How To Start A Recruitment Business

Transcription

1 The ultimate guide to setting up a recruitment company sonovate.com

2 Contents >>> Welcome 3 What are you waiting for? 4 Why do it? 6 Technology Solutions 12 Winning Clients 15 Finding Candidates 17 Top five mistakes made when setting up a recruitment business 24 About the Authors 25 What you need 7 Recruiting contractors 18 Registering your business 8 All by myself 19 Choosing your specialism 10 Legal and ethical stuff 20 Naming your business 10 Conclusion 22 Setting up an online presence 11 Case Study 23 2 sonovate.com

3 Welcome >>> The UK recruitment sector employs over 100,000 people, places 1.3 million people a week and generates revenue of 26bn a year, according to the REC. And savvy recruiters are cashing in on the opportunities it presents according to Companies House, over 1,490 recruitment businesses are set up a year, and this number is growing rapidly. In The Ultimate Guide to setting up a recruitment company, we provide an overview of everything you require to get off the ground and start earning as an independent recruiter. 100,000 people employed by the UK recruitment scetor 1,490 recruitment businesses set up each year 26bn annual revenue generated by the UK recruitment scetor sonovate.com 3

4 What are you waiting for? >>> We ve spoken to hundreds of recruiters to get feedback on what s stopping them from setting up their own business. While some think starting your own business is only for the brave, the reality is that in the recruitment sector, setting up a business isn t as hard as you might think. Here are some of the top excuses we hear: There s too much to do. Starting a business via traditional methods can result in a long list of to do actions which can be a distraction from the very important task of recruiting. To make your business a success you will need to do everything on your list and do them well. But what if you could rely on someone else to complete that task list for you? Sonovate is that someone, it will handle all of the preliminary and ongoing tasks of business management for you so you can get on with recruiting. I m worried I won t earn enough. If you are already in a recruitment job, then this simply cannot be true. If you weren t earning enough to justify your salary, your employer would soon I don t know where to start. Sorry, but we don t believe you. The fact that you ve downloaded this ebook and are reading it means you ve already started! The Only Thing We Have to Fear Is Fear Itself Franklin D. Roosevelt 4 sonovate.com

5 be onto you and, let s face it, you d be out on your ear! In fact, running a recruitment business, you keep most of your billing which means you can bill less while your business grows and yet earn considerably more. Don t believe us? Try the Sonovate Recruitment Income Calculator to see for yourself. Setting up a business requires substantial investment. Wrong again! In theory all you need to set up a recruitment business is a computer and the right attitude. And if, for example, you set your company up through Sonovate, you don t even need to worry about cash flow Sonovate ensures that you get paid immediately, so working capital doesn t hold you back. That s right, legal work, contracts, invoicing, chasing payment and much more are all handled on behalf of our Sonovate businesses I don t know anything about running a business. Okay, we ll give you this one recruiters (and we speak from our own personal experience) generally have little experience of all the boring admin involved in running a business. You might be the exception, but either way the reality is that you don t need to be a business boffin, a finance fiend, or a master of marketing. That s because, you can subscribe to Sonovate and all the admin is taken care of. That s right, legal work, contracts, invoicing, chasing payment and much more are all handled on behalf of our Sonovate businesses. The idea is to take the pain out of running a business and it s all done for a monthly subscription of 199 plus a small percentage of your fees. legal work, contracts, invoicing, chasing payment and much more are all handled on behalf of our Sonovate businesses. The idea is to take the pain out of running a business and it s all done for a monthly subscription of 199 plus a small percentage of your fees. sonovate.com 5

6 Why do it? >>> Now that we ve shown you how much you can earn, how little you have to make up front and proven that most of your excuses hold no water, you might be considering taking the plunge and setting up on your own. But besides the vast potential earnings, you may be wondering what you will get out of running your own recruitment business. The top five reasons for setting up a recruitment business are: The ability to earn more than you could in any recruitment job. Time flexibility: set your own hours. Location flexibility: recruit from wherever you like as long as you have an internet connection. Work in the sectors that are most profitable to you: you get to One day your life will flash before your eyes. Make sure it is worth watching Unknown choose your niche and geography or territory. Profile: it s far easier to build your own profile in the industry when you re a recognised entrepreneur. Choose your niche and geography or territory 6 sonovate.com

