It goes without saying that you should never be tempted to use information that is proprietary to your previous employer. This information can be openly found with some basic LinkedIn research.
Are you a recruiter that is focussed on crunching numbers? Are you a recruiter who is focussed on cultivating long-term relationships? In this section, you can include a few quick bullet points to explain how you approach recruitment. This information gives your hiring manager an indication about whether you hold similar values and whether you have similar working styles.
This section is a new one in response to market conditions in 2023 but can demonstrate how you are prepared to deal with current and upcoming challenges.
You can use this section as the title and include bullet points to outline how you will adapt to these market conditions.
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Which recruiters and agencies offer the greatest competition? Demonstrating your knowledge in this area highlights that you are commercially aware outside of your core market.
Include about 5 different competitors who are directly competing in your patch. You can use the table below to display this information:
The company name | The name of the recruiter in your field | My comments |
Company name | Recruiter name | This recruiter has a well-established presence in this market, however they have less of a presence in UX/UI roles, which is a market I feel I can pick up |
In many business plans, financial projections are of utmost importance and can demonstrate your commercial acumen. If you’ve ever watched Dragon’s Den, you’ll know what happens when you don’t know your numbers!
Project your personal revenue for 4 quarters. You can start your calculations by predicting the average annual salary of a candidate in your patch. You can project your average percentage fee agreed with clients and from there you can calculate your average fee. Once you have this, you can predict the amount of placements you’ll be making per month.
Make sure your revenue projections are realistic and achievable. Avoid the temptation to predict vastly optimistic revenues, especially during a possible recession. You must allow time to ramp-up and there must be a logical relationship between your historical and predicted revenues.
The plan only includes project revenue. Your historical revenue should be on your CV.
Take the below as an example:
My predicted average percentage fee agreed with the client:, my predicted average fee:, my predicted average placements per month, my projected revenue over 12 months.
Year | 2023 | 2024 | ||
Quarter | Q2 | Q3 | Q4 | Q1 |
Personal revenue ($SGD) | $0 | 61,600 | 92,400 | 92,400 |
Number of placements | 0 | 2 | 3 | 3 |
Underneath, you can also include the KPIs you will set yourself to guide you in achieving these numbers. For example, you can set yourself a guideline for how many CVs you need to send, how many candidate meetings you need to arrange, how many client meetings you need to arrange and so on.
We’ve constructed a free template built around the components mentioned above, so you can create your own for when you reach out to hiring managers.
To download this template, please add your email below and you’ll be redirected to the template.
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This step-by-step guide should give your hiring manager a clear idea of your plan. If executed successfully, you’ve already demonstrated your commitment, knowledge and commercial acumen before even attending an interview.
The way you’ve structured your plan will give your hiring manager a very clear indication of your methodology and whether you’d fit their structure. Keep in mind that if your methodology is focused on high volume recruitment, it’s not going to work well with an executive recruitment agency.
As a next step, learn this plan inside and out. Be prepared to pitch your plan to your hiring manager and answer detailed questions surrounding each component.
Leave your interviewer with no room for concern and secure that role! Lastly, if you enjoyed the article, please consider subscribing or following us on LinkedIn to have new articles for recruiters like this delivered directly to your inbox.
As Founder of Charterhouse Partnership, I led the opening of 5 international offices, hiring & training hundreds of recruiters. Please subscribe to our weekly newsletter where I share my insights on the recruitment industry.
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Launching a recruitment agency demands a solid foundation, and crafting a detailed business plan is the cornerstone. Get started on your recruitment agency business plan with our guide. We will walk you through all the details.
The United States, Japan, and the United Kingdom dominated the recruitment and staffing industry in 2022, generating 55% of its revenue. Global revenue for the staffing industry jumped 4% to $648 billion, according to a report from Staffing Industry Analysts . The current job market, characterized by rapid technological advancements and shifting workforce demographics, is creating a market for flexible staffing solutions.
To cut costs and improve the efficiency of human resources, businesses are turning to staffing and recruitment agencies to secure talent. The rise of the gig economy and the preference for contract or temporary positions among workers seeking greater work-life balance is helping fuel the industry’s growth. Nearly 23% of working Americans also have a side hustle, according to a recent study by Pymnts .
Whether you are a seasoned professional in the staffing world or a newcomer to the field, you need to start with a recruitment agency business plan. Creating a business plan requires gathering a significant amount of information. Start by researching the staffing industry, including market size, growth trends, and regulatory considerations. Network with industry professionals, attend relevant conferences, and utilize online resources to gain knowledge. Financial projections should be based on realistic market assumptions and comparable business models.
Keep in mind you will need a business plan at various stages of your business journey. Initially, it will guide your startup phase, helping you to secure funding and establish your business structure. As your agency grows, revisiting your plan can help you to scale your operations and enter new markets.
A comprehensive startup business plan for a recruitment agency should include:
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AtWork provides comprehensive knowledge, training, and tools essential for launching your staffing business. As a franchise owner, you get in-depth training on running a successful staffing agency, including sales, operations, and compliance. AtWork has state-of-the-art technology and operational tools to simplify day-to-day management, and marketing campaigns to effectively promote your agency and attract clients and candidates. Its support staff also handles all your payroll, allowing you to concentrate on scaling the business.
Get started to learn more about partnering with AtWork to launch a business in the staffing industry.
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Table of Contents
Provide direction, minimise risk , reduce spending, market research , budgeting and financial planning, examples of swot analysis for a recruitment agency, opportunities , how countingup can benefit your recruitment agency.
If you’re looking to start a recruitment agency, you’ll need to create a business plan as any other startup would. Remember, though, that you’ll need to also account for the specific situations that might arise while working in the recruitment industry.
This article will serve as a guide to writing a great business plan for your recruitment agency. We’ll look at what your plan should look like, as well as why a plan is important. The topics we’ll cover include:
There are a few different reasons why you need a business plan before starting a business , but one of the most important is that it will guide your business going forward. Without a plan, no matter how simple the plan is, you’ll likely struggle to develop your business and make effective decisions.
A business plan doesn’t have to be set in stone — you can adapt it to account for any unique events that affect your recruitment agency. That said, it’s essential to have at least a vague idea of the purpose your business will serve, the potential obstacles you might encounter, and how you’re going to deal with those obstacles.
A business plan is also necessary to minimise the risk you’ll face when starting a recruitment agency . One of the key sections of a business plan is the SWOT analysis, where SWOT stands for strengths, weaknesses, opportunities and threats.
In order to minimise risk effectively, it’s vital that you analyse both the weaknesses of your agency as well as the threats it may face. In doing so, you’ll be able to fix your weak points and avoid potential threats more effectively.
Finally, business plans are important because they provide valuable data for minimising your spending. For example, during your SWOT analysis and financial planning , you may find that you’ve budgeted a large amount of spending to support a part of your business that’s actually very strong.
In a recruitment agency, this might mean you’ve planned to spend a lot of money on marketing, but your business already has a strong brand because you (as the owner) have many good personal contacts in the industry. In this instance, you can safely reduce your marketing budget and save your business money.
Thorough market research is the best first step when you’re writing a business plan . Market research means examining the industry your business will exist in, and finding out the needs and preferences of that industry’s consumers.
For a recruitment agency, a key research topic for your business plan would be finding out the impact COVID-19 has had on the market. Many new markets emerged during the pandemic, which you can provide your services to. As the UK is currently recovering from the pandemic, it would also be wise to look into which industries are now recruiting heavily after laying off staff in recent years.
Planning out how you’ll spend your money when starting your agency is also a key part of a good business plan. You need to consider your budget for starting the business as well as how you’ll manage your business finances going forward.
It’s smart to prepare a budget for each section of your business. For instance, you might set aside different amounts for recruiting staff, purchasing business premises, and marketing. Your advertising budget is particularly important when you’re a small business , as you may not be able to rely on personal contacts or existing clients for referrals, so you’ll need to attract clients independently.
Conducting a SWOT analysis is a great way of evaluating your business even after starting up, but it’s particularly helpful when you first put together your business plan. SWOT stands for strengths, weaknesses, opportunities and threats, so a SWOT analysis requires you to think of an example of these for your business. In a recruitment agency, these might be:
As mentioned above, it may be that you have a good reputation because you have a wealth of experience and personal connections in the recruitment industry, so you’ll not need to worry as much about marketing.
Recruitment agencies frequently have to use a lot of software to track their clients’ needs and organise candidate applications. If you’re not very good with technology, you may need to hire staff who are to account for this weakness.
The UK is currently rebounding from the struggles of the COVID-19 pandemic, and this presents a wealth of opportunities for a good recruitment agency.
You need to take immense care when you’re handling people’s personal information, which you’ll often do at a recruitment agency. Sending this information to the incorrect person can have a considerable negative impact on your business, as there is a lot of new legislation regarding privacy.
Your business plan should include a good amount of financial planning, as tracking your cash flow (your incoming and outgoing cash) is hugely important in any business.
Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one app. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are.
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Starting your own recruitment agency can be an exciting yet daunting endeavor. With the right strategies and tools, you can build a successful business from the ground up. This comprehensive guide walks you through every step, from crafting your business plan to landing your first clients. You'll learn proven techniques to identify promising job opportunities, match qualified candidates, and deliver excellent service that keeps clients coming back. As you embark on your recruitment journey, this guide equips you with the fundamental knowledge and practical insights needed to thrive in this competitive industry. Follow the detailed game plan to launch and grow your agency.
Business planning.
To start a recruitment agency, you need a solid business plan. Outline your mission, vision, target market, and operational details. Determine your business structure, and register the appropriate licenses or permits.
Decide whether you want to focus on a niche market or offer generalist services. Niche agencies targeting specific industries, job types, or candidate pools often find success quickly. However, generalist agencies also prosper. Choose an area you have experience in.
Recruitment software is essential to run an agency. At minimum, you need an applicant tracking system (ATS) to manage the candidate application process. An ATS allows you to post jobs, collect applications, screen resumes, and track the status of candidates. It streamlines communication with applicants and helps you stay organized so you can focus on finding the right hires for your clients. Starting with a robust ATS will give you a strong tech foundation to build your agency upon.
Having sufficient finances is crucial to bridge the gap between starting your recruitment agency and receiving your first invoice payment after making your first placement. Most recruitment agencies require some seed capital to cover initial expenses like technology, licenses and office costs before placements are made and revenue starts coming in. Starting your own recruitment agency is often easier if you already work in the industry as a recruiter since you can leverage your existing professional network to make placements and bill clients faster.
Market your services to local businesses to find new clients. Attend industry events, network, cold call, send direct mail, and use social media to promote your agency. Build a candidate database by posting jobs, using proactive sourcing techniques like social media messaging, and purchasing candidate profiles.
With thorough planning and preparation, you can establish a successful recruitment agency. Focus on developing expertise, hiring the right team, leveraging technology, securing funding, and building a client and candidate base to get started.
Identifying your target market.
The first step to winning clients is identifying who you want to work with. Do you want to focus on a particular industry or job function? Develop a clear target market so you can tailor your outreach. Build a list of companies in your area that meet your criteria. Map out key decision makers and roles within those companies who would be interested buyers of your services. Enrich the list with contact details, including names, titles, phone numbers and email addresses.
You need to develop a value proposition that convinces clients to work with you. Focus on how you can save them time and money, improve their hiring, or provide hard-to-find talent. Create case studies and testimonials to help sell your services.
Reach out to your target companies through calls, emails, and in-person meetings. Explain your services, emphasizing the benefits to them. Ask questions to understand their needs and challenges. Look for opportunities to provide value, such as sharing a candidate shortlist. The goal is to build relationships and become their trusted advisor.
Once you land a client, focus on delivering results. Work closely with them to fully understand the role and requirements. Tap into your network and use recruitment tools to find highly qualified candidates. Conduct rigorous screening and only submit candidates that are excellent fits. Provide regular updates to your clients and address any concerns quickly. Exceed their expectations to earn repeat business and referrals.
With a clear strategy, targeted outreach, and a track record of success, you can build a thriving recruitment business. Stay up to date with trends in your industry and niche to keep providing the best service to your clients. Continuous learning and improvement will ensure your long term success.
Build a talent pool.
To fill positions quickly, develop a database of pre-screened candidates. Source candidates through networking, employee referrals, social media, job boards, and your website. As you meet candidates, evaluate their skills and experience to determine if they fit your client’s typical profiles. If they’re a good match, add them to your talent pool. When a new role opens, you’ll have a list of potentials ready to review.
For each new job, craft a compelling job posting highlighting key requirements and responsibilities. Distribute the posting on general job sites as well as those focused on the position’s industry and location. To attract passive candidates, emphasize career growth opportunities, work-life balance, and other benefits. Include action words describing the impact of the role.
Many job seekers use social media to research companies and opportunities. Develop profiles on LinkedIn, Facebook, Twitter, and industry sites. Post updates about new openings, company news, employees of the month, etc. Engage your followers by liking and commenting on their posts. Invite candidates in your talent pool to connect and follow you. A social media presence boosts your visibility and credibility.
Don’t forget the power of in-person networking to source candidates. Attend industry events, join relevant trade groups, and connect with peers at other agencies. Explain your focus areas and needs. Provide your contact information and company details to anyone interested in new opportunities. Ask happy clients and candidates to spread the word about your services. Networking leads to candidate referrals, new clients, and partnerships.
With a mix of proactive sourcing strategies, you’ll have a steady flow of qualified candidates to fill client roles. Pair a talent pool with targeted postings and social media, then accelerate your search through networking. The right candidates are out there—you just have to find them!
Defining the role.
The first step is to meet with the client to develop a comprehensive job description that outlines the key responsibilities and requirements of the role. You will need to determine the necessary qualifications, skills, experience, education, and salary range to attract qualified candidates. Be sure to get a detailed sense of the company culture to find candidates that will be a good fit.
With the job description in hand, you can begin sourcing potential candidates through various channels like online job boards, social media, employee referrals, and recruiting websites. You may also tap into your network and database of pre-screened candidates. Use the job description to search profiles and resumes for relevant experience, skills, and interests that match the position. Reach out to candidates that seem to be a strong match to gauge their interest.
Review applications and resumes to evaluate candidates’ qualifications and experience. Conduct initial phone screens to establish that candidates meet the basic requirements before proceeding to more advanced screening steps. Check candidates’ references and credentials to verify the information they have provided.
Schedule in-person interviews with the most promising candidates. Use a structured interview process to objectively compare candidates. Ask questions that probe their relevant experience, technical skills, work style, career goals, and enthusiasm for the work. Have candidates also meet with various team members to assess fit from multiple perspectives. Evaluate candidates objectively against the criteria established in the job listing.
Once you have selected the top candidate, make a formal job offer contingent upon successful reference and background checks. Work with the client on negotiating a compensation package the candidate will find acceptable. Provide feedback to unsuccessful candidates and keep the details of your search and selection process confidential. With an offer accepted, you can begin onboarding your new recruit!
Focus on niche markets.
To scale your recruitment agency, focus on niche job markets and industries. Develop expertise in two or three niche areas to build a reputation and gain referrals. For example, concentrate on technology, healthcare or finance roles. Pitch your specialized knowledge to win new clients in those sectors.
With a niche focus established, invest in marketing to promote your expertise. Build a professional website highlighting your key services and experience. Start a blog discussing trends in your target sectors. Sponsor relevant industry events. Place ads on job sites frequented by your target candidates. All of these actions will raise brand awareness and drive new business.
Once you have achieved success in your local market, consider opening additional offices in other locations. This allows you to leverage your knowledge and processes to fuel growth. However, proceed cautiously. Conduct extensive research on the new location before expanding to ensure sufficient client and candidate opportunities exist to generate a strong return on your investment.
To handle increased volume, optimize productivity. Automate tasks like job posting, candidate vetting and client reporting using software solutions designed for recruitment agencies. Also, hire additional recruiters and provide ongoing training to ensure consistent high-quality service.
