Is it a risk to start a recruitment business in 2023?

Let’s start off by acknowledging that seemingly every year brings about new challenges, new dramas and new potential concerns and anxieties about the state of business and the state of the world!

2023 is no different. No pandemics or Brexits or new wars on the horizon [we hope], but instead the media is warning at full volume of the upcoming economic recession.

Media outlets always have a lot to say about the pitfalls and the problems we’re going to face as individuals, as families, as communities, as businesses and as a nation. But let’s remember that the media’s job is to put news through a megaphone… often embellishing and inventing to make sure everyone is listening.

So, the general feeling in the market is a cautious one right now. To a certain extent, that is understandable!

However, for those waiting for the right time to grab the reins and start their own business it is all too easy to find an excuse to NOT take the leap.

It is never going to feel like the optimum time, coming to terms with that and having the guts to break out and launch your business is always going to be tough! Regardless of the climate and condition of the market.

Regardless of the circumstances around you, and the current media hype/storm/disaster(!), if you have decided that forming your own recruitment business is the route you want to take, then there is nothing that can stop you. Seriously!

The scariest question when you boil it down is really; how much money do I need to start my own recruitment agency?

The answer to that question is: really not a lot!

Assuming you have a computer and a phone you can start and run a successful freelance recruitment business with a nest to nothing behind you.

Think about the two most important costs of a freelance recruitment agency –

1. The payroll for the temps
2. The software to be able to effectively manage the back office of the business

There are costs that an average agency will incur over time as it grows… think website, a CRM, job boards subscriptions and marketing support for example, but none of these are integral in getting the business off the ground and starting to create a profitable business.

The most successful recruiters that we see and support at Quba Solutions are those that are focused, driven and determined to succeed.

By its very nature, a freelance focused recruitment business creates a cash flow issue, due to having to wait for your invoices to be paid by your clients whilst having to pay your workers at the same time. This is the true cost of running a recruitment business and potentially where large debts can start to build up and spell the end of a company. before its really begun. This is where Quba can come in and offer exactly the support you’ll need.

Quba’s invoice finance solutions will not only pay your temps every week, but will also pay you the margin gained, providing an instant income into the business. We provide full back office services that match, and in many cases beat those of any blue-chip corporate agency, enabling your new business to compete at the highest level without such expenses as offices and staffing, so you can get billing straight away.

There are no signing up fees, minimum monthly fees or start-up costs – our solutions are charged based upon your weekly turnover. As such there is no need for financial investment prior to starting your business.

The only requirement for any cash reserves for a new agency is to cover personal costs (such as your mortgage) whilst the business is building over the first couple of months.

There are other complex funding options and potential investors available that will offer a salary or funding injection at the start when forming your business to tide you over during this period, however they tend to be at the expense of either equity in the business or a far more complex funding model that often doesn’t include many back office services such as payroll or credit control.

Building a successful temp desk will quickly provide the cashflow needed to cover your personal costs when supported by a funding partner like Quba. For example, placing 5 temps on £10 pay/£15 charge placements would net the business in the region of £450 per week.

If you would like to see what the platform can do and how Quba can support you as you launch your recruitment business, you can reach one of our professionals any time on 01305 233178 or contact us here and we can book you in for an informal chat and a demo.