So, you have had an idea! An idea in it itself is a huge step forward on a long road full of challenges and excitement. Key to making your business successful is your ability to adapt to changing situations. To help navigate the changing marketplace as well as to mitigate some of the risks you need to plan out your business journey, and that starts with creating a business plan and strategy.  

A business plan is a dynamic blueprint of your business. It allows you to assess the feasibility of your idea before committing your time and money, it helps you plan out what and how you’re planning to achieve your goals, and it also helps you to secure funding from banks or potential investors, not to mention attract prospective partners.  

Your business plan should include the following: 

• Executive summary  

• Company description 

• Products and services 

• Market analysis 

• Sales and marketing 

• Financials 

Your business plan is your business roadmap, and as you progress so should your business plan – it must be a living and ever-evolving document that changes as your business grows.

You also should build a strategy plan, which shouldn’t be confused with a business plan. A strategy plan focuses on your mid-to- long-term goals and outlines the strategies for achieving them, it sets out your business priorities and the direction of where you want to take your business.  

Developing your strategic planning requires you to outline: 

• What is your current business positioning? 

• Where you want to take your business?  

• How are you going to get there? 

When creating your strategic plan you don’t need to do it alone – involve your business partner(s) or seek advice from a business mentor.  

Strategic planning is about effectively positioning yourself in the current marketplace, so you may want to consider: 

• Conducting a SWOT (strengths, weaknesses, opportunities, threats) analysis, or 

• Using PESTLE (political, economic, social, technological, legal, environmental) model, or  

• Trying the Competitive Forces Model (Poster’s 5 Forces). 

Use any framework (or a combination of) that is most suited for your purpose and needs.  

Both strategy and business planning are essential for your business to survive in the initial start-up phase, and to prepare you for sustainable growth. Honest assessments, realistic planning and ownership are key in helping you making informed decisions (and take safer risks) for your business. 

Discover the fundamentals of a recruitment journey with the Jump Advisory Group, from inception and initial set up to scaling and growth. Our experts share their key considerations to help set you off on the right path. 

What makes your business different?

Having a strong Unique Selling Point or Unique Selling Proposition (USP) can help you define your position and give you a competitive advantage in the marketplace. USPs let you focus your energy and resources on building solutions that create value for your clients and candidates which in return could lead to developing stronger rapport with your customers and affiliations with your brand.

When you design your services start by thinking about: 

• What job seniority and functions you’re specialising in supplying (executives, managers, office professionals, etc.) 

• What types of placements you’re making (permanent, temporary, fixed-term contract, etc.) 

• What sector(s) or industry you’re operating in (where is the most demand for skills now?) 
• What location(s) and region(s) you’re serving (local staff demand and supply etc.)

Now consider what can help you stand out in your marketplace:  

• Is it your pricing strategy? 

• Is it your service offering? 

• Is it your standby service?

• Is it your on-call service? 

• Is it experience in the sector? 

• Is it experience in the local area? 

• Is it experience nationally? 

• Do you have sector experienced professional individuals working for you? 

• Do you visit all of your clients’ premises or sites? 

• Do you introduce your contractors on their first day? 

• Do you offer on-site support to your client? 

• Do you offer local pay surveys to your clients? 

• Do you advise your clients what they should be paying? 

• Do you set SLA (service level agreements) up with your clients? 

• Do you survey your workers as to their placements? 

• Do you regularly conduct client reviews? 

• Are you a sector only specialist? 

• Are your operatives paid in the upper quartile for the skills they provide? 

• Do candidates regularly approach your organisation because of your reputation? 

• Do you operate any incentive schemes for your workers? 

• Do you take working references on your temporary workers /contractors? 

• Are you affiliated with a professional body that drives standards for your industry?

What sets you apart from the crowd? 

It’s possible that your prospective customers are having difficulties deciding which recruitment organisation to work with, so this is your opportunity to demonstrate that your company is worth their business. Your USPs should be obvious, value driven, and they should focus on providing a solution to your customers.  

To demonstrate your value and your USPs, you may want to consider adding additional services for your clients.

For example, for permanent candidates ask yourself the following questions that could lead you to a new solution that can be added to your portfolio of services: ​​​​​

• Do you offer career advice to your candidates? 

• Do you take a brief from your candidate as to what he/she is looking for from a recruiter? 

• Do you take a job brief from your client always including the MIT (most important thing)? 

• Do you ask for exclusivity from your candidates? 

• Do you ask for exclusivity from your clients? 
• Do you turn away permanent placements away if the client’s expectation is unreasonable? 
• Do you offer rebate‘s terms? 
• Do you provide an asset register (candidates) for your clients? 
• Do offer your clients retained business services 
• Do you offer your major clients reduced rates? 
• Do you get a declaration form for all your candidate so you can represent them? 
• Do you vary your terms to suit your client? 
• Do you outline your process to the client? (timelines, contact requirement, how long the process will take) 
• Do you have a charter for your candidates which you abide by?