Partnering with complementary businesses can be an effective way to scale. For example, team with staffing agencies to fill contract roles or HR consulting firms to provide permanent placement services for their clients. Referrals from partners who already have an established relationship with the client can accelerate the sales cycle and fuel growth.
In summary, by focusing on niche markets, investing in marketing, expanding geographically, improving productivity and pursuing strategic partnerships, you can build on your initial success and scale your recruitment agency over the long run. With hard work and persistence, you can turn a small startup into a thriving national or even global firm.
How do i find clients for my recruitment agency.
To find new clients, focus your efforts on networking and building relationships. Attend industry events, join relevant associations, and connect with people currently in roles you aim to fill. Explain your services and how you can meet their hiring needs. You should also reach out to companies directly through calls and emails to pitch your services. Develop a professional website and online profiles to establish your authority in the recruitment field.
Several tools can help streamline your recruitment operations. An applicant tracking system (ATS) like SmartRecruiters or Greenhouse helps manage candidates and jobs. A customer relationship management (CRM) platform such as HubSpot organizes your client and candidate data. Consider project management software such as Asana or Trello to coordinate tasks. You'll also want a robust invoicing and payroll system.
Most recruitment agencies charge a percentage of the candidate's first-year salary as a placement fee, typically ranging from 15 to 30 percent. The exact fee depends on factors like the role, industry, location, and your experience. You'll want to research the standard fees in your area and for the positions you aim to fill. It's best to charge on the higher end of the range, as you can always negotiate down for the right client or candidate. You should also charge smaller upfront retainer fees to cover the initial recruitment process.
Operating a recruitment agency comes with several legal obligations. You must follow all labor laws regarding hiring and employment. Establish thorough processes for screening candidates and maintaining records. Consider professional liability insurance to protect against negligence claims. You'll also need the proper business licenses and permits to legally operate your agency. Stay up-to-date with laws around employee classification, discrimination, data protection, and other issues that apply to your work.
You now have the knowledge and tools to start your own recruitment agency. With dedication and persistence, you can make your dream of running a successful recruitment business a reality. Begin implementing the strategies outlined here - start networking, build your online presence, invest in recruitment software, and develop your unique value proposition. It will take time and effort to get your first clients and fill your first jobs, but stay focused on providing an excellent candidate experience. If you remain resilient through the ups and downs, provide exceptional service, and continually refine your business model, you will be well on your way to establishing a thriving recruitment agency. You have what it takes - now put in the work.
Electrical engineer vs electrician: what are the key differences, want to grow your recruitment business faster, looking for a career change, want to grow your recruitment business, need to scale your recruitment.
Recruitment agencies and talent acquisition businesses know that success in the competitive industry hinges on strategic planning. That's where ClickUp's Business Plan Template for Recruitment comes in!
This comprehensive template allows you to outline your recruitment strategies, set objectives, define your target market, project your finances, and establish operational processes. With ClickUp's Business Plan Template for Recruitment, you'll have a roadmap to guide your growth and ensure your business thrives in the ever-changing recruitment landscape.
Don't leave your success to chance. Get started with ClickUp's Business Plan Template for Recruitment today and take your talent acquisition business to new heights!
A business plan template for recruitment offers numerous benefits to recruitment agencies and businesses in the talent acquisition field, including:
Create a winning business plan for your recruitment agency with ClickUp's Business Plan Template for Recruitment. This comprehensive template includes:
With ClickUp's Business Plan Template for Recruitment, you can streamline your planning process and set your recruitment agency up for success.
If you're looking to create a business plan for recruitment, ClickUp has a template that can help you get started. Here are four steps to effectively use the Business Plan Template for Recruitment:
Before you start creating your business plan, clearly define your objectives and goals for your recruitment agency. Are you looking to specialize in a particular industry? Do you want to focus on temporary or permanent placements? Understanding your business objectives will help shape the rest of your plan.
Use Goals in ClickUp to define and track your business objectives for recruitment.
Next, identify your target market and the types of clients and candidates you want to attract. Consider factors such as industries, job levels, geographic locations, and any specialized niches you want to focus on. Understanding your target market will help you tailor your recruitment strategies and services accordingly.
Use the Board view in ClickUp to create columns for different target markets and track your progress in attracting clients and candidates.
Once you have identified your target market, it's time to develop your marketing and recruitment strategies. Consider the channels and platforms you will use to promote your agency, such as social media, job boards, and networking events. Determine how you will attract candidates and clients, and outline your approach to sourcing, screening, and placing candidates.
Use Automations in ClickUp to streamline your recruitment processes and save time on repetitive tasks such as sending follow-up emails or scheduling interviews.
Lastly, create a financial plan for your recruitment agency. This should include your projected revenue, expenses, and profitability. Consider factors such as fees, commissions, and any additional services you plan to offer. It's also important to set financial goals and milestones to track your progress and evaluate the success of your business.
Use the Gantt chart in ClickUp to create a timeline for your financial goals and milestones, and track your revenue and expenses over time.
By following these steps and using the Business Plan Template for Recruitment in ClickUp, you can create a comprehensive and effective business plan for your recruitment agency. Good luck with your venture!
Recruitment agencies and businesses can use the ClickUp Business Plan Template for Recruitment to create a comprehensive roadmap for their growth and success in the competitive recruitment industry.
First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.
Next, invite relevant members or guests to your Workspace to start collaborating.
Now you can take advantage of the full potential of this template to create your recruitment business plan:
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A well-structured business plan is the cornerstone of success for recruitment agencies. It serves as a blueprint outlining your agency’s vision, mission, goals, strategy, and financial projections.
Here is why it is crucial for the success of a recruitment agency.
Utilize the Business Plan Workbook to:
By integrating this workbook into your planning process, you gain a valuable tool that enhances your business plan’s quality, making it a robust document that guides your agency towards achieving its goals.
Writing a business plan from scratch for your recruitment agency can be challenging. We’ve compiled a comprehensive step-by-step guide to explain the process.
Here are the seven stages involved in putting together this critical document:
Creating a solid vision and mission statement for your start-up recruitment agency business plan is crucial to guiding your business in the right direction.
To do this, follow the below steps:
…. costs to start your recruitment desk are minimal compared to starting from scratch
Set measurable goals to work towards, such as:
If you’re putting together a start-up recruitment agency business plan, it’s important to review and revise your goals regularly based on your progress and market conditions.
Establish the underlying reason for starting your recruitment agency in the first place. Do you want to help people find meaningful work, support growing businesses, focus on a niche industry, or something else? Whatever the reason, your purpose should align with your values.
For example:
The values that guide your agency will shape your culture and brand.
Examples include the following:
Your vision, purpose, goals, and values provide the foundation for your recruitment agency business plan. Refer to them often when making critical decisions to stay on track.
Next, consider which business model suits your needs: focusing on permanent placements, contract staffing, or both.
The services you offer should align with your expertise and target market. For instance, if you have a background in IT, specialising in tech recruitment might be ideal. However, starting with generalist roles could be more suitable if you’re new to the industry.
Developing a comprehensive recruitment agency business plan in the UK (or any other country) can be complex and often impractical for new agency owners. A more efficient alternative is to start your own recruitment desk under Additional Resources’ Recruiter Startup model.
We provide the necessary infrastructure, tools, training, and support to help you launch your agency quickly, enabling you to start matching candidates with jobs and generating revenue immediately.
Performing market research for your recruitment agency is essential for understanding your target market, competitors, and industry trends.
This involves the following activities:
Investigate what competitors offer and how they operate — research their fees, services, and client attraction strategies. The UK recruitment industry is highly competitive, comprising over 27,700 agencies . Hence, understanding your competition will help you differentiate your agency.
Determine hiring needs and budgets by surveying local businesses. As of 2022, the UK had approximately 5.5 million private sector businesses, providing ample opportunities to explore various industries and niches.
After gathering data, analyse it to identify opportunities and establish a competitive advantage. Look for unmet needs or new trends to capitalise on.
Stay updated on trends like remote work, which increased significantly during the COVID-19 pandemic, with 17.4% of the UK workforce working from home in 2020. Also, monitor the demand for contract staff, as the gig economy has grown in recent years. Adapting to the ever-changing recruitment landscape is vital for long-term success.
Starting a business from scratch can be hectic. As an alternative, consider joining a recruitment franchise like Recruiter Startup. We have an established brand and in-depth industry knowledge, helping you begin your journey with a solid foundation.
Check out our associates recruitment model to learn more about how we operate and how much you can earn working from home.
A solid marketing and sales strategy is crucial for building a successful business, recruitment agencies inclusive.
These five tips can help outline a compelling start-up recruitment agency business plan, which is vital if you’re looking to convince investors to fund your enterprise:
To identify your ideal job-seekers, focus on an initial niche, such as IT professionals, nurses, or teachers. You may go on to specify locations, experience levels, and skills.
For example, you may focus on recruiting in the healthcare niche, a highly viable market — the UK has a high demand for healthcare professionals, with the NHS employing o ver 1.4 million people . Targeting your market makes reaching them more manageable.
About 61% of job-seekers in the UK used online job boards to find employment in January 2022 alone.
Take advantage of this viable marketplace by developing a professional website to showcase your agency’s credibility. Optimise for search engines using essential keywords, like “recruitment agency” and your location, e.g., “London.” Create LinkedIn, Facebook, and Twitter profiles for networking with candidates and clients.
Our post on how to start a recruitment agency expounds more on the need to achieve a robust digital profile.
An excellent recruitment business plan example outlines how it plans to generate leads.
Post jobs on your website, social media, and platforms frequented by your target candidates. You may also utilise your network to gather referrals but thoroughly screen candidates to ensure the best matches for your clients.
Strive to build lasting relationships with clients and candidates — regularly check in to ensure satisfaction and address any issues promptly. Go above and beyond expectations, such as assisting a new hire’s onboarding process. Up to 83% of satisfied clients and candidates will likely refer others and return to your agency, boosting profit margins by 25%.
By following these steps, you’ll be well on your way to developing a successful marketing and sales strategy for your UK recruitment agency. While crafting a comprehensive recruitment agency business plan can be challenging, focusing on the essentials lays a solid foundation for your agency’s growth.
Assembling a team of qualified professionals and establishing the necessary infrastructure is crucial when building a recruitment agency, so you must consider it in your recruitment agency business plan . However, this can be challenging and costly, as outlined in our post on recruitment agency startup costs .
Adhering to the following checklist can make your task easier:
Your agency needs administrative staff to manage daily operations, such as answering phones, organising schedules, and updating records. An administrative assistant’s average salary in the UK is £20,664 annually . Any candidate you’re hiring should have strong organisational and communication skills.
Recruiters are the backbone of your agency. Aim to hire experienced recruiters with proven success in your target industry or job function.
In the UK, the average salary for a recruiter is £31,489 per year , with bonuses and commission potentially increasing earnings. Recruiters must excel in networking, interpersonal, and sales skills to effectively find candidates and maintain client relationships.
If not operating virtually, secure office space for your team. Consider a location easily accessible for candidates and clients, with room for private offices or cubicles, a reception area, conference rooms, and storage. In the UK, office rental costs vary by location, with London prices ranging from £50 to £150 per square foot per year.
Invest in a robust technology infrastructure, including the following:
Setting up a recruitment agency’s team and infrastructure is a significant undertaking, requiring substantial resources. For those considering an easier route, a franchise model like Recruiter Startup provides the essential components and support under Additional Resources , allowing you to focus on growing your business. Check out what others are saying about us .
To create a comprehensive recruitment agency business plan, it’s essential to determine funding sources and estimate projected returns on investment.
Note: With Recruiter Startup, your upfront fee is only £750 + VAT per month, a far lower expense than starting your own recruitment agency.
Consider the following factors in doing so:
Note: When you set up as a franchise recruiter under the Recruiter Startup model, your expenses will be slashed as you won’t need to spend on office space or staff.
To secure funding, present a well-developed business plan with solid financials and explain how the investment will drive growth and profits.
Considering potential risks and creating strategies to address them is crucial for the success of your recruitment agency.
Here are some key areas to focus on:
When designing your recruitment agency business plan, anticipate challenges and develop solutions.
Common risks include the following:
Compliance with legal regulations is vital for your agency’s reputation and success.
To achieve this, ensure you do the following:
Failing to comply with legal obligations can result in fines, reputational damage, or even forced closure. Hence, prioritise compliance from the outset.
Starting a recruitment agency from scratch can be time-consuming and expensive, especially when considering investing in a robust recruitment agency business plan. However, a franchise recruitment model can save time and money, allowing your business to become operational more quickly and efficiently.
The key benefits of choosing a franchise recruitment model include the following:
Choosing a franchise recruitment model allows aspiring agency owners to start placing candidates and generating revenue much sooner. This approach saves time compared to spending months designing a recruitment agency business plan. The franchise model is an attractive option for those looking to enter the recruitment industry hassle-free. Contact us now to get started!
Yes, starting a recruitment agency can be a good idea if you possess strong industry knowledge, networks, and the ability to match job seekers with suitable employers. The recruitment industry can be lucrative and rewarding. However, it’s essential to be aware of the challenges, such as competition, changing market conditions, and the need for adaptation to new technology.
Yes, starting a recruitment agency can be a good idea if you possess strong industry knowledge, networks, and the ability to match job seekers with suitable employers. The recruitment industry can be lucrative and rewarding. However, it’s essential to be aware of the challenges, such as competition, changing market conditions, and the need for adaptation to new technology.
Some of the best industries to start a recruitment agency are:
Yes, the recruitment industry can be challenging due to several factors, including the following:
Based on data from several sources, the UK recruitment industry is experiencing growth but at a slower pace . However, over 50% of recruitment agency experts forecast a 1%–25% Based on data from several sources, the UK recruitment industry is experiencing growth but at a slower pace . However, over 50% of recruitment agency experts forecast a 1%–25%
So, there you have it — a complete guide to a recruitment agency business plan . As you can see, it’s no easy feat and requires a significant time and financial investment to get off the ground. The business plan alone can take months of work. For those determined to forge ahead alone be sure to utilise our Recruitment Agency Business Plan workbook alongside this guide to help walk you step by step, and organise your thoughts and ensure no critical element is overlooked.
Why go through all that hassle when there’s a more straightforward solution?
Franchise models like Recruiter Startup offer an affordable turnkey solution to get your recruitment agency up and running in no time. We provide the systems, training, and support so you can focus on what matters — finding great candidates and clients.
Start building your dream recruitment agency today with a working business model. The opportunities are right here waiting for you, so take that first step now . You’ll be glad you did!
Let's talk about starting your recruitment desk.
Additional Resources
01277 822668
Park Wood Technical Centre, Park Wood Doddinghurst Road Brentwood, Essex, CM15 0SN
Download the pdf.
Striking out and setting up your own recruitment agency is an exciting prospect, and there’s never been a better time to do it. With over 31,000 agencies in the UK, the recruitment industry is booming. Despite the profound impact of COVID-19 on the labour market, recruitment is projected to bounce back massively in 2024, so now is the perfect time to seize the opportunity and open your own agency.
Pre-pandemic, the recruitment industry generated over £42.3 billion in the UK alone, and recruitment agencies and firms are predicted to grow substantially in the next 3-5 years.
It’s clear that there is huge revenue potential in the recruitment industry. However, to stand out from the crowd, you’ll need a great recruitment agency business plan. This will give you the strategy and understanding of the industry you need to succeed.
So, where should you start? Our guide will take you through each individual step in making your own business plan. We’ll take you through marketing strategy, pricing structure and management, all of which are crucial to the success of your recruitment agency. As a new business owner, there will be a lot to take in, but with our recruitment agency business plan, you’ll have the ultimate guide to take you forward.
As we’ve already mentioned, there is great potential in the UK for recruiters, and the turnover could be really significant. However, with the popularity of the industry comes a lot of high level competition.
