5 Steps To Setting Up Your Own Recruitment Agency

Step 1 – Registration

Register Your New Recruitment Business

To officially start your recruitment business, you need to register it as a limited company. This process can be done online through the UK government’s company registration portal: Register your company.

Cost: £50
Processing Time: Usually within 24 hours

Choosing a Company Name

1. Think Long-Term:

• Select a name that will remain relevant as your business grows and enters new markets. A name that’s too specific to your initial offerings might limit future opportunities.

2. SEO Considerations:

• Consider incorporating keywords into your company name that potential clients might use when searching for recruitment services. This can improve your visibility on search engines like Google.

3. Future-Proofing:

• Avoid names that are too personal or tied to your identity if you plan to eventually pass on the business to another CEO. This makes the transition smoother and maintains the brand’s integrity.

Taking these factors into account will help ensure your business name is effective, adaptable and conducive to growth.

Step 2 – Insurance

Ensure Your Business Has the Correct Insurances

Having the right insurance is crucial for protecting your recruitment business and complying with legal and client requirements. Here are the essential types of insurance you need:

1. Public Liability Insurance (PL):

• Covers claims made against your business by clients, contractors or the public for incidents occurring on your premises or as a result of your business activities.

2. Professional Indemnity Insurance (PI):

• Protects your business against claims of professional negligence, errors or omissions in the services you provide. This is vital for maintaining trust and covering potential legal costs.

3. Employers’ Liability Insurance (EL):

• A legal requirement if you employ staff. This insurance covers claims from employees who are injured or fall ill as a result of their work.

Your end clients will likely require these insurances and may ask to see the certificates to ensure compliance and protection.

Recommended Insurance Partner

For tailored insurance solutions, consider partnering with specialists who understand the unique needs of recruitment businesses. QUBA Solutions partners with Sutton Winson, a provider experienced in offering comprehensive insurance packages for both established and new recruitment firms.

By securing the appropriate insurances, you safeguard your business against potential risks and demonstrate professionalism and reliability to your clients and employees

Step 3 – Banking

Setting Up a Business Bank Account

As a limited company, your business is considered a separate legal entity. This means it must have its own business bank account. Having a dedicated business account helps you manage your finances more efficiently, keep personal and business expenses separate, and maintain accurate financial records.

Our Recommended Banking Partner

To facilitate this process, we have partnered with Tide bank, known for its user-friendly services tailored for small businesses. By opening a business account with Tide through our promotion, you will benefit from:

1. A £50 Welcome Bonus:

• Receive £50 as a welcome bonus when you open your business account with Tide.

2. One Year of Free Bank Transfers:

• Enjoy one year of free bank transfers, saving you money on transaction fees during your crucial first year of operations.

Benefits of a Business Bank Account

1. Professionalism:

• Using a business bank account enhances your credibility with clients and suppliers, showing that you are running a legitimate business.

2. Financial Management:

• A separate business account makes it easier to track income and expenses, manage cash flow, and prepare for tax filings.

3. Legal Compliance:

• Keeping business and personal finances separate helps ensure compliance with legal and tax obligations.

By setting up a business bank account, you lay a solid financial foundation for your recruitment business, making it easier to manage your finances and demonstrate professionalism to your clients and partners.

Step 4 – Finance and Back Office

Securing Recruitment Funding and Back Office Solutions

To ensure smooth operations and sustained growth, your recruitment business needs reliable funding and an efficient back office platform. Managing these aspects effectively allows you to focus on your core business activities without being bogged down by administrative tasks.

Comprehensive Back Office Support from QUBA Solutions

At QUBA Solutions, we provide a full suite of back office services designed to streamline your business operations:

1. Invoicing:

• We handle all your invoicing needs, ensuring that your clients are billed accurately and on time.

2. Credit Control:

• Our team manages credit control, helping you maintain a healthy cash flow by ensuring timely payments from clients.

3. Payroll:

• We take care of payroll processing, ensuring that your workers are paid accurately and promptly.

4. Debt Insurance:

• Protect your business from bad debts with our debt insurance service, giving you peace of mind and financial stability.

5. Terms of Business:

• We prepare and manage the terms of business for your clients, ensuring clear and legally sound agreements.

6. Assignment Schedules:

• Our platform handles the scheduling of assignments for workers, clients, and HMRC reporting, ensuring compliance and efficient operations.

7. Timesheets:

• We provide easy to use timesheets, ensuring all hours are tracked and reported efficiently. Workers can download our free timesheet app – or upgrade to an app branded with your colours and logo!

By partnering with QUBA Solutions, you can eliminate the burden of back office management, allowing you to focus on growing your recruitment business.

Get in Touch

Discover how QUBA Solutions can support your business growth and operational efficiency. Contact our friendly team today to learn more about our services and how we can tailor them to meet your specific needs.  Contact QUBA Solutions now to speak to our friendly team.

By securing the right financial support and leveraging comprehensive back office services, you can ensure your recruitment business operates smoothly and efficiently, enabling you to scale and succeed.

Step 5 – Accountancy

Hiring an Accountant to Manage Your Finances

Engaging a professional accountant is crucial for managing your finances efficiently and ensuring compliance with various regulations. An experienced accountant can offer invaluable guidance and support, particularly in the recruitment sector where financial management can be complex.