7 What you need >>> Right, you ve fought off all your fears and excused all your excuses, and now you re ready to start your recruitment business. We ve listed below all the things you need: Ideally, some level of recruitment expertise Computer with an internet connection Phone Drive to succeed 199 a month a month covers most of your business expenses until you start earning - absolutely everything you need to run your own recruitment business. Over the next few pages we ll talk you through the individual processes involved in getting your business off the ground. But always bear in mind that Sonovate Associate Businesses get all of this taken care of for them. Yes, it s that simple, if you do it through Sonovate of course. That 199 sonovate.com 7

8 Registering your business >>> The first step is to set up a limited company, and you ll need to tell the government you re doing this (so that they can make sure you pay your taxes!). This process is called incorporation and it s done through the Registrar at Companies House or through subscription with Go Limited. Go to the Business Link website, download the application form (it s called an IN01), and submit it with your Memorandum of Association (submitting the names of all the shareholders and proving that they re willing to be involved), Articles of Association (outlining how the company will be run and what it does) and a cheque for 18. I want to put a ding in the universe Steve Jobs 8 sonovate.com

9 Alternatively, if this seems too longwinded and you just want to get started with the business of recruiting immediately, then we recommend you sign up to Sonovate. Accounting partner, Crunch, will handle all this stuff for you it s simple, fast and best of all, it s all included in the monthly subscription fee. Most people who set up recruitment businesses set up limited companies because of the financial protection they provide Note that there are other types of companies, such as sole traders and limited liability partnerships, but most people who set up recruitment businesses set up limited companies because of the financial protection they provide if your limited company falls on hard times, the maximum liability you hold is the money you invested in the business. Plus, there are great tax benefits to running your own business. sonovate.com 9

10 Choosing your specialism >>> Your business is set up and you re ready to go. The next choice you need to make is which sector to specialise in. Common sense says continue in the area you worked in before you were your own boss - you should have a good level of expertise and a strong network. However, you might be leaving your employer precisely because the sector doesn t suit you. In which case, you d be better to choose a sector that you like after all, it ll be easier to build relationships with clients and candidates if you know and are interested in their industry. You might want to remain a generalist, but there is evidence that shows specialist businesses that find a niche and develop their profile within it tend to do better. Naming your business >>> While the name you choose for your business on day one is semi-permanent, finding a name shouldn t take up too much of your time. It might feel critical, but remember that people do business with people - not companies -, so your own personal profile is always going to be more important. If you can t come up with a name for your company, then why not just name it after yourself? It didn t hold the Saatchi brothers back and it won t hold you back either (unless your surname is Donthirefrommeever). Very narrow areas of expertise can be very productive. Develop your own profile. Develop your own niche Leigh Steinberg 10 sonovate.com

11 Setting up an online presence >>> You don t need an ebook to tell you that if your recruitment business is to succeed, you will need to have an online presence (and by online presence we mean a website, advertising, social media and platforms through which you interact with your candidates and clients), where customers and candidates can source your contact details, and learn more about you. However, try not to get distracted by protracted side projects such as these or logo design in the early stages of your recruitment business it is far more important to start recruiting. These are the most important considerations when setting up a website: Design: While you don t need to hire a professional designer, it s important that your site looks professional. That means making it easily navigable with good images, a professional font, and visible contact details. Content: You might not need a professional designer, and the same goes for hiring a professional writer. However, we also know that putting thoughts down on paper can be time-consuming for some recruiters, so if you are one of these it might be worth hiring a copywriter to put your message across in a compelling and grammatically correct manner. You can find great copywriters on sites like ODesk, or just ask around, but make sure your copy is interesting and grammatically correct an unprofessional site can be a real turn-off for a CEO looking for recruitment support. At Sonovate, we offer all our businesses a fully branded website, enabling them to be online within minutes of setting up! The internet is becoming the town square for the global village of tomorrow, Bill Gates sonovate.com 11