Before you do anything else, you should be clear on who your competitors are, who your clients will be and how you will reach them, as well as fees you might have to pay whilst setting up.
You should start with a business plan. You can use it to gather and collate all of your resources, ideas and research.
The average start-up costs to set up a recruitment agency in the UK vary considerably. More expensive start-ups will cover the costs of leasing premises, employing staff, buying equipment and any insurance you might need.
However, there are ways to set up a recruitment agency without having to pay out thousands at first. By starting out as the sole employee, and even working from home, you can reduce costs to a bare minimum. All you really need is your home PC, mobile phone, some basic web tools and an internet connection.
With this in mind, a recruitment agency business plan is the best way to prepare yourself and plan for any financial obligations from the very start. We can also help you to figure out how to raise the capital you need for your business, based on your current financial situation.
We’ll take you through every step you’ll need to take to start your recruitment agency. It’s important to remember that if you plan to secure funds from a bank, it’s essential your business plan is as rigorous as it can be.
Along with that, we’ll offer you a further 25 (at least) ways to market your recruitment agency for free. All of this is at your fingertips.
Download now for only £49
In this guide, we’re going to take you through an outline for a recruitment agency business plan, detailing what you should include within each section, and things you should consider when pitching your business to investors.
However, please remember this is only a guide. When writing your business plan for your own recruitment agency, make sure to take your time and work through everything in scrupulous detail.
When it comes to a business plan, the more thorough the better. You can never over-plan when it comes to a business start-up.
Imagine you are pitching your business to an investor, what would you say? Remember that banks and investors will have seen thousands of previous pitches, so you really need to stand out to grab their attention. Putting serious thought and effort into your executive summary will be well worth it.
Remember, this is your opportunity to convince investors of your business’ credentials. Keep it positive, clear and easy to understand. Don’t get drawn into detailed descriptions or explanations, and avoid technical terms and jargon. Go out and grab their attention.
The company overview is your chance to properly introduce yourself and your business. You can give your potential investors a more detailed insight into how you plan to make sure your recruitment agency is a success.
Always remember, your focus should be on why investors should choose to put money into your recruitment agency, and why they should believe they’ll make a return on their investment.
You need to show that you have a good understanding of the recruitment industry. Let them know the extent of your knowledge of the current market, how you expect it to change, and how your company is suited to thrive in the future.
You should think like a business person and don’t give your investors any reason to doubt your command of the subject.
Basically, the goal of your company overview is to deliver a complete outline of your recruitment agency to your potential investors. Make sure to include facts and figures, and show off all your skills and expertise.
Feel overwhelmed? Not sure where to start? We’ve done all of the hard work for you.
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A business is only as good as the people behind it. To really make your recruitment agency a success, you’ll need the support of a great team. In the management and key personal section of your plan you should detail your management, staff, and plans for further growth.
This section really doesn’t need to be too long or complicated. All investors want to know is that you have a solid management structure and that you’ve made some plans for expansion in the future where necessary. As long as you’ve shown this, you’ll be just fine.
It’s crucial to have a strong understanding of your market before launching your start-up. It will help you recognise opportunities for your company to benefit from, and identify threats before they can damage your business.
Make sure you know the competition. What will make you stand out from them?
In this section you’ll also need to look into your target market, and how you’ll attract them over the competition. You should try to make this as detailed as possible, so that investors can see the focus of your agency. Being too vague might lead potential backers to believe you haven’t put much thought into it.
Are you going to focus on recruiting in one particular industry? Or perhaps you’re going to specialise in junior or graduate roles? You need to know who your clients will be so you can tailor your marketing and branding to suit them.
In order to attract business you’ll have to stand out from other recruitment agencies that operate in the same region. How do you plan to separate yourself from your competition? Investors might be concerned about market saturation, and you need to prove to them that your agency has more to offer than any other around you.
Put yourself in the shoes of your ideal customer. What is going to make them choose you over another agency?
Your business is going to need to have objectives, both for the short term and the long term. These objectives should be an outline to potential investors of what you are expecting to achieve over a time-frame.
Think about where you want your company to be after a month, then six months, a year and even five years. Don’t go crazy though. Ambition is good, but you shouldn’t be suggesting your business is going to become a giant of the industry after the first couple of years, as you will just come across as naive.
You should try to use the S.M.A.R.T criteria to keep track of your objectives.
If you still need some help coming up with objectives, you can consider some of the following:
Along with each objective you should provide a plan, as to how you expect them to be achieved.
By giving a detailed list of all the equipment you need to start your recruitment agency, investors will be able to see what their money is paying for.
This will depend very much on the scale of your planned agency. It would be possible to start by working from home with just your home PC and personal mobile phone. But if you’re thinking bigger, some items and services you should think about would include:
Be realistic in this section. You don’t need twenty PCs if you’re only employing a handful of staff. There’s no point in overspending.
This is the section where we crunch the numbers. Financial forecasting is probably the most important part of your business plan, as you can prove to investors that they will get some return on their investment.
This might be the trickiest and most time consuming part of the whole plan, but it is essential to do it properly.
You’re going to have to show your potential backers how you’ll recuperate the money they’ve invested. How much can you make per client? How many clients will you have?
If possible, don’t restrict yourself to just one avenue of revenue. Diversifying your income sources will make investors feel much more comfortable with their investment.
We’ve taken all of the hard work out of planning the finances for your recruitment agency. Download your recruitment agency business plan template instantly below.
Instant download
Do you already have existing financial support? Your investors will need to know how much start-up capital you have, and where it’s coming from. You need to let them know whether you’re using money from your own pocket, or whether you have investments from some other backer.
Be completely clear about where your money is coming from. Don’t hide anything from your investors.
You also need to be explicit about how much money you need, both now and in the future. You should also detail to investors how you’ll be spending it, whether it’s for equipment, renting premises or paying staff.
At the same time, don’t ask for more than you need, as it’s only likely to put investors off
If this is all still seeming a bit overwhelming, you might like to take a look at a small template we provide for a recruitment agency business plan. This can get you started and help you to come up with some of your own ideas.
Download .doc here
Launching your own business is a scary prospect. The recruitment industry is already a busy market, but there’s plenty of demand for it and forecasts anticipate its boom to continue. There are over 31,000 recruitment agencies in the UK, with a combined value of over £42.3 billion.
By creating a detailed and clear business plan, you’re giving yourself the best chance of success. You’ll be able to start out knowing you’ve considered every aspect of the business. Investors love an in-depth business plan, so remember: the more detail the better. With our experience, you can kick-start your agency with confidence.
Complete recruitment agency business planning package.
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A sample recruitment business plan revolves around basically three words that describe your business philosophy. 3 min read updated on February 01, 2023
Updated November 2, 2020:
Business Niche
Creating a business plan involves making some decisions upfront. This means choosing a niche. By doing so, you'll be deciding the type of recruitment agency to start and the industry to serve.
Observing Competitors
Observe how your competitors' work provides an excellent opportunity and how its recruitment process works.
Gathering Experience
Starting a recruitment agency requires the experience that a recruiter uses to find the perfect match for a company's needs. Examples of what you need to know include:
To acquire the type of experience necessary to operate a recruitment agency, it's recommended that you register with a reputable recruitment agency to experience, firsthand, some basic training in how an agency operates.
Building Skills
Keep in mind that part of a recruiter's job is testing the skills of potential candidates for jobs. So, your own skill level must be up to the task. It's equally important that you're able to recognize someone with potential even though they may not possess a lot of experience. You also need the insight to place the right person in the right position.
Evaluating Start-Up Costs
A recruitment agency isn't a cheap business venture to initially get started. You'll need a checklist of all things needed and the cost of each item. Things to include are staff payroll, marketing, insurance, and basic business expenses.
Researching Recruitment Laws
Study and become familiar with the recruitment laws in your state to ensure you aren't in violation. Each has guidelines that may include requirements for specific industries.
Obtain a Business License
Check with your local city and county office as well as the state to find out if or what type of business license is required to operate a recruitment agency. Obtain the license prior to opening for business.
Research Employment Laws
Laws guiding the rules of employment in each state are also in effect and something you must become familiar with. Examples include laws against discrimination and equal opportunity employment .
Business Location
Select a business location that's visible and easily accessible for clients and job applicants.
Register With Recruiters
Register with other companies as a recruiter. This is a way to bring in business should a company need to fill a position and contact you to fill the position.
Create a Marketing Plan
Create a marketing plan that outlines your business and its services. Make a list of businesses to contact and send a letter of introduction letting owners/managers of these businesses know about your company and what it has to offer. Also, follow up on each letter. Take advantage of the internet and newspapers by placing ads to highlight your business.
Create a Business Website
In today's fast-paced world, having a website is the standard operating procedure. A website is a gateway to advertising job vacancies. It's also a way for potential job seekers to provide resumes and conduct online interviews.
Hire Support Staff
A recruitment agency requires lots of paperwork, and you'll need to hire qualified staff to help with the tasks. This means bringing staff on board who have previous recruitment experience.
Contact insurance companies about purchasing liability insurance for your business.
Business Bank Account
Open a business account that's separate from your personal account for accepting payments for services from clients.
Equipment Necessary for a Recruiting Agency
The office space should include a reception area for greeting applicants and receiving applications. There should also be a conference room where you can conduct interviews. Necessary equipment includes:
On average, a recruitment consultant has the potential to earn between $65,000 and $75,000 annually. Charges for placing a candidate can range between 14 and 20 percent. Charges for your services may be based on a percentage of the candidate's first annual salary. The other option is charging a flat fee to the company you're recruiting for.
If you need help with a sample recruitment business plan, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
Hire the top business lawyers and save up to 60% on legal fees
Content Approved by UpCounsel
Written by Dave Lavinsky
Business Plan Outline
Start Your Staffing Agency Plan Here
You’ve come to the right place to create your staffing agency business plan.
We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their staffing agencies.
Below are links to each section of your staffing agency business plan template:
Next Section: Executive Summary >
What is a staffing agency business plan.
A staffing agency business plan is a plan to start and/or grow your staffing agency business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your staffing agency business plan using our Staffing Agency Business Plan Template here .
There are many types of staffing agency companies. Some staffing agencies will focus on a particular industry, such as clerical jobs. Other staffing agencies focus on executive job placement, while others will offer a wide range of services across all industries. Some even offer human resource functions, such as payroll, benefits administration and risk management.
The primary source of revenue for staffing agencies are the fees it charges clients to place them in a job and the revenue it receives from businesses that hire them to find and recruit suitable staff for their business.
The key expenses for a staffing agency business are the costs to market the business, as well as payroll for the support staff. Other expenses will be the rent, utilities, and overhead costs for the physical office space.
Staffing agency businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Angel investors and other types of capital-raising such as crowdfunding are other common funding sources. This is true for an employment agency business plan and specialities like a healthcare staffing agency business plan.
Starting a staffing agency business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Staffing Agency Business Plan - The first step in starting a business is to create a detailed staffing agency business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your staffing agency business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your staffing agency business is in compliance with local laws.
3. Register Your Staffing Agency Business - Once you have chosen a legal structure, the next step is to register your staffing agency business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your staffing agency business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Staffing Agency Equipment & Supplies - In order to start your staffing agency business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your staffing agency business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful staffing agency business:
You can download our staffing agency business plan PDF template here . This is a business plan template you can use in PDF format.
Staffing agency business plan.
If you want to start a staffing agency, recruiting agency, nurse staffing agency, or temp agency or expand your current one, you need a business plan.
Over the past 20+ years, we have helped over 8,000 entrepreneurs and business owners create business plans to start and grow their staffing agency businesses, employment agencies and recruitment agencies.
Below are links to each section of your staffing agency business plan template:
Next Section: Executive Summary >
What is the easiest way to complete my staffing agency business plan.
Growthink's Ultimate Staffing Agency Business Plan Template allows you to quickly and easily complete your Salon Business Plan.
You can download our staffing agency business plan PDF template here . This is a business plan template you can use in PDF format.
A staffing agency business plan provides a snapshot of your staffing agency as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
If you’re looking to start a staffing agency, or grow your existing staffing agency, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your staffing agency business in order to improve your chances of success. Your staffing agency business plan is a living document that should be updated annually as your company grows and changes.
This is true for an employment agency business plan, a recruitment agency business plan, a healthcare staffing agency business plan or a plan for any type of staffing agency.
With regards to funding, the main sources of funding for staffing agencies are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
Angel investors are also a common form of funding for staffing agencies. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a staffing agency. This is because most venture capitalists are looking for extremely fast growth and millions of dollars in return when they make an investment, and staffing agencies, while great businesses, don’t fit this criteria.
STAFFING AGENCY BUSINESS PLAN OUTLINE
How to write a recruitment business plan in 7 steps:, 1. describe the purpose of your recruitment business..
It also helps to include a vision statement so that readers can understand what type of company you want to build.
Our mission is to provide world-class and innovative recruitment solutions that help organizations find and hire the best talent to increase their competitive advantage. We strongly believe in the power of bringing together the right people and nurture a culture of employee satisfaction, growth and development.
You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.
Target market, customer base , product or service description, competitive analysis, marketing channels, form an llc in your state, 4. write your operational plan..
Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations.
5. management & organization of your recruitment business., 6. recruitment business startup expenses & captial needed..
Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.
Here are some steps you can follow to devise a financial plan for your recruitment business plan:
Why do you need a business plan for a recruitment business, who should you ask for help with your recruitment business plan, can you write a recruitment business plan yourself.
Yes, it is possible to write a recruitment business plan yourself. However, it may be more beneficial to consult a professional business plan writer to ensure the plan meets industry standards and contains all the necessary components. A professional also has experience in writing successful plans, which can greatly increase the chances of success.
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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.
Get this complete sample business plan as a free text document.
Start your own employment agency business plan
Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.
All About People (AAP) began out of the desire to contribute to this community, just as communities have fed All About People’s proprietor over the years. Although originally from a larger market, the proprietor realizes the need in the southern Willamette Valley for a personnel agency that fills a void left by other temporary and permanent placement agencies. AAP matches specifically skilled workers with clients, saving businesses time and money, while providing for its employees with honesty and honor. This requires a high level of communication. It means asking open-ended questions and listening, not talking. This means knowing the local market so AAP can really serve each client and employee, not just “sell” them our goods. AAP is quality service.
The long-term vision includes a number of offices throughout the southern Willamette Valley. The proprietor sees the challenge in this vision, not in the growth itself, but in training and encouraging all AAP personnel to treat each client and employee with the same care and with the same level of communication.
Managing our Growth AAP is a sole proprietorship that will convert to an S Corporation. As a new corporate entity, AAP will be treated as a start-up in this business plan. During the past couple of years the proprietor provided all services. In Year 1, the company will add a part-time office staff person and an employment specialist. In response to this growth, AAP will have a procedures manual for in-house staff to assure that the information is clear. In addition, AAP will provide employees with regular training within the divisions to assure they understand the details of the work they are doing daily. Year 2 projections include a receptionist, another employment specialist, and a field representative. In Year 3, AAP will examine the feasibility of opening a branch office in the Salem, Bend, or Medford/Ashland areas.
The Market AAP is structured like other temporary and permanent placement agencies. However, it will serve clients with needs for select, specialized professionals rather than clerical or light industrial workers. Several businesses in Portland, Oregon provide a similar service to specific groups of people, but there are none for the Willamette Valley. AAP has five divisions, targeting the following areas of expertise:
Event Planners
Graphic Artists
Services AAP will handle recruiting, including reference checks, skills evaluation, preliminary interviewing, and screening of all employees for its clients. AAP acts as an extension of the client’s human resource department, assuring that there is open communication between supervisor and employee, and assisting with any troubleshooting or problem solving that may be needed.
Financials The company’s start-up requirements are $55,464, of which $7,600 will be provided for by the owner’s personal investment. The rest will be obtained through loans.
