from home is difficult but if you are motivated to become a successful recruitment consultancy, this shouldn’t be a distraction.
Company brochures, letter heads, business cards a couple of years back were necessary, but with emails and your own colour printer you can avoid these printing costs. I don’t think I have ever had a business enquiry from a brochure, in fact when I started I decided that I wouldn’t buy any letter heads until I sent my first invoice.
So apart from the cost of setting up the company with the accountants and organising relevant company insurance, the only other cost you will have is a computer, a printer, broadband connection, database software, Skype, fax and a phone.
In regards to Skype you can have your own number so that you never miss a call, as it can be redirected wherever you are. I used to use a virtual office to do this, but they took so long in answering and not passing on the message, it was safer not to use them, and of course I saved money in the process. There are alternatives, but I have only used Skype and I have been more than happy, although the quality could have been better for mobiles. Saying all that the fact you can manage calls and see who is calling you certainly makes you more efficient.
Recruitment Software is really worth the investment, as it will save you at least 2 hours per day, even against a general contact database such as ACT or Maximiser and it doesn’t need to be expensive. I used to use Arithon, which at Â£50 per month, makes it very easy to budget for. (Please note having used Arithon for the last 2 years, I am now their Sales Manager)
The only other big expense is advertising, and it can be so easy to waste money if you get it wrong. I will assume that you will have some idea what works, as an ex Recruitment Consultant or Manager, but what I do suggest is you look at other means of advertising without spending a penny, as it will make you a better Consultant at the same time.
So to finish the only area you should spend as much as possible, is on telephone calls, as this will directly relate to money in your pocket and don’t forget if you look after the pennies the pounds will look after themselves.
Tags: recruitment, recruitment consultancy start up
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