12 Technology Solutions >>> It s 2012 and, while the most important piece of technology for your recruitment business remains the telephone, technology will still be the engine that drives recruitment business forward. You don t just need good technology, you need the best technology on the market. At Sonovate, we ve done our research and we re proud to present (drum roll please) the Technology is a gift of God. After the gift of life it is perhaps the greatest of God s gifts. It is the mother of civilizations, of arts and of sciences Freeman Dyson results: our top recruitment technology solutions: Customer Relationship Management (CRM) software CRM software has emerged from oblivion to become the one must-have tool for any business in any industry. And recruitment businesses are no exception. The right CRM software tool enables you to organise, Book Your Demo Sonovate combines all the technology you need to start and grow your business. Click here to arrange your demo. automate and synchronise all interactions with your clients and candidates (and potential clients and candidates). There are loads of CRM tools on the market, but we recommend Bullhorn we ve chosen them as our CRM partners because Bullhorn is the market leader. Our favourite features about Bullhorn: It incorporates everything you need, from to task and candidate management, all nicely integrated. It s cloud-based, which simply means you access it via a browser rather than having to download it. 12 sonovate.com

13 It is designed specifically for the recruitment sector.it allows recruitment businesses access to a host of other specialist tools through Bullhorn s Marketplace. It is constantly adapting and improving to keep pace with the needs of recruitment businesses and automatically updates itself! Job posting When jobs start rolling in, you ll need to be ready to post them onto job boards. If you ve ever tried to do this manually, you will know that this can be a time consuming and pretty expensive process. Enter Broadbean, the suite of tools that enable you to post to multiple job boards and recruitment channels at once and search through CV databases with ease. In fact, with Broadbean, the whole candidate management process is so easy that we decided to partner with them in our end-to-end recruitment business tool, and so access to Broadbean is completely covered by the Sonovate subscription. Tip: On top of the access to Broadbean, we ve also negotiated great deals with job boards all within the monthly subscription. Timesheeting If you re going to be recruiting contractors (see our section on recruiting contractors later on), you have two options: manage the paperwork yourself (and get buried in admin), or use timesheeting software to automate and streamline the process, saving you time and keeping your relationships with your clients and candidates on track. The solution we recommend for this is ETZ. We like it because it s efficient, easy to use and really slick these guys have spent 11 years honing this software and they process half a million timesheets a year. They know their stuff, and we really feel that with them, you are in good hands. And, like Bullhorn and Broadbean, an ETZ account is included in your monthly Sonovate subscription. sonovate.com 13

14 Accounting software Now now, don t skip this part, it s important. Deep down, you know you need your accounts function to work if you want your business to succeed. We have two pieces of advice for any entrepreneur when it comes to accounts: And yes, we know exactly which experts to recommend to you. We like Crunch they make accounting easy with their excellent software and their on-hand accountants. We like them so much that we have incorporated their software into the Sonovate service. 1. Keep up don t procrastinate until your growing pile of receipts starts taking over your house. 2. Bring in the experts if finance isn t your thing, don t try to change that. Instead, focus on what you do best (recruiting) and leave the accounting to the experts. 14 sonovate.com

15 Winning Clients >>> Most people who have been working in the industry for a while, have already built a good network of employers who trust them to help fill vacancies with talented candidates. However, as you know, setting up on your own is not as simple as transferring all your contacts to your new company as you will no doubt have a restrictive covenant to deal with, meaning you re not allowed to just poach clients from your previous employer. However, if you ve made a success of your recruitment career so far, you no doubt have the ability to win new business. If you re considering going it alone, you must have some confidence in your ability to win clients. We re not going to go into detail here about how to operate as a recruiter, but if you don t feel like a natural at business development, we ve provided a few hints below on how you can really build your client base quickly once you ve launched on your own. Make sure your online presence (LinkedIn profile, website etc) is clear, compelling and well-optimised. People will be far more likely to want to work with you if they can get to know you by reading your profile and learning about your specialisms. We cannot solve problems by using the same kind of thinking we had when we created them Albert Einstein sonovate.com 15