We expect to be able to charge a 50% markup to our business clients. Thus, if an employee is being paid $10 per hour, we are charging the client $15 per hour. The company predicts that it will be able to produce sales of approximately $300,000 by Year 3. The company does not have any direct cost of sales; we track payments to placed individuals as regular payroll.
AAP is structured like other temporary and permanent placement agencies. However, we serve clients with needs for select specialized professionals, rather than clerical or light industrial workers. Several businesses in Portland, Oregon provide a similar service to specific groups of people. AAP followed the model of one placement firm described below.
A contract engineering firm places temporary workers who are hardware and software engineers. Employees earn between $80- $100 per hour and approximately seven employees are placed per month. The firm recruits through its website, advertises in newspapers, magazines, and trade publications. Incentives offered to contingent workers include medical, dental, and disability insurance, 401(K), and a reference finder’s fee for placement referrals. They find their employees are 60 percent male, 40 percent female, and ages spread evenly.
AAP serves the business client by locating a professional worker, interviewing and screening that worker, setting up interviews if necessary, and administering all hiring paperwork. The company runs payroll and bills the client bi-monthly. AAP will also manage the professional, staying in close contact with the client and communicating with the worker regarding any personnel issues that may arise.
The professional worker is served with employment opportunities at no cost; pay rates that are within industry standards; and health insurance may be purchased, if a worker becomes eligible, at a group rate starting at $124/mo. AAP will pay $65/mo for any coverage chosen from the group package.
All About People’s mission is to contribute to the community by filling a need for specialized, professional, contingent workers. The company will provide workers with a safe and independent environment. It will also provide businesses with a high-caliber of employee available for project or permanent work. All About People listens to individual needs and customizes personnel solutions for both businesses and workers.
AAP is a temporary and permanent placement personnel agency working solely with skilled, professional workers and Willamette Valley businesses. AAP differs from other temporary and permanent placement agencies because of our skilled workers. The company believes that the temporary industry pays only cursory attention to providing businesses highly qualified workers for permanent and non-permanent positions. AAP has five divisions, targeting the following areas of expertise:
AAP does not provide general clerical, light industrial, engineers, accountants, nurses, or other medical technicians.
AAP does the following for each client:
AAP conducts regular evaluations: AAP checks in with the supervisor and the worker during the first week on the assignment. AAP then checks in as agreed with the client. AAP acts as an extension of the client business’ human resource department assuring that there is open communication between supervisor and employee, and assisting with any troubleshooting or problem solving that may be needed.
Prior to opening our doors, research showed support for the development of a personnel agency working solely with professional contingent workers and Willamette Valley businesses (see topic 7.3 Supporting Research).
According to the Oregon Department of Employment, Lane County has 31 temporary agency firms with 3200 individuals employed. Total employment figures for Lane County are 250,000; therefore, we support between two and four percent of the population.
Through connections in a variety of areas, AAP is able to locate qualified workers not only through advertising, but through a channel of networking. This past year has shown that qualified, willing workers are certainly available as we currently have hundreds on staff willing and able to work.
AAP is a sole proprietorship that will convert to an S Corporation. As a new corporate entity, AAP will be treated as a start-up in this business plan.
The sole proprietor, Sarah Wayland, can be reached at AAP’s office, [contact information omitted in this sample plan].
Projected start-up figures are shown in the chart and table below.
Start-up | |
Requirements | |
Start-up Expenses | |
Legal | $100 |
Stationery etc. | $100 |
Brochures | $164 |
Insurance | $300 |
Rent | $800 |
computers, printers, software | $8,000 |
Total Start-up Expenses | $9,464 |
Start-up Assets | |
Cash Required | $46,000 |
Other Current Assets | $0 |
Long-term Assets | $0 |
Total Assets | $46,000 |
Total Requirements | $55,464 |
Start-up Funding | |
Start-up Expenses to Fund | $9,464 |
Start-up Assets to Fund | $46,000 |
Total Funding Required | $55,464 |
Assets | |
Non-cash Assets from Start-up | $0 |
Cash Requirements from Start-up | $46,000 |
Additional Cash Raised | $0 |
Cash Balance on Starting Date | $46,000 |
Total Assets | $46,000 |
Liabilities and Capital | |
Liabilities | |
Current Borrowing | $2,720 |
Long-term Liabilities | $45,000 |
Accounts Payable (Outstanding Bills) | $144 |
Other Current Liabilities (interest-free) | $0 |
Total Liabilities | $47,864 |
Capital | |
Planned Investment | |
Owner | $7,600 |
Other | $0 |
Additional Investment Requirement | $0 |
Total Planned Investment | $7,600 |
Loss at Start-up (Start-up Expenses) | ($9,464) |
Total Capital | ($1,864) |
Total Capital and Liabilities | $46,000 |
Total Funding | $55,464 |
The company is uniquely positioned to take advantage of this market opportunity because of the management and field expertise of the proprietor. Sarah Wayland worked in the temporary employment industry for three years with ADIA Personnel Services (now ADECCO) as Area Account Manager (in training as a branch manager): building business relationships; hiring employees; handling employee issues; working with clients during the implementation of ADIA; and opening an additional office in Beaverton, Oregon.
For one year the proprietor was a District Sales Manager at Columbia Distributing, showing a 10% increase on $3.5 million in annual sales. Managing a staff of nine in sales and customer service, she had the opportunity to delve further into hiring/firing, reviewing, incentives outside of salary, and personnel issues.
Most recently, she has spent several years as Funds and Contracts Manager at the Oregon University System; managing four grants totaling $1.5 million annually and all personal service and interagency contracts as well.
The proprietor’s most notable success was bringing the second branch of Cellular West located in Portland, Oregon, from running in the red, to breaking even within four months of its opening. She accomplished this by using motivational tools and providing the sales force with extensive training.
Changing labor market conditions threaten the concept of full-time permanent employment.
AAP provides a complex blend of services to distinct populations. The company serves businesses through connecting them with the professional contingent work force. It also serves the worker by connecting them with businesses, at no charge, and providing benefits not often provided by other employment agencies.
All About People (AAP) is a local firm that costs less than a consultant or agency, provides for both project and long-term needs, and has an easy, pay and billing rate system that covers employee payroll and worker’s compensation insurance.
There are a variety of reasons why businesses may need AAP’s services:
According to economic forecasters, employment agencies and financial services are expected to have the largest industry growth over the next 25 years. The trend toward businesses cutting back on employees and their benefits due to high costs creates the demand for AAP’s services.
Just consider the time, energy, and resources an employer may spend trying to employ a person for a 20-hour task.
In addition to the already lucrative temporary industry, several companies in the Portland Metro Area place professional contingent workers, but the southern Willamette Valley is not currently being served.
The company approaches businesses primarily through networking and cold calls. Our intention is to utilize a PR agency for more coverage as soon as possible. AAP is a member of the area Chamber of Commerce and actively participates in as many activities as possible, the proprietor is a member of the Women’s Business Network, the Professional Women’s Organization, and we are in the process of connecting with the Society for Human Resource Management. Prior to start-up, AAP also surveyed several area businesses about their use of contingent workers. The company will use its website and other marketing materials that describe what services we provide and explain how simple it is to work with us.
AAP advertises in local papers and trade magazines when absolutely necessary, but most often uses the Oregon Employment Department, both community college and university campuses, and the networking groups we are members of to search out the right employee. Prior to the sole proprietor start-up, the company started recruiting by administering twenty personnel surveys and advertising locally to create a staff of qualified contingent workers. This staff will be unaffected by AAP’s corporate restructuring.
The market can be broken down into two segments: the business market segment, and the employee market segment. Both of these segments are lucrative.
Business market targets: The company targets the University of Oregon, Lane Community College, the nonprofit organizations, the publishing industry, the advertising industry, and other large businesses.
Employee market targets: Editors/writers, graphic artists, computer specialists, event planners/fundraisers, and language translators/interpreters working in the business target markets listed above, as well as any applicants with unusual skills and talents.
These charts demonstrate the types of workers employed, the type of qualified professionals on file to work for the company, and the types of businesses who have used AAP’s services. These statistics cover the 15-month sole proprietorship period from July 1, 1998 through September 30, 1999.
Types of workers employed by or signed up with AAP
| ||
Computer | 34 | 24 |
Editor/Writer | 20 | 25 |
Event Planner | 13 | 10 |
Graphic Artist | 10 | 13 |
Language Interp/Trans | 13 | 17 |
Other | 10 | 11 |
Types of employers using AAP
High Tech | 14 |
Nonprofit | 39 |
Manufacturing | 18 |
Publisher | 11 |
Service | 18 |
Each and every contact is entered into the database-either in the professionals file if they are a potential candidate, or in the contacts file if they are another type of contact. The client and jobs files utilize the contact and client numbers to automatically fill in the information from the contact or client files. This means no duplicate typing. In addition, the contacts, clients, and professional files all have follow-up sheets attached making daily follow-up easy. Simply pull the file up for that day and all calls that need to be made that day will be marked.
Searching is easy. The check boxes within each professionals file allows us to check for singular or multiple skills and experience with a click and a return.
First form filled out from the moment the candidate calls. Three screens constitute one file: Personal Information; Job Information; Skills. The professional and contact files have a conversation record that will allow easy follow-up with a list daily of those records needing a call.
Interview Form
Directly from the employee forms the Employment Specialist can select the appropriate interview form. This form consists of three sheets: Basic Questions; Other Information/Recommendations; and Reference Checks.
Employee Profile Sheet
From the above information, a profile sheet is generated in hard copy for the inside of each file. This is our second backup system (besides the tape drive) in case of a power outage, etc.
This form is used for all other contacts. From here, a contact can be turned into a client by merely typing the contact number in on the client sheet, automatically bringing in all of the information.
The client sheet is easily created by filling in the contact number. All pertinent information is automatically entered. The client sheet has its own contact sheet attached generating a daily follow-up list. The client files can also be pulled into a handy contact list.
AAP is completely service minded, customizing personnel packages and offering the most it can to both employers and employees. The company brokers professional workers to Willamette Valley businesses. Because we serve two distinct groups of people, both businesses and employees will be considered equally important to AAP.
The company consists of five divisions, targeting the following types of workers and needs in businesses:
Computer Division
Editor/Writers
Language Interpreters and Translators
Within these categories, we originally set up a system of single sheets on card stock and filed them in binders. Since then, an electronic database has been created by one of our professionals. With the push of a button, AAP can search for a client or an employee needed.
Businesses and employees will be able to communicate with AAP via both new technological and traditional methods. Our Web page provides information about AAP including what professional fields we serve, what clients we are working with, and what services we offer. A second-generation Web page will provide information about employees for businesses through a password-protected area. AAP forwards candidates’ resumes and other information through a variety of methods: phone, fax, personal visit, mail, and the Web page.
In August 1999 we moved the offices to the center of town. Accounting is handled electronically by the proprietor through QuickBooks, with the complex needs handled by our CPA. All payroll is generated through the payroll service, Paychex. The office is furnished with all of the technology needed to operate on a daily basis, increase market share, and serve clients.
When a business is contacted and expresses interest in contingent employees that the company can provide, the following procedures will be followed:
When an employee seeks to work with the company, the following procedures will be followed:
Our sales forecast projections are presented in the chart and table below. Three years annual projections are shown in the table. The chart shows first year monthly forecast. First year monthly table is included in the appendix.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Placement Fees | $94,248 | $175,000 | $300,000 |
Other | $0 | $0 | $0 |
Total Sales | $94,248 | $175,000 | $300,000 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Placement Fees | $0 | $0 | $0 |
Other | $0 | $0 | $0 |
Subtotal Direct Cost of Sales | $0 | $0 | $0 |
The pay rate data will be determined by changing market factors including business demand.
Our experience shows that the following is true in regards to pay and bill rates. A “good deal” for most temporary agencies is a 50% of pay rate markup. Thus, if the pay is $10, the bill is $15. However, we have traditionally used a flat markup that seemed appropriate. Pay and bill rates generally are outlined as follows:
Editors Most editors require between $25 and $35 per hour, and our history has shown a $10 per hour markup is acceptable. One exception is in the technical arena, garnering between $45 and $55 per hour pay; again a $10 per hour markup is typical.
Writers The only writing we have done is creative for [client name omitted], and we paid $15 with a $10 markup.
Event Planners Event planners often will work for between $12.50 and $25 per hour, depending on the length of the job, requirements, and experience needed. We find a $5 per hour markup on the $12.50-$17.50 is reasonable, and a $10 per hour markup on anything over $17.50 per hour.
Fundraisers Fundraisers can start at $10 per hour (nonprofit) and go up to $20 per hour. This usually depends on client and length of assignment. Bill rate markup for nonprofits is $5 per hour, others between $7.50 and $10 per hour.
Graphic Artists Entry level beginning at $12.50 per hour, intermediate at $15 per hour, and a top of the line professional at $25 per hour. The exception may run about $50 per hour. Bill rates are between $7.50 per hour markup ($12.50-$15), and $10 markup.
Language Interpreters This is a tricky arena. Pricing depends on the language (typical/atypical) and the length of the assignment. Interpreters have been known to work for as little as $15 per hour and for as much as $35 per hour. A $10 per hour markup is acceptable.
Language Translators This division is difficult as each language and situation varies slightly. Translators tend to work by page or by word. Technical translation can be as much as $.30 per word. Other translation can be $10 per hour (an hour a page). We are unsure of markup at this time, but would suggest 50% of pay rate.
Computer Specialists:
When determining the bill rate, additional expense factors to remember above the pay rate are 15% employer taxes, advertising, and staff time to fill the position.
The company has an outstanding client list and an incredible number of qualified employees available. AAP has a good reputation for providing qualified people in a timely manner.
In a variety of settings the proprietor of AAP has strong management experience. The proprietor has the skills to not only listen well, drawing out a person’s needs through open-ended questions, but also has the ability to recognize people’s strengths and weaknesses. She will draw upon this extensive successful experience in addition to the knowledge collected over a period of 18 years working professionally. Much of the “people” skills have been developed during the seven years spent in management roles. This experience, along with a varied background, supports AAP’s goals.
AAP’s objectives are threefold:
The long-term goal of the company is to franchise and/or to become multi-location, and eventually sell this business.
Management is a style, a belief, and a strategy.
In managing our clients, AAP will communicate regularly with them, setting up a schedule that meets their needs. The company will set goals for retention of clientele and strive to reach those goals by building relationships, listening to the client’s needs, and meeting those needs with a smile on our faces. We will take responsibility for our errors and the outcome.
In managing our workers, AAP will communicate regularly with them, providing them with an employee manual to minimize their confusion, and offer them the best pay and benefits possible. AAP will set goals for retention of employees and strive to reach those goals by treating each employee with respect, provide protection when appropriate, and do everything within our power to assure a healthy working environment.
This is a relationship business. AAP will manage all clients and employees through relationship building.
During 1998-99 the proprietor provided all services. In 2000 the company will add a part-time office staffer and an employment specialist. In response to this growth, we will have a procedures manual for in-house staff assuring that the information is clear. In addition, we will provide employees with regular training within the divisions to assure they understand the details of the work they are doing daily. 2001 projections include a receptionist, another employment specialist, and a field representative. In 2002 AAP will examine the feasibility of opening a branch office in the Salem, Bend, or Medford/Ashland areas.
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Placed Employees Personnel | |||
Placed Workers at 2/3 of Sales | $51,836 | $99,750 | $171,000 |
Other | $0 | $0 | $0 |
Subtotal | $51,836 | $99,750 | $171,000 |
General and Administrative Personnel | |||
Office Employees | $10,929 | $25,000 | $30,000 |
Other | $0 | $0 | $0 |
Subtotal | $10,929 | $25,000 | $30,000 |
Total People | 0 | 0 | 0 |
Total Payroll | $62,765 | $124,750 | $201,000 |
All About People runs its payroll twice a month. Each professional will be given a check schedule when they work with AAP. Each check covers the previous two weeks.