1. VAT Registration:

• Assistance in registering for Value Added Tax (VAT), which is essential for charging and reclaiming VAT on your business transactions. This ensures you comply with HMRC requirements and avoid potential penalties.

2. PAYE Registration:

• They will help you set up Pay As You Earn (PAYE) for managing income tax and National Insurance contributions for your employees. This is crucial for adhering to payroll regulations and maintaining accurate financial records.

3. NET Status Registration:

• If your recruitment business supplies workers to the construction sector, they will guide you through the process of registering for the Construction Industry Scheme (CIS) to obtain NET status. This is essential for managing tax obligations specific to the construction industry and ensuring compliance with sector-specific regulations.

Benefits of Engaging a Specialist Accountant

1. Financial Expertise:

• With a specialist accountant, you gain access to expert knowledge in managing recruitment finances, helping you navigate complex regulations and optimise your financial performance.

2. Compliance Assurance:

• Ensuring your business adheres to all relevant tax and employment regulations mitigates the risk of legal issues and financial penalties.

3. Time Savings:

• Delegating financial management to a professional allows you to focus on core business activities, driving growth and operational efficiency.

By hiring a specialist accountant, you can ensure your recruitment business operates smoothly, remains compliant with regulations, and is positioned for financial success.

Additional requirements that we’d recommend to set up a successful recruitment agency…

1. CRM – Customer Relationship Management

QUBA Solutions offers a financial management platform called DynamiQ, which can also function as a basic CRM (Customer Relationship Management) system. A CRM system is essential for managing, tracking, and storing information related to your company’s current and potential customers. This tool will help you:

• Organise Customer Data: Payment, timesheet, agency, client and candidate information that is updated regularly – all in one place.
• Improve Customer Service: Access detailed customer profiles to provide personalised service and quick responses.
• Analyse Customer Behaviour: Using DynamiQ you can see individual client and agency trends in the areas of business that you are trading. 

2. Website – Building Your Online Presence

Creating a website is crucial for establishing your online presence. The cost of a website can vary greatly depending on the functionality and features you need. Here are some considerations:

• Basic Website: Includes essential pages such as Home, About, Services, and Contact. Suitable for startups with a limited budget.
• Advanced Functionality: Incorporates additional features like job listings, application forms, candidate portals, and client dashboards. The more features and interactivity, the higher the cost.
• Responsive Design: Ensure your website is mobile-friendly and provides a seamless user experience across all devices.
• SEO: Implement SEO best practices to improve your website’s visibility on search engines and attract more organic traffic.

3. Business Plan – Strategic Planning

Developing a comprehensive business plan is vital for differentiating your recruitment business from competitors. A well-crafted business plan should include:

• Market Analysis: Understand your target market, industry trends, and competitive landscape.
• Unique Selling Proposition (USP): Identify what sets your business apart and how you will attract clients and candidates.
• Financial Plan: Outline a three to five-year financial projection, including headcount, sales data, revenue forecasts, and expense estimates.
• Operational Plan: Detail your business operations, including recruitment processes, client management, and service delivery.
• Goals and Objectives: Set short-term and long-term goals to guide your business growth and measure success.

4. Shareholders Agreement – Defining Partnership Terms

A shareholders agreement is essential for any business partnership. It sets out the rules and restrictions for shareholders, ensuring clarity and preventing disputes. Key elements to include are:

• Good and Bad Leaver Provisions: Define the terms under which shareholders can leave the company, and the consequences of each scenario.
• Roles and Responsibilities: Clarify the duties and expectations of each shareholder, including weekly working hours, holiday entitlement, and decision-making authority.
• Profit Distribution: Outline how profits and dividends will be shared among shareholders.
• Conflict Resolution: Establish procedures for resolving disputes between shareholders.
• Exit Strategy: Plan for the potential sale or dissolution of the business, detailing how assets and liabilities will be handled.

Think of a shareholders agreement as a “Prenup” for your business, setting out what happens if things go wrong and ensuring all parties are protected.

By considering these additional aspects, you can build a strong foundation for your recruitment business, ensuring it operates smoothly and is well-positioned for growth.

Take Your Recruitment Business to the Next Level with QUBA Solutions

Starting and growing a recruitment business can be challenging, but with the right support, you can achieve remarkable success. At QUBA Solutions, we provide comprehensive services tailored to your specific needs, allowing you to focus on what you do best – connecting talent with opportunities.

Why Choose QUBA Solutions?

• Advanced CRM with DynamiQ: Manage, track, and store customer information effortlessly with our integrated financial management platform.
• Seamless Back Office Support: From invoicing and payroll to credit control and debt insurance, we handle all the administrative tasks. We also provide easy to use timesheets (available in a handy branded app). 
• Expert Accounting Services: Ensure you stay compliant with VAT, PAYE, and CIS requirements.

Get Started Today!

Don’t let administrative burdens and financial complexities hold you back. Partner with QUBA Solutions and experience the difference that expert support can make.

Contact QUBA Solutions now to discuss how we can help you build a thriving recruitment business.