16 Make use of your low overheads when you set up on your own, you don t have to worry about payroll, office rental or employers liability insurance. So take advantage of your reduced expenses to offer competitive rates that employers simply cannot resist. This is a real opportunity to set yourself apart from your competition. And, your own personal bank balance won t be affected as the commission you earn is all yours. Build on your niche you ve proven your interest in a specialist industry, and clients will really appreciate working with someone who gets their business. As a recruitment business owner, you have chosen your industry because you re passionate about it or interested in it, and that should be very easy to convey to clients. Once you have your clients on board, and you start making your first placements, it s important that you keep your relationships professional. That means contracts, invoicing and debt collection need to be handled sensitively and efficiently. These might seem like small details, but they can be incredibly important when it comes to maintaining client service and developing your own reputation in the industry. And you can do these yourself, or you can outsource them. If you run your business through Sonovate, all this is covered under our agreement, meaning the Sonovate team issues your invoices, handles payments (including paying you!) and makes sure contracts are robust, signed and enforced. Simple! 16 sonovate.com

17 Finding Candidates >>> You don t need us to tell you that finding candidates is as important as finding clients when working as a recruiter. Your clients will have no interest in you if you can t produce the talent they need to grow their businesses. But how does running your own business affect your ability to source candidates? We believe it offers you a real advantage. That s because, as a recruitment entrepreneur, you have been able to choose which sector/ geography to work in. And you ve almost certainly chosen one that interests you, that you are passionate about and perhaps even one you ve worked in yourself. That means you will be able to relate to candidates in a way that larger agency recruiters might not. Not only that, but you ll be able to decide for yourself how you run your recruitment processes, without having to stick to the protocol and bureaucracy of a larger agency. That means you can tailor your recruitment approach to suit the candidates and clients you are working with, and that is bound to improve your success rate. Even in such technical lines as engineering, about 15% of one s financial success is due to one s technical knowledge and about 85% is due to skill in human engineering, to personality and the ability to lead people Dale Carnegie sonovate.com 17

18 Recruiting contractors >>> One of the biggest problems faced by recruiters setting up on their own is sourcing the finance required to recruit contractors. That s because contractors have to be paid on time, regardless of when the client pays, which can become a real problem for your company s cash flow. Your best bet is therefore to borrow money from the bank. This can be a real headache for many recruiters, and often one of the biggest barriers to going it alone. In fact, we ve heard so many complaints from recruiters about the pain of having to make personal guarantees when organising contract finance, that we ve negotiated with Barclays to offer all Sonovate businesses immediate access to contract finance as part of their Sonovate subscription. So if you don t want to go through the whole process of getting finance in place to recruit contractors on your own, then perhaps you could consider setting up with Sonovate. A bank is a place that will lend you money if you can prove that you don t need it Bob Hope 18 sonovate.com

19 All by myself >>> When you start your business, you will no doubt be recruiting from home, which means you could start to feel isolated. Hopefully you ll be attending so many events and networking enthusiastically with clients and candidates alike, that you ll relish the idea of a bit of down time. forums, such as RCEuro to keep them in the loop! However, if you do start to feel isolated, we recommend that you turn to social networks. All Sonovate Associate Businesses have access to Yammer, where they can network with like minded people, but any serious recruiter should be looking at LinkedIn groups, Twitter and Networking is an essential part of building wealth Armstrong Williams sonovate.com 19