In order to process payroll; AAP must receive a professional’s signed invoice the Wednesday prior to payday. The invoice, must be on AAP letterhead and include: name, social security number, mailing address, dates of work completed, location worked (at home, at the client’s office), one or two sentences describing what tasks were completed, and how much time was spent each day. At the bottom there must be a place for the client to sign and date in acceptance of the work to date. The original will be submitted to AAP, the client will receive one copy, and the professional will keep a copy.
AAP is unable to provide payroll advances. If a check is lost in the mail, we must wait seven days from the date of mailing, and then if the check has not arrived we will stop the check at the bank and have one reissued.
Because we value our employees, we have employee group health insurance available, and contribute a major portion of the monthly premium. According to the Insurance Pool Governing Board (IPGB) employees must work at least 17.5 hours per week. Employees who work intermittently or who have worked fewer than 90 calendar days are not eligible. IPGB also states that all carriers may decline to offer coverage to the business or to any employee.
Technically, All About People is employer of the professionals we place. This means that we are responsible for covering the worker’s compensation insurance, running payroll, and that we are the ones to whom each employee is responsible. We understand that this can be tricky when employee professionals are working with a client, so we want to describe the expectations of this relationship:
AAP does not guarantee either work or wages when you join us to become an AAP employee. We will, of course, strive to keep you as busy as possible. AAP is also not able to guarantee an hourly wage prior to the assignment beginning. If you work on a job, and complete the work successfully, you will be paid at the agreed rate.
This employment relationship differs from others because you, AAP, or the client may end your employment with or without notice and with or without reasons. However, if you accept a job with AAP, we do expect you to finish the assignment.
AAP’s target market is both businesses and professional workers. Phase one of the marketing plan will target the University of Oregon, the technology industry, and the top 500 businesses in Eugene through networking and cold calling. Phase two will target small businesses with less than five employees because smaller businesses may not have the in-house capability to locate, evaluate, and hire potential professional contingent workers through a small PR campaign.
We began marketing the businesses through several personnel surveys. The University of Oregon Alumni Association, University of Oregon Foundation, and University of Oregon Human Resources Department, as well as Symantec’s Human Resources director were approached for information regarding their need for professional temporary and permanent workers. These initial interviewees have all (with the exception of U of O HR Dept) become clients within the first year of business. After these personnel surveys were complete, we adjusted our recruitment of professional workers to meet the demand.
Another tactic was joining multiple business groups. AAP became a member of the Eugene Chamber of Commerce and attends the weekly greeters meetings; the Women’s Business Network and attends the monthly meetings; the Professional Women’s Organization and attend the monthly meetings; as well as the City Club, keeping a pulse on what is happening in the community, attending as the proprietor sees fit.
The next approach is face-to-face cold calls. The tools for these calls are simple-a business card and a brochure. The information collected during the cold call is vital: how many employees does the business have; in what areas have they experienced a need for professional contingent employees; and who is the appropriate contact.
Our beginning point in marketing to workers was approximately 30 personnel surveys to professional contingent workers, building the foundation of our database. AAP intends to recruit workers through advertising in the newspaper and appropriate trade magazines, trade shows, the University of Oregon career center, and by referral. We have found that each division within the company requires a different approach for recruitment. We try not to depend on newspaper advertising as we find the results are moderate. Results are far better with the employment department for some areas, with the U of O for others, and also through a series of developed contacts for the other divisions.
In order to build trust with both businesses and employees AAP will follow through as promised. We will treat each business, employee, and ourselves, with integrity. AAP will communicate clearly, asking businesses to specify the needs for follow-up service during the time that they employ our contingent worker. We will work with employees to assure that they have a clear understanding of what AAP offers and what we expect of them.
“A fading model of employment in the United States envisions a business enterprise with full-time employees who can expect to keep their jobs and perhaps advance so long as they perform satisfactorily and the business continues. Changing labor market conditions threaten the concept of full-time permanent employment. As reported by the Conference Board in September 1995, contingent workers account for at least 10 percent of the workforce at 21 percent of the companies surveyed, or almost double the 12 percent of respondents with that number in 1990. Writing in the Monthly Labor Review in March 1989, Belous estimated that contingent workers constitutes 24 to 29 percent of the labor force in the United States. In August 1995, however, the U.S. Bureau of Labor Statistics (BLS) estimated the size of the contingent labor force at 2 to 5 percent of the total workforce. However, BLS did not count long-term part-time employees, who constitute 90 percent of part-time workers.” — Society for Human Resource Management, The Contingent Worker: A Human Resource Perspective, by W. Gilmore McKie & Laurence Lipset taken from Chapter 1, What Is a Contingent Worker?
AAP is a service company providing businesses with customized personnel solutions by connecting them with the professional contingent work force. Research suggests that 2000 is an opportune time to be in the Eugene market with this service. Even with all of the evidence that contingent work is the wave of the present, and of the future, the niche of placing contingent workers who are paid $12.50 to $40 per hour is untapped in the Eugene area. However, a few companies place high-end contingent workers in the Portland area.
There are many reasons why businesses are turning to contingent workers. The Economic Policy Institute’s article “ Contingent Work ” by Polly Callaghan and Heidi Harmann explains that:
“Growth in involuntary part-time employment is causing total part-time employment to grow faster than total employment. Another indication of the shift toward part-time workers: hours for part-time workers are growing faster than hours for full-time workers. Temporary employment has grown three times faster than overall employment and temporary workers are being used for more hours. Contingent employment is growing faster than overall employment. Part-timers are disproportionately women, younger, or older workers. There has been a shift away from manufacturing toward trade and services. These structural changes help explain the growth in part-time employment.”
Because of the changing nature of jobs themselves, AAP’s services are desirable to employers of all sizes. Unlike five or ten years ago, many positions are so diversified, or specialized, that it is not financially feasible for an employer to hire a person to fill one position, requiring several areas of expertise. This is not financially wise for the business because of the pay range required to recruit and hire such a talented person (especially in areas such as graphics, design, etc.). The cost of payroll, taxes, benefits, and other miscellaneous staff required to run employees add to the burden of a downsized staff. Contacting AAP and using a professional contingent worker for each portion of a position as needed will solve this dilemma. Currently most businesses locate needed “qualified” workers by word of mouth. With one phone call, e-mail, or connection with our Web page, AAP makes the task easy.
In addition, Oregon’s economy is expected to continue growing, and employment, total personal and per capita income, and population growth rates are expected to exceed the national average (according to the 1997-98 Oregon Blue Book). Although Oregon’s economy is among the best there is an obvious group of contingent workers available to build an employee labor pool. The company draws from a labor pool of qualified contingent workers which consists of people who work at home, retirees, others who wish to work part-time. According to the Oregon University System, approximately 33% of bachelor’s degree graduates will be unable to find jobs in Oregon each year. So, recent college graduates are also a part of AAP’s labor pool.
Research shows that a large percentage of workers who tend to work more than one job are well-educated individuals who have a higher degree of education. According to Oregon Employment Department’s Occupational Outlook Quarterly , Spring 1997, 9.4% have Ph.D.’s; 6.5% a Professional degree; 9.1% a Master’s degree; 7.9% a Bachelor’s degree; 7.9% an Associate degree; and the remaining 15.8% lesser education. According to a Personnel Journal article “ Contingent Staffing Requires Serious Strategy ,” April 1995, there are also many retirees that enjoy doing contingent work.
The following sections contain the financial information for All About People. Tables show annual projections for three years. Charts show first year monthly figures. First year monthly tables are included in the appendix.
The financials of this plan are predicated on the following table of assumptions.
General Assumptions | |||
Year 1 | Year 2 | Year 3 | |
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 7.00% | 7.00% | 7.00% |
Tax Rate | 0.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 |
Profit and Loss figures are projected in this table.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $94,248 | $175,000 | $300,000 |
Direct Cost of Sales | $0 | $0 | $0 |
Placed Employees Payroll | $51,836 | $99,750 | $171,000 |
Other | $0 | $0 | $0 |
Total Cost of Sales | $51,836 | $99,750 | $171,000 |
Gross Margin | $42,412 | $75,250 | $129,000 |
Gross Margin % | 45.00% | 43.00% | 43.00% |
Operating Expenses | |||
Sales and Marketing Expenses | |||
Sales and Marketing Payroll | $0 | $0 | $0 |
Advertising/Promotion | $1,165 | $1,200 | $2,500 |
Bank Service Charges | $1,019 | $1,000 | $1,500 |
Contributions | $255 | $300 | $300 |
Dues & Subscriptions | $887 | $250 | $500 |
Total Sales and Marketing Expenses | $3,325 | $2,750 | $4,800 |
Sales and Marketing % | 3.53% | 1.57% | 1.60% |
General and Administrative Expenses | |||
General and Administrative Payroll | $10,929 | $25,000 | $30,000 |
Marketing/Promotion | $6,516 | $6,500 | $12,800 |
Depreciation | $0 | $0 | $0 |
Telephone & Pager | $4,168 | $4,800 | $5,000 |
Recruitment | $1,573 | $1,575 | $2,000 |
Referral Fees | $170 | $250 | $500 |
Rent | $6,102 | $9,600 | $10,000 |
Office Supplies | $2,114 | $2,000 | $3,000 |
Postage | $1,062 | $1,250 | $1,500 |
Printing | $3,362 | $4,000 | $5,000 |
Professional Fees | $6,941 | $5,000 | $7,500 |
Payroll Taxes | $0 | $0 | $0 |
Maintenance and Repairs | $311 | $750 | $2,000 |
Total General and Administrative Expenses | $43,248 | $60,725 | $79,300 |
General and Administrative % | 45.89% | 34.70% | 26.43% |
Other Expenses: | |||
Other Payroll | $0 | $0 | $0 |
Consultants | $0 | $0 | $0 |
Misc. | $1,050 | $500 | $1,000 |
Total Other Expenses | $1,050 | $500 | $1,000 |
Other % | 1.11% | 0.29% | 0.33% |
Total Operating Expenses | $47,623 | $63,975 | $85,100 |
Profit Before Interest and Taxes | ($5,212) | $11,275 | $43,900 |
EBITDA | ($5,212) | $11,275 | $43,900 |
Interest Expense | $3,046 | $2,678 | $2,363 |
Taxes Incurred | $0 | $2,579 | $12,461 |
Net Profit | ($8,257) | $6,018 | $29,076 |
Net Profit/Sales | -8.76% | 3.44% | 9.69% |
Our cash flow estimates are shown in the chart and table below. The owner expects to invest further amounts in the business over the next two years to finance continued growth.
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $23,562 | $43,750 | $75,000 |
Cash from Receivables | $58,112 | $120,477 | $208,324 |
Subtotal Cash from Operations | $81,674 | $164,227 | $283,324 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $10,000 | $20,000 | $0 |
Subtotal Cash Received | $91,674 | $184,227 | $283,324 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $62,765 | $124,750 | $201,000 |
Bill Payments | $37,123 | $43,357 | $67,812 |
Subtotal Spent on Operations | $99,888 | $168,107 | $268,812 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $2,720 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $4,500 | $4,500 | $4,500 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $107,108 | $172,607 | $273,312 |
Net Cash Flow | ($15,434) | $11,620 | $10,012 |
Cash Balance | $30,566 | $42,186 | $52,199 |
Three year annual balance sheets estimates appear below.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $30,566 | $42,186 | $52,199 |
Accounts Receivable | $12,573 | $23,346 | $40,022 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $43,139 | $65,533 | $92,221 |
Long-term Assets | |||
Long-term Assets | $0 | $0 | $0 |
Accumulated Depreciation | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 |
Total Assets | $43,139 | $65,533 | $92,221 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $2,761 | $3,635 | $5,747 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $2,761 | $3,635 | $5,747 |
Long-term Liabilities | $40,500 | $36,000 | $31,500 |
Total Liabilities | $43,261 | $39,635 | $37,247 |
Paid-in Capital | $17,600 | $37,600 | $37,600 |
Retained Earnings | ($9,464) | ($17,721) | ($11,703) |
Earnings | ($8,257) | $6,018 | $29,076 |
Total Capital | ($121) | $25,897 | $54,973 |
Total Liabilities and Capital | $43,139 | $65,533 | $92,221 |
Net Worth | ($121) | $25,897 | $54,973 |
The table below presents important business ratios from the help supply services industry, as determined by the Standard Industry Classification (SIC) Index code 7363, Help Supply Services.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 85.68% | 71.43% | 9.00% |
Percent of Total Assets | ||||
Accounts Receivable | 29.15% | 35.63% | 43.40% | 28.80% |
Other Current Assets | 0.00% | 0.00% | 0.00% | 44.00% |
Total Current Assets | 100.00% | 100.00% | 100.00% | 76.30% |
Long-term Assets | 0.00% | 0.00% | 0.00% | 23.70% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 6.40% | 5.55% | 6.23% | 44.00% |
Long-term Liabilities | 93.88% | 54.93% | 34.16% | 17.50% |
Total Liabilities | 100.28% | 60.48% | 40.39% | 61.50% |
Net Worth | -0.28% | 39.52% | 59.61% | 38.50% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 45.00% | 43.00% | 43.00% | 0.00% |
Selling, General & Administrative Expenses | #NAME? | 39.56% | 33.31% | 82.20% |
Advertising Expenses | 1.24% | 0.69% | 0.83% | 1.50% |
Profit Before Interest and Taxes | -5.53% | 6.44% | 14.63% | 2.40% |
Main Ratios | ||||
Current | 15.63 | 18.03 | 16.05 | 1.64 |
Quick | 15.63 | 18.03 | 16.05 | 1.31 |
Total Debt to Total Assets | 100.28% | 60.48% | 40.39% | 61.50% |
Pre-tax Return on Net Worth | 6817.49% | 33.20% | 75.56% | 4.40% |
Pre-tax Return on Assets | -19.14% | 13.12% | 45.04% | 11.50% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -8.76% | 3.44% | 9.69% | n.a |
Return on Equity | 0.00% | 23.24% | 52.89% | n.a |
Activity Ratios | ||||
Accounts Receivable Turnover | 5.62 | 5.62 | 5.62 | n.a |
Collection Days | 57 | 50 | 51 | n.a |
Accounts Payable Turnover | 14.40 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 26 | 24 | n.a |
Total Asset Turnover | 2.18 | 2.67 | 3.25 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.00 | 1.53 | 0.68 | n.a |
Current Liab. to Liab. | 0.06 | 0.09 | 0.15 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $40,379 | $61,897 | $86,473 | n.a |
Interest Coverage | -1.71 | 4.21 | 18.58 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.46 | 0.37 | 0.31 | n.a |
Current Debt/Total Assets | 6% | 6% | 6% | n.a |
Acid Test | 11.07 | 11.60 | 9.08 | n.a |
