Starting a recruitment agency.

[Du1point8]

What are the average startup costs?

Have a client that is has been messed about by recruitment agencies in the past and needs some contractors very soon.

My business partner and I have access to people in the industry through our networks.

So have been asked in a roundabout way if we would like to help him out, sorting out the contractors using our contacts and sending them across for him for usual contractor fee rates (10-15% per day).

What are the costs of setting up an agency that is only going to trade for a particular client and thats it?

Insurance, what type is needed as we make only the intros/interviews and then if taken on we have the retainer fee, but the contractor should have their own insurance correct? I know I did when I as a contractor so is there just a standard liability insurance or anything else?

Contracts... got that sorted.
Business... got that sorted.
Going on the jobs boards is £XXX a month I know.

So what else is needed?

This may or may not get off the ground... Official meeting is in 10 days when company owner has sorted his business deals in Singapore.

[simonrockman]

I hate to be a damp squib, but given the paucity of jobs I think this is a very difficult time to go into the recruitment business. Most people can recruit without having to use an agency - just by asking friends.

Simon

[randlemarcus]

simonrockman said:

I hate to be a damp squib, but given the paucity of jobs I think this is a very difficult time to go into the recruitment business. Most people can recruit without having to use an agency - just by asking friends.

Simon

I think that's the basis of the OPs idea - the chap he is supplying has no friends (or at least no geeky friends), and thus the OP can sit there and skim 10/15% simply by using LinkedIn.

DP - have you got a clear plan as to how you will cover the outgoing timesheeted invoice costs when your chap decides to change your payment terms to 60 days?

[Du1point8]

randlemarcus said:

simonrockman said:

I hate to be a damp squib, but given the paucity of jobs I think this is a very difficult time to go into the recruitment business. Most people can recruit without having to use an agency - just by asking friends.

Simon

I think that's the basis of the OPs idea - the chap he is supplying has no friends (or at least no geeky friends), and thus the OP can sit there and skim 10/15% simply by using LinkedIn.

DP - have you got a clear plan as to how you will cover the outgoing timesheeted invoice costs when your chap decides to change your payment terms to 60 days?

Almost right, but no need of linkedIn to the contacts we have, most are personal.

Almost forgot the payment terms needing to be sorted... My business partner is a negotiator for contracts on exactly this style of working so should be ok on that front to make it water tight, but will have a think about that one to make sure there is a plan B if the payment terms changes.

[Streetrod]

Starting an agency is pretty simply, all you need is a desk a phone, a spread sheet to act as your applicant tracking system and a factoring company to cover you financially until the invoices start rolling in.

But to do it properly you will dedicated staff, who know how to mine databases correctly, a dedicated applicant tracking system that integrates all your invoicing, timesheets and contract production etc (They can do many other things depending on how much you want to pay)

But the key to any good agency is the right staff. There is a reason why so many Rec to Rec agencies now exist. A good consultant is worth their weight in gold, get the right one and you will not believe how much money they can generate, get the wrong one and they can sink your company, especially a start up

[MoelyCrio]

Rec to Rec agencies? You learn something new every day.
Genuine Yo Dawg moment!!

[mondeoman]

If you know all of the contractors already, why do you need access to job-boards for mining and advertising?

[V8mate]

simonrockman said:

I hate to be a damp squib, but given the paucity of jobs I think this is a very difficult time to go into the recruitment business. Most people can recruit without having to use an agency - just by asking friends.

Simon

Also, the OP may well have a good list of applicant contacts, but surely the toughest bit of sustaining an agency is persuading new companies to choose them as their selector of choice. You, correctly, point out that companies will be more cautious about adding an agency's commission to their search and selection costs, but those companies who would wish to utilise that route have a huge choice of very hungry agencies chasing their (limited) work.

[Du1point8]

V8mate said:

simonrockman said:

I hate to be a damp squib, but given the paucity of jobs I think this is a very difficult time to go into the recruitment business. Most people can recruit without having to use an agency - just by asking friends.

Simon

Also, the OP may well have a good list of applicant contacts, but surely the toughest bit of sustaining an agency is persuading new companies to choose them as their selector of choice. You, correctly, point out that companies will be more cautious about adding an agency's commission to their search and selection costs, but those companies who would wish to utilise that route have a huge choice of very hungry agencies chasing their (limited) work.

Not really wanting to sustain the agency...

Its a tool to help out business partners friend out, so would be used to help him for the duration of the project and then shut up shop.

He gets his contractors and we get a % of cash coming in on a regular basis for the contractors we are getting retaining fees for.

Nothing more than that, but obviously would need the company setup as a separate entity, so wanted to make sure all the bases were covered and we know what we might get ourselves in for, before we meet and say yes to the guy.

[edc]

Knowing "all" the contractors is great but are they available? Will you actually have enough of them to work for the rate, who want to work there and for the duration needed?

[V8mate]

Du1point8 said:

V8mate said:

simonrockman said:

I hate to be a damp squib, but given the paucity of jobs I think this is a very difficult time to go into the recruitment business. Most people can recruit without having to use an agency - just by asking friends.

Simon

Also, the OP may well have a good list of applicant contacts, but surely the toughest bit of sustaining an agency is persuading new companies to choose them as their selector of choice. You, correctly, point out that companies will be more cautious about adding an agency's commission to their search and selection costs, but those companies who would wish to utilise that route have a huge choice of very hungry agencies chasing their (limited) work.

Not really wanting to sustain the agency...

Its a tool to help out business partners friend out, so would be used to help him for the duration of the project and then shut up shop.

He gets his contractors and we get a % of cash coming in on a regular basis for the contractors we are getting retaining fees for.

Nothing more than that, but obviously would need the company setup as a separate entity, so wanted to make sure all the bases were covered and we know what we might get ourselves in for, before we meet and say yes to the guy.

Is this chap a connection of yours on Linkedin? If so, your connections are very nearly his. Why not bank yourself a massive load of favour and put him in touch with likely candidates for nothing?

[Du1point8]

Meeting is in 10 days for project owner to decide if he would like to do it this way... so this is back ground info Im trying to obtain, nothing more concrete than that at the moment.

The guy running the project is nothing to do with me on LinkedIn and the industry is completely separate from IT and Investment (all my contacts are IT and finance on LinkedIn)...

This is a new sector that I have contacts in that is not on usual social media.

[mondeoman]

Are you paying the contractors or is he?

[Du1point8]

mondeoman said:

Are you paying the contractors or is he?

Meeting at 4pm today to discuss this part further.