How to Start a Recruitment Business

What Is Needed To Start-Up Your Recruitment Business?

If you are thinking of starting your own recruitment agency, you will naturally have reservations about what it will entail. Recruitment is certainly a fun and exciting industry to work in. Those who have been successful as recruiters tend to explore entrepreneurial opportunities, such as running their own recruitment firm. The Futurelink Group has created a helpful guide on how to develop your own successful business.

Research – This is a key component in starting any business. You will need to establish your niche and determine which sectors are growing. No doubt, as a senior recruiter or manager, recognising which pools to fish in are more apparent.

Create a Business Plan – Once you have established the sectors you want to recruit in and whether it is blue or white-collar (or a mixture of the two), a comprehensive business plan is essential. To get funding, a 10-15 page business plan will allow you to structure your start-up and provide confidence in lenders that you are serious and competent. Consider your short and long term goals & objectives, budgets, targets, fees/margins, unique selling points, hiring/expanding your team, staff wages & incentives.

Choose a Company Name – It seems like an easy task but this can be challenging considering your competition and the message you are trying to convey to your clients. Think carefully about the name and how it relates to the company’s core values and specialty. You can check what names are already taken in this handy Company Name checker.

Funding – Finance and budgeting certainly plays a key part of your planning and this often requires some form of funding, whether it’s from venture capital, partners, banks or factoring. You will need to take into account set up costs, office space, computer, CRM and payment systems, telephony, etc. For those struggling to find VC partners, a good alternative is factoring and discount invoicing solutions. Team Factors a partner of Futurelink Group, can help with cash flow and form part of the company’s back office.

Business Bank Account – In order to be fully operational, you will need to open a business bank account. You can use comparison sites like Money supermarket to compare interest rates.

Dedicate an Accountant – Hiring an accountant will make your business life far easier by managing accounts and cash flow, filing annual tax returns and VAT, and provide essential guidance on how to keep the company solvent. Futurelink Accountancy can help by offering a chartered accountancy service that includes company set up, outsource payroll, bookkeeping and general tax advice. The accountant will also be able to correctly set up your company name with HMRC and allow you to plan ahead for annual statements, corporation tax etc.

Also, please note that if your business VAT turnover, reaches more than £83,000 you must register for VAT.

Legal Requirements & Licensing – When setting up a recruitment agency, your business must comply with The Conduct of Employment Agencies and Employment Businesses Regulations 2003

Other legal requirements that are compulsory include:

  • IR35
  • HMRC: The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2015
  • Data Protection Act
  • AWR (Agency Worker Regulations)
  • UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code)
  • Equality Act 2010

When forming a new recruitment business, licences may apply depending on the nature of your start-up. For example, if you are recruiting in the healthcare sector you may need to register with the Care Quality Commission(CQC). In common cases, recruiters will need a UK Business license which enables you to process personal data. To find out if your business will need a license, use this License Finder Tool.

Business Insurances – When placing permanent or contract staff, you will need to consider what levels of cover is required to protect your business. Your clients will expect you to have most of the following insurances in place before partnering with them:

• Public Liability Insurance – This covers you for any physical damage or injuries in the workplace.
• Employers’ Liability Insurance – protects you against the cost of compensation claims arising from employee illness or injury, sustained as a result of their work for you. This could result in a £2,500 daily fine if not insured.
• Professional Indemnity Insurance – covers you for client’s financial losses, relating to any worker you have provided (relevant to contract staff only)
• Cyber and Data Risks Insurance – protect businesses and individual users from Internet-based risks, and more generally from risks relating to information technology

Contracts and Terms & Conditions – When bringing on new clients and placing workers, there must be adequate contracts in place. Naturally, we recommend seeking legal advice on putting these together and there are a number of templates available to you online, some that are free to use.

Select a CRM system – Customer Relationship Management is essential, in mind of keeping critical records, sourcing candidates and complying with GDPR for legal reasons. Consider protection of data too since this can cripple a business if getting this wrong. Data must be securely captured and retained, something that is often overlooked! Some staffing firms look at a fully bespoke system, but as a start-up, recommend a number of off the shelf solutions like RSM, Zoho and Salesforce. You can get a list of recommended CRM systems here.

Construct a Website & Build a Brand – The internet is a powerful tool and having a fully functional website is an absolute must! It can increase credibility and provide visibility for your business, attracting clients and candidates. If you want to put your own skills to the test, you can use website builders such as WIX, which are easy to use and cost-effective. Other advanced and complex website builders such as WordPress would require a skilled web designer to do the job for you. It’s important to incorporate SEO (Search Engine Optimization) into your web pages, blogs, etc to ensure that you are going to the maximum traffic flow to your website.

When it comes to branding you, you should keep it simple, yet eye-catching. To get started on your logo you could use services like Design Hill.

Tip: Keep the colour scheme, look and feel of websites, brochures, etc. consistent throughout.

How can the Futurelink Group help?

Futurelink Group have been established for over 27 years, serving contract workers across many sectors. With a variety of fully compliant payroll solutions, we can help cut recruitment business costs by up to 30%. Our umbrella solutions are fully compliant with HMRC, enabling you to streamline your operations and freeing you from administrative tasks so you can concentrate on your business.

Our payment solutions include: Umbrella(PAYE), CIS, Gross Payment (GPS), LTD.

Futurelink runs daily payrolls, (Monday-Friday) and twice on Fridays. All payments are same-day faster payments, once we have received funds. Contract workers have an easy to use client portal to ensure the service is as user-friendly as possible.

If you require any more information on our payroll services, please contact us on 01923 277900 or email

Team Factors , one of Futurelink Group partners, provide bespoke factoring services. If you need any more information please call 01923 882910 or email