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Many successful recruiters will at some point, or another have considered setting up their own recruitment business and many factors may be holding them back.

Here are a few key reasons that stop people from going out on their own and how these can also be addressed.

Finances – I don’t have the funds to start my own business

This is one of the biggest fears I hear from recruiters when speaking with them about setting up and it’s perfectly understandable. You go from the security of a monthly basic salary plus commission to starting from zero where it could be a few months before able to draw down any money from the business plus any overheads from a start-up perspective.

So, what’s the solution?

Well, the answer to this is also dependent on what type of recruitment business you have and your financial circumstances.

For example, do you have any savings? How much do you need per month to cover the bills etc? Are you a temp or perm agency? What tools do you require (CRM, Jobs Boards, etc.)?

All of this can seem very overwhelming but the best thing to do would be to put together a first-year forecast to consider how quickly you can start generating revenue, what your overheads will be, and then you can analyse how long the shortfall would be and how much you would need to see you through that initial period.

A handy tip would be to also consider client payment terms as this will consider when the funds are in your business account.

Many recruiters will not necessarily have projected a forecast before or a business plan and that’s perfectly understandable. There are useful tools to help you with that and experts that can help break these figures down for you.

Running the Business

Recruiters are good at recruiting, simple as that. The likelihood is they don’t have much experience in running a business, back-office functions including Accounts and Payroll, Creative and Technical including Branding, Tech, and Marketing, and Legal and Compliance knowledge to name but a few.

The key to this is to focus on what you’re best at…. recruitment.

The biggest frustration current recruitment business owners report is the amount of their time that is taken up by non-recruitment activities affecting the time they can bill.

The solution?

Ensure you are supported by experts within their fields to help support you and your business. If you focus too much on saving costs by running it all yourself then it will be much harder to deliver the results to effectively make your business a success.

A handy tip would be to look at freeing up your time as much as possible without having to deal with too many 3rd party suppliers so if you can source an all-in-one support service this will typically allow you to bill more which is the goal!


“Is there ever a right time to launch your own recruitment business?”

Probably not!

There will always be something that can hold you back and there does have to be a certain element of taking the leap of faith. But how can you ensure you are planning as best as possible? Well, once again, this will come down to your circumstances, e.g., are you planning on buying your first house, or are you just about to start a family?

If either of these is the case, then you may want to plan in accordance.

Other things to consider though will be your sector and market. When is the peak season for you as this can help you hit the ground running when launching your business?

A useful tip here is to not launch at the peak of the market as you will be behind your market competition. It’s a good idea to get going perhaps the month before to be in the right position to service the peak time, e.g., education recruiters may look at the start of the school terms to launch but it may be more beneficial to be up and running at the end of the last term.

In summary, every current recruitment business owner will have had the same or similar fears before going it alone, it’s perfectly normal and you’re not alone.

The key is to prepare in the best way possible, seek the correct advice, and don’t be afraid to ask as many questions as possible.

For every reason not to set up your own recruitment business there are a hundred more reasons to go for it!

Why not download our definitive guide to starting your own recruitment business on 2023. It has great advice from forming your company to the next steps in setting up and becoming established, providing brief overviews of areas such as finance, marketing and creating a business plan. If you would prefer to chat to someone from the SSG team, please click below.

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