Funds To Start Your Own Recruitment Agency
Ah yes! but there's more to running a Recruitment Agency (or any business) than just earning the fees and seeing them being paid into the bank account. So do be careful, before you even think about going down this route, think seriously whether running a business is something that you are cut out for. So, before reading on, consider this. If you are going to open a Recruitment Agency you will need to take risks, and probably embrace a much less secure lifestyle. Also before reading on please be aware the rest of this article is not being written to persuade you to start up, nor does it present expertly qualified financial advice, it simply recounts examples from personal experience. That said, we will now assume, for the moment, that you "know" the Recruitment Agency business already, and we will have a look at the funding side of things. Currently, as manager of a (computer) Recruitment Jobs Board I am often approached by folk looking for free advertising while they are getting established. Bad idea! Highly probable that the big companies with lots of funds will see them off! You would, in fact need quite substantial funding to get a Recruitment Agency started, and have a reasonable chance of survival. Even when you started making placements you would not receive the placement fees for several months. It would probably be wise to think in terms of needing around six months operating costs up front. At the time of my own entry into the Recruitment Agency field, many years ago, all sorts of things were very different, but for what its worth these were the alternatives then. In those days there were various means of getting loans from a bank. A business loan, based on a business plan ... the preparation of which was a valuable exercise in itself. A secured loan (with your house as security?) or an unsecured loan. But things may well be quite different now. I was fortunate in that when I left employment to start my Recruitment Agency business I had to give my previous employer three months notice. With that length of notice one is able to get quite a bit of preparatory work done in one's spare time: setting up an office, setting up a web-site, making initial approaches to get vacancies, etc. I suppose that I was also fortunate again that it was easier to get initial interest free credit periods on credit cards in those days. I had several and moved the credit from one to the other successively until after about 18 months I was able to pay it all off from Recruitment Agency fees earned. But I wouldn't recommend trying to do that in this day and age. My first year was financially erratic, and I had only £250 left in the bank at they year's end. But by that time the business was "running" and the fees were coming in. Other ways of raising money? Well you could look for other folk to invest in your venture (to buy shares, if you like) but this has its drawbacks as you have to answer to them eventually. So, think hard and long before taking the plunge to open a Recruitment Agency. Its a quite different kind of life, and you will certainly need access to quite a bit of capital to start-up.
About the Author: John Bult runs an internet job site advertising recruitment agency jobs in the UK.
More articles by john@ukcareers.co.uk
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