Sales/Net Worth | 0.00 | 6.76 | 5.46 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Placement Fees | 0% | $3,660 | $4,769 | $5,965 | $7,226 | $9,471 | $12,554 | $12,237 | $10,216 | $3,692 | $7,458 | $7,059 | $9,941 |
Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Sales | $3,660 | $4,769 | $5,965 | $7,226 | $9,471 | $12,554 | $12,237 | $10,216 | $3,692 | $7,458 | $7,059 | $9,941 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Placement Fees | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Placed Employees Personnel | |||||||||||||
Placed Workers at 2/3 of Sales | $2,013 | $2,623 | $3,281 | $3,974 | $5,209 | $6,905 | $6,730 | $5,619 | $2,031 | $4,102 | $3,882 | $5,467 | |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal | $2,013 | $2,623 | $3,281 | $3,974 | $5,209 | $6,905 | $6,730 | $5,619 | $2,031 | $4,102 | $3,882 | $5,467 | |
General and Administrative Personnel | |||||||||||||
Office Employees | $0 | $213 | $350 | $350 | $350 | $466 | $700 | $1,500 | $1,750 | $1,750 | $1,750 | $1,750 | |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal | $0 | $213 | $350 | $350 | $350 | $466 | $700 | $1,500 | $1,750 | $1,750 | $1,750 | $1,750 | |
Total People | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Total Payroll | $2,013 | $2,836 | $3,631 | $4,324 | $5,559 | $7,371 | $7,430 | $7,119 | $3,781 | $5,852 | $5,632 | $7,217 |
General Assumptions | ||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $3,660 | $4,769 | $5,965 | $7,226 | $9,471 | $12,554 | $12,237 | $10,216 | $3,692 | $7,458 | $7,059 | $9,941 | |
Direct Cost of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Placed Employees Payroll | $2,013 | $2,623 | $3,281 | $3,974 | $5,209 | $6,905 | $6,730 | $5,619 | $2,031 | $4,102 | $3,882 | $5,467 | |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $2,013 | $2,623 | $3,281 | $3,974 | $5,209 | $6,905 | $6,730 | $5,619 | $2,031 | $4,102 | $3,882 | $5,467 | |
Gross Margin | $1,647 | $2,146 | $2,684 | $3,252 | $4,262 | $5,649 | $5,507 | $4,597 | $1,661 | $3,356 | $3,177 | $4,474 | |
Gross Margin % | 45.00% | 45.00% | 45.00% | 45.00% | 45.00% | 45.00% | 45.00% | 45.00% | 44.99% | 45.00% | 45.01% | 45.00% | |
Operating Expenses | |||||||||||||
Sales and Marketing Expenses | |||||||||||||
Sales and Marketing Payroll | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Advertising/Promotion | $12 | $0 | $0 | $23 | $10 | $111 | $27 | $72 | $30 | $599 | $102 | $179 | |
Bank Service Charges | $0 | $57 | $3 | $73 | $539 | $106 | $38 | $3 | $8 | $48 | $129 | $15 | |
Contributions | $0 | $0 | $0 | $100 | $5 | $0 | $0 | $100 | $0 | $0 | $0 | $50 | |
Dues & Subscriptions | $43 | $30 | $54 | $0 | $0 | $21 | $275 | $94 | $0 | $250 | $60 | $60 | |
Total Sales and Marketing Expenses | $55 | $87 | $57 | $196 | $554 | $239 | $340 | $268 | $38 | $897 | $291 | $304 | |
Sales and Marketing % | 1.50% | 1.82% | 0.95% | 2.71% | 5.85% | 1.90% | 2.78% | 2.63% | 1.02% | 12.03% | 4.12% | 3.06% | |
General and Administrative Expenses | |||||||||||||
General and Administrative Payroll | $0 | $213 | $350 | $350 | $350 | $466 | $700 | $1,500 | $1,750 | $1,750 | $1,750 | $1,750 | |
Marketing/Promotion | $213 | $236 | $331 | $691 | $756 | $656 | $592 | $441 | $154 | $1,149 | $784 | $514 | |
Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Telephone & Pager | $226 | $88 | $416 | $125 | $374 | $220 | $439 | $638 | $697 | $240 | $616 | $90 | |
Recruitment | $115 | $77 | $189 | $220 | $71 | $147 | $106 | $251 | $45 | $192 | $65 | $95 | |
Referral Fees | $0 | $20 | $0 | $50 | $0 | $100 | $0 | $0 | $0 | $0 | $0 | $0 | |
Rent | $195 | $195 | $195 | $195 | $195 | $195 | $983 | $788 | $788 | $788 | $788 | $798 | |
Office Supplies | $92 | $188 | $96 | $197 | $49 | $62 | $116 | $442 | $24 | $670 | $177 | $0 | |
Postage | $9 | $49 | $55 | $107 | $133 | $94 | $36 | $99 | $8 | $175 | $89 | $209 | |
Printing | $0 | $2 | $669 | $26 | $290 | $350 | $175 | $224 | $832 | $179 | $520 | $94 | |
Professional Fees | $240 | $170 | $664 | $988 | $367 | $270 | $0 | $528 | $844 | $342 | $2,013 | $516 | |
Payroll Taxes | 15% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Maintenance and Repairs | $0 | $0 | $103 | $100 | $0 | $25 | $0 | $39 | $0 | $0 | $44 | $0 | |
Total General and Administrative Expenses | $1,090 | $1,239 | $3,068 | $3,049 | $2,585 | $2,585 | $3,146 | $4,949 | $5,142 | $5,485 | $6,845 | $4,065 | |
General and Administrative % | 29.77% | 25.97% | 51.43% | 42.19% | 27.30% | 20.59% | 25.71% | 48.45% | 139.28% | 73.55% | 96.97% | 40.90% | |
Other Expenses: | |||||||||||||
Other Payroll | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Consultants | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Misc. | $40 | $0 | $44 | $244 | $90 | $240 | $159 | $0 | $40 | $20 | $173 | $0 | |
Total Other Expenses | $40 | $0 | $44 | $244 | $90 | $240 | $159 | $0 | $40 | $20 | $173 | $0 | |
Other % | 1.09% | 0.00% | 0.74% | 3.38% | 0.95% | 1.91% | 1.30% | 0.00% | 1.08% | 0.27% | 2.45% | 0.00% | |
Total Operating Expenses | $1,185 | $1,325 | $3,168 | $3,488 | $3,229 | $3,064 | $3,645 | $5,218 | $5,220 | $6,403 | $7,309 | $4,369 | |
Profit Before Interest and Taxes | $462 | $821 | ($484) | ($236) | $1,033 | $2,585 | $1,862 | ($621) | ($3,559) | ($3,047) | ($4,132) | $104 | |
EBITDA | $462 | $821 | ($484) | ($236) | $1,033 | $2,585 | $1,862 | ($621) | ($3,559) | ($3,047) | ($4,132) | $104 | |
Interest Expense | $283 | $281 | $260 | $258 | $256 | $254 | $251 | $245 | $243 | $241 | $238 | $236 | |
Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Profit | $180 | $540 | ($744) | ($494) | $777 | $2,332 | $1,610 | ($866) | ($3,802) | ($3,287) | ($4,370) | ($132) | |
Net Profit/Sales | 4.90% | 11.32% | -12.48% | -6.84% | 8.21% | 18.57% | 13.16% | -8.47% | -102.97% | -44.08% | -61.91% | -1.33% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $915 | $1,192 | $1,491 | $1,807 | $2,368 | $3,139 | $3,059 | $2,554 | $923 | $1,865 | $1,765 | $2,485 | |
Cash from Receivables | $0 | $92 | $2,773 | $3,607 | $4,505 | $5,476 | $7,180 | $9,408 | $9,127 | $7,499 | $2,863 | $5,584 | |
Subtotal Cash from Operations | $915 | $1,284 | $4,264 | $5,413 | $6,873 | $8,614 | $10,240 | $11,962 | $10,050 | $9,363 | $4,628 | $8,069 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $10,000 | |
Subtotal Cash Received | $915 | $1,284 | $4,264 | $5,413 | $6,873 | $8,614 | $10,240 | $11,962 | $10,050 | $9,363 | $4,628 | $18,069 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $2,013 | $2,836 | $3,631 | $4,324 | $5,559 | $7,371 | $7,430 | $7,119 | $3,781 | $5,852 | $5,632 | $7,217 | |
Bill Payments | $193 | $1,465 | $1,449 | $3,089 | $3,388 | $3,125 | $2,863 | $3,222 | $3,954 | $3,752 | $4,923 | $5,699 | |
Subtotal Spent on Operations | $2,206 | $4,301 | $5,080 | $7,413 | $8,947 | $10,496 | $10,293 | $10,341 | $7,735 | $9,604 | $10,555 | $12,916 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $2,220 | $0 | $0 | $0 | $0 | $500 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $375 | $375 | $375 | $375 | $375 | $375 | $375 | $375 | $375 | $375 | $375 | $375 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $2,581 | $4,676 | $7,675 | $7,788 | $9,322 | $10,871 | $10,668 | $11,216 | $8,110 | $9,979 | $10,930 | $13,291 | |
Net Cash Flow | ($1,666) | ($3,392) | ($3,411) | ($2,375) | ($2,449) | ($2,257) | ($428) | $745 | $1,940 | ($616) | ($6,303) | $4,777 | |
Cash Balance | $44,334 | $40,942 | $37,530 | $35,156 | $32,707 | $30,450 | $30,022 | $30,767 | $32,707 | $32,091 | $25,789 | $30,566 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $46,000 | $44,334 | $40,942 | $37,530 | $35,156 | $32,707 | $30,450 | $30,022 | $30,767 | $32,707 | $32,091 | $25,789 | $30,566 |
Accounts Receivable | $0 | $2,745 | $6,230 | $7,931 | $9,744 | $12,342 | $16,282 | $18,279 | $16,534 | $10,176 | $8,270 | $10,701 | $12,573 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $46,000 | $47,079 | $47,172 | $45,462 | $44,900 | $45,049 | $46,732 | $48,301 | $47,301 | $42,883 | $40,361 | $36,490 | $43,139 |
Long-term Assets | |||||||||||||
Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Assets | $46,000 | $47,079 | $47,172 | $45,462 | $44,900 | $45,049 | $46,732 | $48,301 | $47,301 | $42,883 | $40,361 | $36,490 | $43,139 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $144 | $1,419 | $1,347 | $2,976 | $3,283 | $3,030 | $2,756 | $3,090 | $3,831 | $3,589 | $4,730 | $5,604 | $2,761 |
Current Borrowing | $2,720 | $2,720 | $2,720 | $500 | $500 | $500 | $500 | $500 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $2,864 | $4,139 | $4,067 | $3,476 | $3,783 | $3,530 | $3,256 | $3,590 | $3,831 | $3,589 | $4,730 | $5,604 | $2,761 |
Long-term Liabilities | $45,000 | $44,625 | $44,250 | $43,875 | $43,500 | $43,125 | $42,750 | $42,375 | $42,000 | $41,625 | $41,250 | $40,875 | $40,500 |
Total Liabilities | $47,864 | $48,764 | $48,317 | $47,351 | $47,283 | $46,655 | $46,006 | $45,965 | $45,831 | $45,214 | $45,980 | $46,479 | $43,261 |
Paid-in Capital | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $17,600 |
Retained Earnings | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) | ($9,464) |
Earnings | $0 | $180 | $719 | ($25) | ($519) | $258 | $2,590 | $4,200 | $3,334 | ($467) | ($3,755) | ($8,125) | ($8,257) |
Total Capital | ($1,864) | ($1,684) | ($1,145) | ($1,889) | ($2,383) | ($1,606) | $726 | $2,336 | $1,470 | ($2,331) | ($5,619) | ($9,989) | ($121) |
Total Liabilities and Capital | $46,000 | $47,079 | $47,172 | $45,462 | $44,900 | $45,049 | $46,732 | $48,301 | $47,301 | $42,883 | $40,361 | $36,490 | $43,139 |
Net Worth | ($1,864) | ($1,684) | ($1,145) | ($1,889) | ($2,383) | ($1,606) | $726 | $2,336 | $1,470 | ($2,331) | ($5,619) | ($9,989) | ($121) |
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Home » Blog » Where to start with a recruitment business plan
Rhys jones written by rhys jones managing director – davidson gray.
Rhys sold out of his previous recruitment businesses in 2012 to focus solely on helping recruiters set up and build recruitment businesses. Follow Rhys on LinkedIn or contact him direct here for help with your start-up recruitment business or for coaching to grow an existing one.
You’ll be pleased to hear that in my experience a recruitment agency start up business plan need only contain a few essentials and really isn’t rocket science. You only need a basic plan to start, well thought through definitely, but not War and Peace.
A start up recruitment business plan doesn’t need to be super sophisticated. However what you do need is a well thought through plan so you can build solid foundations for growth, remove as much risk as possible and allow you, once you go live, to concentrate on the exciting bit, BILLING, rather than working things out as you go along. The planning now will make the real fun part of making money so much easier with fewer distractions, and allow you to really enjoy being your own boss and owning your own business. So spend that time now, trust me it’s a fabulous investment and you’ll be grateful for it when you make a flying start in your new recruitment agency.
If you search on the web, you’ll find various contradictory ideas on what a business plan should contain, which can leave you worse-off than when you started, confused on which way is the best way. I hope in this series of blogs I can take some of that confusion away for you. I’ve been lucky enough to have hands on experience of building my first businesses from the ground up. Added to this, I improved my knowledge with additional learning gained at Cranfield Business School, which I applied to those early businesses and the many more recruitment businesses in different sectors I went on to set up, all of which are continuing successful companies. So with this experience, I’d like to think my ideas on recruitment agency business plans are worth considering (sorry if this sounds like I think I’m the Richard Branson of recruitment, it’s not meant to, but think it helps explaining my experience).
The common school of learning on business plans is to use the SWOT analysis, i.e. what will be the planned business’s:
I don’t disagree that you could add this to your plan, and it’s handy to have in, but this series of blogs look at what I feel are specific and essential to a recruitment business plan (plus the bits you may not know if you’ve never set a business up before). Where to start.
To see if you do have the basics of a business in you, I advise firstly to look at the sales and cash flow forecast. If your business idea doesn’t pass this test, you need not waste your time any further – your business just won’t fly. So let’s start with the engine of the business, money in.
To allow you to write your cash flow forecast, you’ll need a well thought through sales forecast.
There’s lot to consider here, a lot more than first appears. You can’t just take what you bill now and assume you can simply replicate that without understanding where your current billings come from. So, below are ways to stress test where your current billings actually come from by looking at where you get both your vacancies and candidates.
Needless to say finding good candidates is critical to your placements, so you need to make sure you have thought about where you will get them from. To help understand where you are currently successful, I suggest you look at your last six months’ billings and write next to each candidate placed where that candidate came from. Was it a headhunt call, a referral from previous candidates / clients, was the candidate off the business database, were they from a job board, social media, LinkedIn, Twitter etc? This is a real life study based on you, and how you are currently successful. It’s invaluable to understand what you will be able to easily reproduce when working for yourself e.g. headhunt calls, LinkedIn etc. and parts you may need to make up for e.g. candidates who came from a database search. So this will help you appreciate how easy or not candidate attraction will be for your sales forecast. It will also help get you thinking what you can do to make up for any tools you have now in the workplace but won’t have when you leave. Plus, if it’s job board centric then this is a cost you need to add to your cash flow plan. I’m not going to go into how to improve your candidate attraction here (that will be another blog) but if you’re currently very dependent on the company database, this should ring alarm bells and you need to think ahead and plan how to recruit successfully without it. And try applying these new techniques now whilst you’re still employed to perfect them so you can add their added sales value to your plan with confidence.
At this stage it’s pertinent that I bring up the potential handicap that your current employment contract’s restrictive covenants may have on your planned client base. The current widely accepted covenant, i.e. what the courts see as ‘fair and reasonable’, is that you can be restricted from trading with any clients you’ve had ‘material dealings with’ over the last twelve months with your current employer, for the next six months once you leave (any more than this is seen as unreasonable).
Now this isn’t to say if it’s in your contract that means you’re definitely frozen out from this potentially lucrative group of businesses, there could be errors elsewhere in your contract that makes this void. So get it legally checked and from a commercial angle if you can. Law isn’t black and white and getting good commercial legal advice is hugely valuable which is why I use Barrister Greg Walsh of Greg Walsh Law for my Davidson Gray partner businesses. I see it as that valuable to get good quality advice. But if your current clients are off limits for the first six months, work this into your plan. Next, go back again over the last six months’ placements and mark where your clients/vacancies came from as you’ve done for your candidates. Do the clients come to you for you, or because of who you work for, are they from a PSL you won’t be on, were there any from a mailshot, new business cold call etc? This will quickly show you where your current vacancies come from so you can write your sales forecast from a true picture of what you can and can’t replicate easily. Plus, if some methods you use now to gain clients are removed or won’t be as effective once you leave, you have time to plan new business development and marketing initiatives to replace this business. And as with the new candidate attraction strategies, see how they work where you are now, but maybe not too much, you don’t want too many new clients your covenants could restrict!