In addition, being an REC Corporate Member demonstrates your adherence to the REC Code of Professional Practice which underlines the core principles and values that all recruiters should portray when operating a compliant, ethically and socially responsible business.

How you set up your recruitment business can affect what taxes you should be paying and other legal obligations that you and/or your business will bear.  

Depending on the type of business you will be running (be that a limited company, a sole trader or other) will determine what you need to do to set up your business and how you register it.  

When operating your business in the UK you may also be required to pay Corporation Tax which is calculated on your annual profits (similarly to income tax for individuals).  

Note: if you’re setting up as a Limited Company you MUST register with the Companies House. When registering with Companies House you can register for the Corporation Tax at the same time.  

VAT registration 

As a business, another consideration you need to make is whether over a 12-calendar month period your turnover exceeds (or you will expect it to exceed) the VAT registration threshold that is currently set at £85,000 in the UK. If yes, you are required by law to be VAT registered. Being VAT registered can also bring advantages to your business, from being able to reclaim VAT that you are being charged by other companies, to displaying your VAT registration number on your invoices or website, which can look appealing to your prospect clients.  

If your company becomes VAT registered, you will be required to maintain accurate records throughout the 12-calendar month period and report any VAT returns on a quarterly or monthly basis (different rules may apply to companies with higher turnovers).  

ICO number registration 

Another important thing to note is that under the Data Protection Regulations 2018 any entity that processes personal information will need to register with the ICO (the Information Commissioner's Office) and pay the data protection fees unless you may be exempt (you can check if your business may be exempt by completing the self-assessment). Be aware that organisations that don’t follow the rules and fail to pay their annual fees could be fined by the ICO; your organisation would also not be published on the Data protection public register which could cost you clients or suppliers, as many may not want to work with a non-compliant organisation.

Now you have started your business you need to determine the tools you're going to need to make it happen.   

Naturally, this may change based on any personal preferences or business niche, but here are some basic requirements you will need to consider for your business to trade:  

CRM  

No doubt you already understand the importance of your database and means of contact (for more information, read our article on CRM here). But when looking for your service provider there are two key things to note.   

1. Determine what you want from your CRM system, so you have an idea of any additional functionality before entering negotiations.  
2. Make sure the offering is scalable. Your CRM system should be able to grow and evolve as your business does.   

A phone system  

A large portion of our start-ups use a VoIP (Voice over Internet Protocol, i.e., using phone through the internet, like Skype or Teams) which can offer a more flexible alternative to a fixed line. There are a number of suppliers in this market - as always shop around for both price and service.   

Desktop, laptop or tablet  

While you know you will need a computer its worth considering what type works best for your business and your employees. Laptops and tablets are inherently more flexible, perfect for presenting to clients or making your office more agile. Although tablets may be restrictive in terms of functionality and processing for day-to-day work. Consider where you are likely to work - for example, whether you have a fixed address will indicate what will work best for you 

Premises, shared, serviced offices, or offices 

As a start-up the key is to keep overheads low, working from home or remotely is attractive for this reason - but a shared office space on a short-term contract may enable you to network without signing up to a long-term commitment.  Your working environment is important and one of the benefits of a serviced offices is you can switch off when you go home. Whatever you decide to do keep your work separate from your home life. 

Wherever you decide to work from be sure, to have a comfortable set-up. You'll be spending an inordinate amount of time in front of your screen, make sure your body is getting the support it needs (namely Lumbar support - which maintains the natural curvature of your back).   

Printer or scanner  

While going paperless is admirable and something we should all strive towards, there will be occasions when you'll need a printer or scanner. Whether that's to scan important documents for your records (like passports scan to prove Right to Work) or handouts to encourage notetaking during client presentations.  

Storage space  

While most of our work is stored electronically it might be an idea to have a small filing cabinet for sensitive documents like HMRC forms and VAT returns. 

Company administration is a key part of setting up your company as is compliance with the regulations. 

You must provide a registered office address when you set up a limited company. This is where all written communication must be sent. 

If you use a third-party agent to handle your mail, you must make sure that the service includes sending all your company’s mail to your registered office address. 

Companies registered in the UK needs to have a registered address. Your registered address is where you have all your official paperwork sent via the post, so it should be a permanent address that organisations such as Companies House and HMRC can send their letters and reminders to. 

The Registered Office Address must also be displayed on your company letterheads and invoices. 

Find out more about setting up a trading address on the government website.  

Whilst Croner understand and appreciate that your focus will be on making your business a success.

They outline what is important from the a HR perspective in terms of having the correct documentation

• Company Policies and the importance of making them very clear
• Contracts and SMT (Statement of main terms on day 1 of their employment)
• Make sure that you have the correct processes in place together with the documentation to back up these processes

Recruitment supply chains have become more complex in recent years. There has been an exponential growth in intermediaries sitting between the employment business and the temporary worker. These include umbrella companies, CIS intermediaries, personal service companies and others. The important thing to focus on is what they do and how they do it, rather on what they call themselves. It is also essential to do appropriate due diligence on all intermediaries you consider engaging with.  