20 Legal and ethical stuff >>> All professionals in all industries have legal and ethical issues to deal with. We firmly believe that your business cannot achieve sustainable growth if you don t behave within certain legal and ethical boundaries. Ethical guidelines We ve drafted a code of conduct that outlines the ethical guidelines we think recruiters should follow. We ask Sonovate businesses to sign up to the code, but it applies to any recruitment entrepreneur that wants to run an ethical business. Key principles include that recruiters: Document the recruitment process. Work to ensure that the client selects the best candidate for the vacancy. Keep candidates updated on the Character is higher than intellect Ralph Waldo Emerson progress of their applications. Never submit a candidate s CV for a vacancy without their permission. Provide accurate and quality advice to candidates. Don t let personal opinions sway how they treat candidates and clients. Legal stuff As a recruiter and a business owner, it s your responsibility to keep up to date on the laws affecting you and your business. We ve listed below the key Acts that you should be familiar with. Our list includes a basic summary of the purpose of each Act, but we urge you 20 sonovate.com

21 to do further research on your own to make sure you have a good grasp on your obligations: to date, and only using it for the purpose for which it was intended. Agency Workers Regulations: ensuring that employers do not breach the rights of agency workers. Equality Act 2010: ensuring every candidate is treated fairly. The UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code): ensuring that every job ad you post represents a real job and is fair and non-discriminatory. Data Protection Act: ensuring that client and candidate data is treated fairly, confidentially and professionally. This includes keeping personal data accurate and up sonovate.com 21

22 Conclusion >>> You now have all the information you need to set up a successful recruitment business, so your next step is simply to get started. This guide provides advice on doing it yourself, but if you want to get started in only a few minutes, then the Sonovate team is here to help. While as a Sonovate business you will enjoy greater flexibility and more earning potential, for your monthly subscription of 199 you will also get: and full CRM system provided by Bullhorn. Contrac t finance, thanks to the folks at Barclays. An online profile contributing to your online presence again. Timesheeting software from ETZ. Accounting and business admin from Crunch. Broadbean posting and search software, including discounted access to all major job boards. Access to a community of recruiters through internal network, Yammer. Invoicing, contracts and debt collection all taken care of you re paid your commission directly into your account on a weekly basis. If you want to get started in only a few minutes, then the Sonovate team is here to help 22 sonovate.com

23 Case Study >>> At the end of 2011 Andrew Longfellow left his role as a business manager at a leading international recruitment agency. In March 2012 he subscribed to Sonovate and established Samuel Frank Associates. The lack of risk was immediately appealing, says Andrew explaining his decision. I didn t need to gain financial backing nor did I have to have a large sum of money in place to ease cash flow. Tied into this was the fact that there was no risk of debt with my clients as Sonovate promised to handle all of these aspects of business on my behalf. Through Sonovate I realised that I could have the autonomy of running my own business without any of the unattractive aspects such as financial accountability. Three months later and Andrew s working days are unrecognisable: My lifestyle since subscribing to Sonovate has been fantastic. I have been building a successful and consistent business while enjoying amazing flexibility and a better work life balance than I have experienced in years. I don t know if I could have achieved this so quickly without the backing of Sonovate. sonovate.com 23

24 Top five mistakes made when setting up a recruitment business >>> Not keeping on top of the paperwork. Neglecting your online presence. Letting client relations fail because of poorly put together contracts or unprofessional invoices. Not making the most of social networks for maintaining client and candidate relations. Failing to specialise. 24 sonovate.com

25 About the Authors >>> Seasoned recruitment entrepreneurs Richard Prime and Damon Chapple are the founders of Sonovate, the end-to-end solution for anyone looking to set up a recruitment business. Sonovate is a unique recruitment model. By subscribing, experienced recruiters establish their own Associate Businesses supported by Sonovate s services. At the heart of Sonovate lies its Associate Businesses. Associate Businesses are limited companies established by recruiters when they subscribe to the Sonovate platform. As Sonovate subscribers, they get everything they need to run their recruitment business, from a branded website to contract finance, a full CRM system and accounting support. sonovate.com 25

26