Once you’ve considered the above, you will be able to see more clearly what tools and advantages you currently benefit from where you work. It should now be easier for you to write a realistic sales forecast. I find it helpful to write two sales forecasts, one you feel is realistically achievable and one that you feel is the absolute minimum you’ll achieve. The bare minimum one is important in your cash flow forecast. You don’t want to get five months in and run out of cash, so if you know the bare minimum you’ll achieve, you can see how much of a cash buffer you’ll need. The realistic forecast is the one you plan for with the activity you expect to hit, the KPIs you set yourself etc. Plus this can be your motivator, as you should be earning a lot more on this forecast than you currently are very, very quickly!
So simply start with month one, and take it through to month twelve. You can’t realistically predict year two in a start-up. You will learn a lot midway through year one and you can use this learning for year two’s forecast.
Once you’ve done your sales forecast, you can use this in your cash flow forecast. I will go into this in my next blog where I’ll explain how you can get a very good idea of how much it will cost to set up a recruitment business , running costs, and net profit month by month.
I hope you’ve found this second blog in the series helpful, and as always if you have any questions, feel free to contact me. You can find me on LinkedIn under my main business name of Davidson Gray.
Rhys not only provides the start-up infrastructure for your new business and all the support services your business will need, he can actually work with you to grow it. Take advantage of as much mentoring and coaching as you would like, plus Rhys considers himself a working partner and will take responsibility for the areas that you’d like him to, perhaps those you have the least passion for e.g. Finance and Digital Marketing. When working together on the business’s growth strategy, much of the effort to deliver it can be delegated to the Davidson Gray team.
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In this blog, aimed at recruiters, we examine the potential LinkedIn Recruiter options in more detail and find out what you get for your money and how to make the most of the investment.
What does it take to grow a recruitment business in these uncertain economic times? In this blog, originally published in The Global Recruiter, Rhys looks at what it takes to grow a recruitment business in 2023.
Leadership or management – which one’s the more important skill to have when growing your recruitment business? We’ll look at why it’s crucial to have both and when to use them to greatest effect.
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Leadership or management - what's more important to a growing recruitment business, why business owners should never take their staff for granted., what is recruitment factoring and why do we do ours in house, how to choose a crm for your new recruitment agency, useful links.
June 5, 2024
To start an online recruitment agency:
1. Develop a business plan
2. Choose a niche
3. Register the business
4. Set up a website
5. Use a recruiting software
6. Build your online presence on social media
7. Build your network
8. Build your agency's brand and market it, and
9. Onboard a powerful recruitment team
Yasin Nabi further simplifies the process in three steps. He started with zero recruitment background and minimal capital. He suggests targeting small to medium-sized companies. This slowly builds your initial client base. Next, he says you should strategically market your services. Visibility helps you attract a higher number of CVs and job applications. This will help you get requests from companies for staffing solutions.
The third step is to collect and match CVs. This will help you focus on the right candidates for the right positions. It involves understanding the legal and procedural aspects of setting up a recruitment agency. The basics include registering with the relevant tax authorities. However, it can vary in different countries.
This article explains how to start a recruitment business in 9 simple steps. There's also a checklist for beginners and tips for choosing the right location and business model for your recruiting business.
Best Recruitment Agency Niches According To The Solopreneur Recruiter:
Abu Musa started a recruitment agency by first identifying the business model he was most comfortable with. Next, he chose a niche. This helped him determine the specific industry or type of jobs his new agency will focus on. Next, he set up basic tools and gathered the essential equipment. He only needed a laptop and mobile phone to get started. He launched his agency from his living room.
Abu advised against spending money on extensive marketing or office space while you’re starting. His priority was to keep overhead as low as possible. Abu also focused on proactive strategies like cold calling and email marketing. This builds relationships and secures contracts with clients. He used job boards to find candidates and leverage professional networks. This helped him find great potential candidates for various roles. He streamlined business operations to scale his recruitment agency. He maintains his competitive edge by staying updated with the labor market trends.
Job Board Model: The agency creates an online recruitment platforms where employers can post listings. Companies pay a fee to post jobs.
Resume Database Access Model: It collects resumes from job seekers, creates a database with it, and shares it with employers. Companies pay a subscription fee to access the database.
Recruitment Process Outsourcing (RPO): The agency takes over all or a part of the recruitment process. This can range from the initial candidate search to managing the entire hiring lifecycle. Agencies charge based on the level of services provided. It can be a fixed fee, a percentage, or a monthly retainer.
Niche Recruitment: This model focuses on specific industries or job roles. It provides specialized recruitment services in popular niches like technology and healthcare.
Contract-Based Hiring: Agencies connect freelancers with short-term projects or contractual work. Income is typically a percentage of the contract value.
Executive Search: Recruitment agencies headhunt for executive-level roles. It's a highly personalized and confidential process.
Flat Fee Recruitment: Agencies charge a fixed fee instead of percentage based on salary. It's the most cost-effective solution for small to medium-sized businesses.
Optimize Your Recruiting Niche : Get more clients by specializing in specific roles. Concentrate on areas where you can excel. Recruit high-skill positions like financial controllers, software engineers, and sales representatives. Focusing on a specific niche improves credibility and helps you get recognized as an expert.
Strengthen Your Network : Build and maintain relationships primarily with hiring managers instead of other recruiters. Use LinkedIn to connect with industry leaders and join in online and in-person industry events. Every interaction could lead to a potential client or a valuable candidate.
Leverage Social Proof : Gather LinkedIn recommendations from every hiring manager and candidate you have successfully worked with. Endorsements boost your profile by showing your successful track record. This attracts new clients.
Install Client Acquisition Systems : Implement automated systems for business development, such as LinkedIn Automation and email marketing. These tools ensure consistent outreach efforts without requiring your constant manual input. This is ideal for those who want to do online recruitment as a side hustle.
Avoid Common Pitfalls: Avoid getting penalized on LinkedIn or landing in spam folders. Follow the best practices for recruitment tools to avoid setbacks and ensure a positive result from your efforts. Jon Chintanaroad shares more of this in his Recruitment Accelerator course.
It's profitable to start a recruiting agency in 2024 if you have a background and network in recruitment. BusinessDojo says recruitment agencies can make from $8,000 to $50,000 per month. Small and start-up agencies usually make around $8,000 to $15,000. Top-tier agencies that cater to executive markets make around $50,000 monthly.
Recruitment agencies usually make around 17.5% gross profit margin. However, the profit still depends on operating expenses and the business model used. Agencies that specialize in high-end niches make higher profits.
It typically takes two years to establish a profitable recruitment business. This timeline is based on Kadz Money's experience in starting a recruitment agency from scratch. Those who have a background and network in online recruitment can achieve profitability quicker.
Online recruitment agencies also have a hard time keeping clients. The average retention rate is only around 60%. Local lead gen clients stay long term because leads give them a competitive advantage. Income is more stable and consistent because small businesses pay a retention fee to keep the leads coming. Unlike online recruitment, local lead gen is low-maintenance and passive. Leads are generated on autopilot. You don't have to invest so much time and effort in making the business work.
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How to start a recruitment business, how to write a recruitment business plan, final thoughts, how do recruitment agencies make money uk, how much commission do recruiters earn uk, do i need a licence to start a recruitment agency uk.
It’s obvious that recruitment agencies now face a very different problem as the country’s economic recovery picks up speed. Although the environment for recruitment businesses is undoubtedly difficult, there are significant opportunities for intelligent operators, and the medium-to-long-term prospects for the sector are excellent, but having a good recruitment business plan in the UK makes it easier. A solid recruitment business plan is very important when you are starting your own recruitment agency to serve as a road map to a productive recruitment business.
Let’s zoom off!
External companies, known as recruitment agencies, help organizations discover qualified applicants. Employers assign them the responsibility of locating applicants for open positions within their organizations in order to save time and money and to gain access to a wider candidate pool than a direct advertisement or company network can.
Growing your portfolio of clients is vital to any new recruitment business. The following are the steps you need to follow when starting your recruitment business:
Anyone considering starting a recruitment business would benefit from prior experience as a recruiter or recruitment manager, but it is also feasible without prior HR knowledge. If you are new to the recruiting industry, you might think about taking a recognized course that will provide you with the skills and knowledge you need to understand how the recruitment industry operates.
Most importantly, you will discover efficient techniques for finding and hiring candidates. Knowing this is important since it can assist you in hiring HR professionals and recruiters who are qualified for your recruitment business. When you assign them recruitment tasks, you can use this expertise to ensure that they are efficient and productive.
If you’re going for a specific business sector, work to establish yourself as an authority and specialist in that field by conducting in-depth studies, participating in industry-related events and reading industry publications, and gradually building relationships with its major players. You have little chance of surviving as a freshly created recruiting agency unless you establish a specialty. Given the well-known brands and prominent positioning of the big companies, it is extremely challenging to compete in the general recruitment market.
Many of the most prosperous smaller-scale recruitment firms have flourished by adhering to a niche market they are intimately familiar with.
You can write a recruitment business plan to more effectively organize all of your recruitment business concepts. When launching a business, business plans are crucial, especially when you’re looking to get financing.
The most formal procedure for opening a recruiting agency is filing business registration forms with Companies House and HM Revenue and Customs (HMRC). You can do it yourself if you believe you have the required knowledge and abilities. A business can often be formed in a matter of hours, and the process can be completed online. Hiring a seasoned accountant to assist you in this procedure is an additional choice. You would receive a certificate of incorporation after registration, which would include the agency’s founding date.
These days, technology and recruitment agencies are closely related. As a result, you should spend money on the appropriate instruments because you’ll wind up saving a lot of time and money that way. One of the most well-liked and dependable pieces of online software used by recruiters is the applicant tracking system (ATS).
After deciding on the market and the type of recruiting firm you intend to launch, analyze your main rivals. Never play a game without understanding its rules and the players you’ll be up against as you strive to advance in the ranks and gain clients. Because of this, your initial study should focus on the major players in your target market, including their standing, record of success, and business background. Find out how their agency differs from what you had in mind and how you might take advantage of the holes they don’t fill.
When you decide it’s time to bring on extra recruiters to aid with workload management, it’s critical to continually provide them with alluring advancement prospects. They can continue developing their abilities in order to support the success of your organization in this way.
Make sure your business appears towards the top of online search results for potential customers. A responsive website, SEO, Google Ads, and social media marketing are all excellent resources that can help you outperform your rivals.
Even while most other companies need more capital to get off the ground than recruiting businesses need, you should still be aware of your available resources. Be deliberate and learn what it takes to operate an HR-related firm effectively, or you’ll start your company without the essential resources and in the dark.
Think about expenses for things like office supplies, technology, personnel, insurance, etc. Consider your financial situation, how much cash you have on hand, and whether you would be able to get a credit loan or government assistance.
You should investigate the market and the competition, and you should be familiar with the rules and laws that apply to your business. Without those details, you run the danger of unintentionally breaking the law or skipping important tasks. If you want to manage a successful recruitment agency, you must equip yourself with information and assemble the necessary staff to assist you in keeping up with the most recent regulations and policies. As a result, the majority of businesses rely on attorneys and counsel to handle legal matters.
However, as the owner of a recruitment business, you should always invest time in learning about pertinent rules and regulations to avoid future legal issues.
A recruitment business plan doesn’t have to be extremely complex. However, you do need a well-thought-out plan to help you lay a solid basis for development, minimize risk, and free up your time once you go live to focus on the fun part of billing instead of figuring things out as you go. By making the necessary preparations now, you’ll have fewer distractions during the truly enjoyable portion of earning money and be able to fully appreciate having the freedom to run your own business. We assure you it’s a great investment, and you’ll be happy you did when you take off at your new recruitment business.
Spend as much time going through some samples of service-related business plans as you can before you begin drafting your recruitment business plan.
There are some steps you need to follow while writing a recruitment business plan. Here are they:
An executive summary provides a broad overview of the company and all of its components. In many cases, writing it after you’ve created the other parts of a business plan might be advantageous.
What would you say if you were pitching your company to an investor? Keep in mind that banks and investors have likely heard thousands of other pitches before yours, so you must really stand out to get their attention. It will be worthwhile to put substantial thought and effort into the executive summary of your recruitment business plan UK.
Keep in mind that this is your chance to persuade investors of the legitimacy of your company. Keep your tone upbeat, concise, and understandable. Don’t get sucked into lengthy explanations or descriptions, and steer clear of technical jargon. Go and capture your investor’s mind.
Consider these facts when writing your executive summary:
You should thoroughly define the agency’s main services, activities, goals, and management style in this part so that readers may understand how the organization operates and how its management style supports those aims in this section of your recruitment business plan UK. You would also specify here who you wanted the clients of the recruitment business to be. Furthermore, you have the opportunity to adequately introduce yourself and your recruitment business in the company overview. You can provide more information about your strategies for guaranteeing the success of your recruitment agency to possible investors.
Also, keep in mind that the reasons investors should choose to invest in your recruitment agency and the reasons they should feel they will receive a return on their investment should be your main focus. However, you must demonstrate that you’re already in the recruitment sector. Tell them how much you understand the market, what changes you anticipate, and how your business is poised to succeed in the future.
Consider the following while writing your company overview, it will help you when writing a company overview:
This section of your recruitment business plan UK focuses on the management and staff members who would aid your organization in achieving its objectives. It also outlines their obligations. However, a company is only as good as the individuals running it. You’ll need the assistance of an excellent staff if you want to truly succeed with your recruitment firm. You should describe your management, personnel, and future growth plans in the area of your strategy devoted to management and important individuals.
It is also not necessary for this part to be overly lengthy or intricate. Investors only care that you have a strong management team and, where necessary, that you have strategies in place for future expansion. You’ll be alright as long as you’ve demonstrated this.
You can also include the following in this section to make it more attractive and catchy for your reader:
You must also consider your target audience and how you will stand out from the competitors in this part. In order for investors to understand your agency’s priorities, you should try to be as specific as you can with this. Potential investors could think you haven’t given it much thought if you are too unclear. Also, consider yourself to be your ideal client. What will persuade them to pick you over another recruitment agency?
Include the following in this section to give your reader a better understanding of what you are saying:
Imagine where your business will be in a month, six months, a year, and perhaps five years. But don’t lose your mind. Ambition is admirable, but you shouldn’t claim that your company will dominate its sector after a few years because that will make you appear foolish. However, both short-term and long-term objectives will be necessary for your recruitment firm. These goals should define for possible investors what you hope to accomplish over a specific period of time. To keep track of your objectives, you can also try to apply the S.M.A.R.T. (Specific, Measurable, Attainable, Relevant, Time-based) criteria.
You can also include the following to help you add more objectives:
The financial strategy, which outlines how you intend to fund the organization, is one of the most crucial components of your recruitment business plan UK. You can use it as a place to project how much money the agency will bring in . It may also take the greatest effort and time to complete this part of the recruitment business plan, but doing it right is crucial. You’ll need to demonstrate to potential investors how you’ll make back their investment. What is your potential profit per client? How many customers do you expect?
You need to also consider and budget for the following:
The following must also be added to your financial forecasting and financial projections to make your investors get a better understanding of your recruitment business plan in the UK:
It seems confusing, right? That’s why we’ve compiled a recruitment business plan for you to make it easier and stressless.
Be as transparent as possible about your financial situation. While writing your recruitment business plan, nothing should be kept from your investors. Do you already have existing financial support? Your investors will need to know how much start-up capital you have, and where it’s coming from. You need to let them know whether you’re using money from your own pocket, or whether you have investments from some other backer.