An umbrella company is a company that employs temporary workers to carry out temporary assignments. The temporary workers regularly work through an agency for an end client. The temporary workers are typically paid PAYE as an employee of the umbrella company. 

If you are considering using an umbrella company our advice at the REC is to focus on compliance and check the models that your workers are working under to ensure that there are no disguised deductions or tax avoidance schemes. Under the Conduct Regulations 2003 a Key Information Document (KID) is required to be provided to all temporary workers and the umbrella should give the correct information to the agency on pay and deductions before the contract is agreed with the worker. 

REC has created a Key Information Document template that sets out essential information about the worker’s relationship with the umbrella company and your agency.  

Be aware, however, that umbrella companies are not regulated. In fact, they are treated as work seekers for the purposes of the Conduct Regulations. However, the government has decided as part of its Good Work Plan to regulate umbrella companies. When conducting your due diligence before engaging with an umbrella company, you should also consider if the umbrella company is FCSA accredited, as this can give you additional assurance that the entity that you’re engaging with is compliant and is adhering to the industry’s best practice.

REC’s team of recruitment law specialists have carefully created a comprehensive library of legal model documents and contract templates available exclusively to our Corporate Members. Access the latest legal resources here.. 

We provide expert support to better protect your business and to help you navigate the complexities of UK recruitment legislation and compliance.

In our digital world, having an online presence can have a huge impact on the success of your recruitment business.  

Some companies choose to not set up a website in the early stages of operating due to the challenges involved in SEO (Search Engine Optimisation), achieving a good search engine ranking and being unable to compete and rise above larger, more established organisations.  

However, having a website boosts your credibility as a legitimate business, and as a start-up first impressions matter. Simply focusing on cold calling or emailing prospects without a website could damage trust with your customers as well as undermine your brand.

A website is a tool that can help you generate organic traffic in a cost-effective way through optimising your job boards and capturing visitor information which can support the expansion of your customer pools. It becomes a valuable part of your lead funnel and an important part of your brand identity.  

Building a website can be inexpensive and as your business grows you can extend the functionality on your website. Simplicity is key – keep it clean, professional and easy to navigate.  

Investing in creating a website for your business will save you time, money and resources in the long run. The data you capture and analyse will help establish trends and patterns which can in turn inform your strategy and allow you to make more informed decisions to drive your business forward.

You are thinking about starting your own recruitment business in the UK, but you don’t know if the time is right or if the conditions are favourable. Let me start by saying that if you think like this, it will never be the right time to do it. To put this into a perspective, last year 1,843 companies were founded every day, that makes 77 start-ups every hour. SME businesses make up 99.9% of the total of 5.9 million companies in the UK (Office of National Statistics).  

The reality is that many of the new businesses will not make it through the first three years. Of all small businesses 80% will make it through their first year of operation and that number goes down in half over the next two years (40%).  

Looking at the data, there is usually more than one reason why this happens but according to research (CBInsights) the main reason (42%) is that there is no market need. Meaning that 2 in 5 cases start-ups fail to acknowledge the macro-economic conditions.  

Understanding the macro-economic context will provide you with a useful indication of labour market activity, which is a key part of understanding the demand for workers, as well as how organisation plan to retain and develop their staff. Being aware of these interrelated factors and developments will allow you to adapt to changes with greater agility.  

Finding the right information and monitoring development within the labour market and the economy will be key if you want to increase your chance of success. The official statistics in the UK are mostly published by the Office of National Statistics (ONS) but you should remember that most of them are backwords-looking, indicating past performance. Other reputable sources included the Confederation of British Industry (CBI), the British Chamber of Commerce (BCC) – look for a local chamber of commerce as they could provide you with a more targeted insight to your specific geography. The most influential forecasts that accompanies the government’s annual Budget are the Bank or England Monetary Policy Report, and the Office for Budget Responsibility’s Economic and Fiscal Outlook. 

These all present you with great opportunity to understand the economic outlook within the UK. To succeed as a recruitment business, the Recruitment and Employment Confederation (REC) offers an unparallel support and resources to all our 3,200 members, or 80% of the UK’s £38.9 billion industry by turnover, and 11,500 individual recruiters. 

The REC’s research is a renowned source of labour market intelligence used by recruitment businesses, Government, and other organisations across the UK. Alongside our partners, we produce three pieces of research on a monthly basis: 

• KPMG and REC UK Reports on Jobs – surveys 400 recruitment businesses on what has happened in the month just gone and is therefore used as a lead indicator on the labour market activity, demand and worker availability. 

• JobsOutlook – our monthly research into employers and their perception of the economic outlook and their hiring intentions. 

• Jobs Recovery Tracker - monitors job postings and provides valuable insight into demand for workers in across the UK.