How to Start a Recruitment Business

Tuesday, April 30, 2013

How to Start a Recruitment Business

Starting a recruitment business typically involves using your skills in locating, interviewing and hiring the best personnel available for client businesses. Using the resources provided by the Small Business Administration, you can get training in business management and starting a business. Planning, launching and growing a recruitment business takes effort, but the lucrative rewards make it worthwhile.

Step 1

Conduct market research to determine if recruitment agencies in your area fulfill all needs. Identify an unfilled niche, such as customer support representatives. Use your experience and connections to identify a target market.

Step 2

Write a business plan by starting with a free template from a website or develop your own format tailored to your recruiting expertise.Include an executive summary that describes how you will fill a void not met by other temporary or permanent placement agencies. Describe how you plan to organize and structure your company, market your services and finance your start-up business. Define the type of personnel you have experience recruiting and can send to potential employers to fill vacancies in their organizations.

Step 3

Project in the financial statement of your business plan how much you intend to charge. For example, charge a 50 percent markup to clients. Therefore, if an employee gets paid $20 per hour, charge the client $30 per hour.

Step 4

Rent or buy office space so that you can conduct interviews and other administrative efforts, such as background checks for your clients. Initially, renting space until your business grows makes sense.

Step 5

Create a website to advertise your services and arrange for payment, such as by credit cards or PayPal. Describe your services including writing job descriptions, soliciting applications, conducting reference checks, evaluating skills, interviewing and screening potential employees. Describe the incentives you plan to offer recruits, such as dental, medical and disability insurance as well as a 401(K) plan for retirement savings.

Step 6

Recruit by publishing job descriptions in local newspapers, magazines and industry trade association publications.

Step 7

Establish a sample contract and pricing model. Download a free template from a website, such as Microsoft Office Templates. Document communication between your business and a client’s Human Resources department, such as personnel offers, acceptances and terminations.

Step 8

Hire personnel to help. Use a virtual assistant if no trained personnel are available in your area to handle business processes such as payroll processing, answering phone calls and data entry processing.

Step 9

Develop policies and procedures to support your recruitment business operations. Evaluate and purchase recruitment software tools to help you manage and retrieve profiles so that you can match them with job descriptions or work defined by your clients. Use the tools provided by the Society for Human Resource Management to conduct interviews or create your own interview tips, techniques and checklists.

Step 10

Use the resources provided by the Business.gov website to structure your business, adhere to federal, state and local regulations and pay your taxes.

References (4)

Resources (1)

Society for Human Resource Management: Templates and Tools

Photo Credits(2)

2 comments:

Marshall TerrellMay 4, 2013 at 7:30 AM
To start a recruitment business, in theory you don’t need much more than a computer, internet connection, and a phone. But while your online presence is important, don’t forget that to make your business work you need to maintain a human element. Employers and job seekers are people and they will interact best face to face. Their true needs cannot always be captured by technology so ensure you take the time to meet clients and actively network. Getting out there is a very important part of the job.
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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Tuesday, April 30, 2013