You must also be clear about how much cash you will require now and in the future. Investors should be informed about how the money will be used, whether it is for staff salaries, equipment purchases, or rental fees for space.
However, don’t ask for more than you need because doing so would likely be a turn for investors.
You can get funds through the following means:
By developing a thorough and understandable recruitment business plan, you’re giving yourself the best chance of success. As a result, you’ll be able to open your recruitment business with confidence. Investors adore comprehensive business plans, so keep in mind that the more specifics, the better. We’ve compiled a recruitment business plan just for you! With this, you can open your recruitment agency with confidence!
In the UK, companies that hire applicants from recruitment agencies pay the firms. Typically, the agency receives payment from the company in the form of a percentage of the starting compensation for the new hire
When hiring higher-paid employees, recruiting services may demand hefty fees. A recruitment agency will typically charge between 10 and 30 percent of the annual basic wage. The expected recruitment agency fees for base wages range from £20,000 to £100,000
Despite the fact that the sector is regulated, the majority of agencies don’t need a licence to operate, though there are a few exceptions. A licence from the Gangmaster and Labour Abuse Authority has required if an agency supplies workers to the agriculture, horticulture, or food processing/packaging industries.
Despite the fact that the sector is regulated, the majority of agencies don't need a licence to operate, though there are a few exceptions. A licence from the Gangmaster and Labour Abuse Authority has required if an agency supplies workers to the agriculture, horticulture, or food processing/packaging industries.
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Want to learn how to start an agency?
Whether it’s for content development, logo design, or other areas of digital marketing, starting a new agency is never easy. However, with the right steps and tools, you can get off the ground a lot faster!
To help you out, we’ll cover everything you need to know about starting your own agency in this article. We’ll also share a few helpful tips to find your first few clients!
What is an agency, how to start an agency in five steps, four tips to remember when running your own agency.
An agency is a company that provides specific services to other businesses. Most agencies either offer a single service or a variety of services, like:
Here’s a step-by-step guide on how to start an agency:
The first step in starting your agency is to determine your niche.
Identifying a niche helps you understand:
It’s best to choose a niche that you are familiar with. For example, if you’re well-versed with social media, you could start a social media marketing agency .
The benefits?
This is one of the most important business decisions you will make. It will determine your cost structure, your talent acquisition strategy and much more.
While some agencies find it easier on the pocket to have a completely remote team , others need to have a physical office.
Some advantages of going remote are:
Remote teams are a great alternative for small businesses and agencies. However, once they start to expand, most business owners feel the need for a physical office.
The decision ultimately depends on:
To know what works best for your agency, you could start with a full-time in-office team and let your employees work from home a few days a week. This way, you can find an arrangement that suits your needs.
Creative agencies like marketing agencies and digital agencies can have remote teams before they mostly cover online marketing. As everything is web-based, you don’t need to physically be present.
However, other agencies could struggle by going remote.
For example, real estate agencies can’t have agents working from home as they’ll have to visit properties to prospect them.
The next step to setting up a new business is to decide how you want to handle your billables. Here are some ways to do this:
This means offering your services at a monthly or yearly rate. This way, your client doesn’t have to pay you for hours worked or the number of projects you work on. All they have to do is pay a flat sum to avail your services.
The easiest way to determine a flat-rate for your services is to analyze client needs and the amount of work you’ll have to put in to get the job done.
However, this business plan might not work when clients decide to scale up. While you’ll be doing more work, you’ll still be paid the same! To avoid this, always revise contracts before you renew them. You can easily find an agency contract template online to get started.
Here, you only get paid after your clients make money off of a sale.
For example, if your SEO agency optimizes a client’s webpage, you can get a portion of the revenue they generate from that page.
However, this model comes with a few issues:
This business model is perfect for new businesses.
Here, you bill clients for the time you spent working on their projects at a fixed hourly rate.
While manually keeping track of the hours you spend on work can be taxing, you can use time trackers to help you out. As they automatically track the hours worked by your staff on each project, billing clients on an hourly basis becomes simple!
Employees are a crucial part of running any agency.
As you’re only starting out, it’s best to hire a small team of employees. This helps you complete client work without having to manage a large team.
Start by filling out the core jobs that every creative agency needs, like:
Once you have enough clients, you could hire more employees to grow your agency.
The next step is to find clients for your business.
But how do you find them?
Here’s how:
When you’re looking for clients, you’ll have to network extensively to find as many potential clients as possible. People need to know about you and your agency before they consider hiring you, right?
So how do you go about this?
A. Online networking
Start by creating a LinkedIn profile for your business. Describe the service you provide and mention any previous experience that you or your employees have in the field. Also ensure that your company has a website that clearly explains what you offer..
Be sure to add your company’s profile and website to all your online profiles and social media accounts and ask your employees to do the same.
Then, reach out to your current contacts – letting them know about your services. Since these people know you or may have worked with you before, they’ll be more willing to work with you.
B. Offline networking
Another great way to find clients is by physically going out and meeting people. A great way to do this is to get on Eventbrite or Meetup.com and attend relevant events happening around you.
These are forums where various startups and founders network and share business ideas, experiences and propositions. It’s a good way to build connections with people who can either:
Freelance marketplaces like Upwork and Freelancer are another simple way to find people in need of your services. Simply respond to job postings on these sites to find an opportunity for your agency and get to work!
While these marketplaces are great to find tons of work opportunities, they only work if you already have some prior work experience.
Remember, these are people who have never worked with you before – they’ll want some proof of work you’ve done in the past!
Once you have an existing client base, ask them to refer you to their networks.
This is one of the easiest ways to quickly find new clients as you’re not doing all the hard work of finding them yourself!
Also, as these are businesses that your clients already know, they’re probably more trustworthy and you won’t have any issues working with them.
Placing local ads on Google AdWords and Facebook can be a quick way to get leads who are looking to work with someone nearby. For example, you could target keywords like “ web designer in South London” in AdWords or target business owners in the south London area.
Start by budgeting a small amount of money and trying out different variations. If you start getting leads, you can increase your budget.
While starting an agency can be hard, with the right tools and processes, things get much simpler.
Here are four tips to help you run an agency easily:
Whether you run your agency remotely or from an office space, using the right workplace software can streamline your business operations to boost your profit margins.
Here are some tools that can help you out:
Effective communication is a crucial element in meeting client demands, analyzing work progress and collaborating on projects.
Luckily, messaging tools like Fleep and Slack let you instantly communicate with your employees. You can also share project updates and files to keep everyone on the same page.
Additionally, video calling tools like Zoom and Skype are perfect for detailed discussions for specific projects and weekly meetings. They also help with team-building activities to make any remote staff feel part of your agency.
As you could be working on multiple projects simultaneously, you need tools to help your employees collaborate on files and store them online.
File management tools like Google Drive and Dropbox let you store and share files and collaborate over them seamlessly. As these are cloud-based software, you can keep track of all your project files remotely.
One of the biggest problems faced by companies is maintaining employee productivity.
Without monitoring your employees, you won’t know:
Luckily, performance tracking tools like Time Doctor make employees monitoring a breeze.
Time Doctor is a powerful productivity software used by large companies and SMBs to monitor employee performance .
Here’s how it can help you manage your agency staff:
While getting new clients is important to scale your business, keeping your current ones happy is just as essential.
Happy clients turn into loyal clients and loyal clients can increase your agency’s cash flow and bottom line through additional projects.
Additionally, they can give client testimonials and refer you to their network, bringing in new business for your agency.
Once your business is up and running, you need to have efficient systems in place to manage processes.
For example, if you run an advertising agency (ad agency), your employees should know client preferences when it comes to their project deliverables. They should also know what the client doesn’t like, how to clarify doubts and how to present the final product.
And when you’re not wasting time and money on correcting repetitive activities, you can focus more on growing your agency!
Your best business asset is your employees, right?
If you keep them happy, they’ll be at their most productive and give your clients their best.
To keep your employees happy, you could:
Remember, the more appreciated your employees feel, the more productive they’re likely to be!
Starting your own business can be a lot of hard work.
But it’s not impossible.
Use the steps and tips we covered here to get started immediately. With the right strategy and processes in place, it won’t be long before you start your own successful agency!
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A poll has found Reform's Nigel Farage would be the favourite to take over as Tory leader if Rishi Sunak loses the election. Labour says the Conservatives are already battling over the succession. Earlier, the transport secretary denied that the PM's D-Day blunder had lost the election.
Saturday 8 June 2024 19:53, UK
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Question. If a prime minister is heckled at a rally and there's no backdrop scandal to imbue it with meaning, should it still end up on the news?
I ask because so often in election campaigns, individual and often innocuous events get sucked into the black hole of a political narrative and spat out as something very different and much more dangerous.
Exhibit A - the torrid two days Rishi Sunak has had after his early departure from the D-Day commemorations.
Such was the scale of this saga that even a solitary road sign in rural Gloucestershire was transformed into a symbol of the hapless Tory campaign stumbling from one PR disaster to another - simply because it read "Veterans Way" and happened to be next to a school the prime minister was visiting.
A GP with gripes about the widening of access to medical care topped off the party's hell day after she interrupted Mr Sunak at a rally in Wiltshire.
This was inevitably seen as another blow for the embattled campaign, despite the prime minister giving a fairly convincing defence of his policy.
You wonder how such a situation would have been received had it happened to Sir Keir Starmer - the drama potentially diluted by his huge lead in the polls and polished campaign machine.
None of this is to deny the importance of the D-Day story.
As one pollster put it, the debacle seemed almost "laser guided" to inflict the maximum amount of damage on a leader leaking votes to the right and facing frequent accusations of being out of touch.
That was certainly evident in Bishop Auckland on Saturday.
The Tories took this seat for the first time ever in 2019, but metres from a Conservative campaign stop one former candidate for the party told Sky News he could "never vote for that man" after events of the past two days.
"He's leading them off the cliff like rats following the Pied Piper," he said.
So how can Rishi Sunak change the weather?
Read Rob's full analysis below...
The polls are stubbornly refusing to move for the Conservatives.
Sky's latest average poll tracker shows Labour on 43.6% while the Conservatives trail on 22.8% - a commanding lead.
And - despite Rishi Sunak appealing to the right of his core vote with policies on immigration and national service, Nigel Farage's Reform party are nipping at the Tories' heels.
One YouGov poll this week showed the party on 17% - just two points behind the Conservatives on 19%.
Conservative peer and poll expert Lord Hayward has said the Tories have been "flatlining" in the polls.
"I think the polls have somewhat overestimated the Labour lead but it's still solid and it's still very substantial," he tells the Politics Hub.
He says Reform's position is "dangerous" to all other parties.
"What's interesting is that Reform, and other disruptor parties like the Greens, are taking away votes from the major parties," he adds.
"It will hit all parties, not just the Conservatives, and this what people have to be aware of nbecause voter loyalty is very low."
He adds that he believes his party's chances of achieving a majority is going to be "pretty difficult".
Ali Fortescue is joined now by our political correspondent Tamara Cohen , and the pair are discussing whether the Conservatives can dig themselves out of the hole they've found themselves in after a bad week.
Tamara says there is a lot of deep despair in the Tory ranks.
"Rishi Sunak refusing to speak to journalists today and just look at the seats that they're visiting. The prime minister in Bishop Auckland, where the Conservatives have an 8,000 majority," she says.
"Whereas Labour today is in Aldershot - a seat the Conservatives have held for 100 years.
"Next week we have the manifestos released. Is that a moment for Rishi Sunak to regain a bit of momentum?
"We've also got more debates including our election event and the Tories are chucking out a lot of ideas here."
Next up on the show is Labour's shadow treasury minister James Murray.
Ali begins by asking him about Labour's plan to overhaul the business rates system if it gets into power.
Mr Murray explains that his party wants to replace the current system with one that "rebalances the burden away from high streets and make sure that online giants pay their fair share".
"People want high streets to thrive... but at the moment they pay a disproportionate amount of tax through business rates," he adds.
He explains that bricks and mortar stores would be given extra support under a Labour government.
He reiterates Labour's pledge to not rejoin the single market, the customs union and it will not have the freedom on movement again.
But he says that the party wants to "reduce friction" with the European Union to improve the economy.
Business Minister Kevin Hollinrake is the first guest to appear on tonight's Politics Hub with Ali Fortescue.
He is asked about the Conservatives defenders seemingly missing in action, saying everybody's time in politics eventually comes to an end, and they have their own decisions to make.
Mr Hollinrake is among those standing again as an MP.
"Politics isn't the only thing to do in your life," he adds. "But there are some fantastic people coming through, and we have a fantastic leader in Rishi Sunak."
Ali pushes him on the criticism surrounding Sunak over his decision to leave D-Day commemorations early.
"He made a mistake, and he was of course in the commemorations in the UK and in the British commemorations in France," Mr Hollinrake says, adding that the PM has apologised.
He adds that only one person he has spoken to in his constituency have raised D-Day as an issue.
"I think it's time now to talk about other issues," he says.
Moving on now to the Ultra Low Emission Zone in London, he insists the Conservatives want to make sure the cost of moving to a cleaner environment is "sensible and proportionate".
Prime Minister Rishi Sunak has been trying to move on from anger over his decision to leave D-Day commemorations early – today he refused to speak to journalists.
Last night though, a cabinet minister speaking on live TV told the country his decision was "very wrong".
But where have all those who would be out defending the Conservatives got to?
Boris Johnson, long-time deputy Prime Minister Dominic Raab, Sajid Javid, Liz Truss, even Michael Gove, have all deserted the field.
None - apart from Liz Truss - are even standing at the election.
Here's our political correspondent Rob Powell's latest report from today's campaign trail...
In the last few moments, Rishi Sunak has posted on X about the release of four Israeli hostages in Gaza.
He said it was a "huge relief" to see them returned home after their "unimaginable ordeal".
"We will continue to strive towards an end to the fighting as well as safety and security for all," he added.
Earlier, Labour leader Sir Keir Starmer reposted a message from shadow foreign secretary David Lammy, which said the hostage's rescue was a "glimmer of hope in the darkness".
Tonight's show begins with a look at the rescue of four Israeli hostages from Hamas captivity in Gaza earlier today.
Israel's Prime Minister Benjamin Netanyahu said his forces had acted with "creativity and boldness" and they will not relent until all hostages have been returned home.
Palestinian President Mahmoud Abbas has accused Israeli forces of a "bloody massacre".
The Hamas-run government in the enclave has said at least 210 Palestinians were killed during the rescue mission.
You can read all the latest updates in our dedicated Israel-Hamas war blog below...
Our weeknight show Politics Hub With Ali Fortescue is live now on Sky News.
The fast-paced programme dissects the inner workings of Westminster, with interviews, insights, and analysis - bringing you, the audience, into the corridors of power.
Watch in the stream at the top of this page, and follow live updates here in the Politics Hub.
Watch Politics Hub from 7pm every night during the election campaign on Sky channel 501, Virgin channel 602, Freeview channel 233, on the Sky News website and app or on YouTube
Rishi Sunak has faced impromptu questioning over the state of the NHS for a second time in 24 hours.
The prime minister was on the campaign trail again today - but was not taking any questions from journalists as the row over his early departure from D-Day rumbles on.
He attended a fete in his own constituency, where he ended up being challenged over the state of the NHS.
This comes after he was challenged at a campaign rally on Friday over GPs (see here ).
Today, a woman who identified herself as a consultant called Chloe stopped the prime minister and asked him for "his plan for waiting lists" - and claimed the government had left the NHS "completely unprepared" for the pandemic.
The pair shook hands at the start of the encounter, and Mr Sunak moved on after around 30 seconds.
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Writing a staffing agency business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan: 1. Executive Summary. An executive summary is the first section of the business plan intended to provide an overview of the whole business plan. Generally, it is written after the whole ...
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A poll has found Reform's Nigel Farage would be the favourite to take over as Tory leader if Rishi Sunak loses the election. Labour says the Conservatives are already battling over the succession.