When starting out, securing enough funding, whether its self-funded, a bank loan, or invoice financing, is crucial for temporary recruitment agencies. Especially when payroll commitments dictate they pay recruitment staff before clients have paid their invoices. All in all, this has a huge impact on cashflow, the lifeblood of any business.
Remember there’s no ‘right’ way of funding your recruitment start up agency, you just need to find one that is the right solution for you. As well, the funder/funding arrangement you go with when you first start out won’t necessarily be the right one a few years down the line either. The more you grow, the more workers you’ll be supplying, and naturally all those workers need paying on time every week – can you be certain that your funds will be available when you need them?
As an agency, your provider should have your best interests at heart and provide you with the necessary processes and confidence that you will have funds in place exactly when you need them. A specialist provider should have extensive knowledge of the industry and provide you with 100% of gross profit each week.
Use the right software
Recruiters often find themselves trawling through piles of CVs and applications to find the perfect candidate. This can be manageable up to a point, but when growing your business, naturally you want to take on more placements, yet don’t want the paperwork and admin time to grow with it.
By reducing your tedious admin tasks and providing automation, the right software can save you time and money week by week - all while helping you keep compliant. When choosing a system built for recruiters in mind, you’ll likely be working with a provider that understands the industry and should work with you to make sure its right for your business needs. Sometimes less is more, there’s no point paying for fancy features that you don’t want or need.
Similarly to the above, outsourcing some of your work process, such as using a 3rd party payroll provider, can further reduce your admin, giving you back more time to focus on the core of your business – i.e. winning new clients and filling more placements.
Overtime this can save you money, as it means you don’t have to pay for and maintain a subscription to a payroll software platform, you don’t have to put time/money aside to pay for in-house training for existing staff or need to hire a payroll specialist to join your team.
Some 3rd party companies may also offer software/payroll packages, giving you even more automation and less admin challenges. Your payroll data would get fed out of the software straight to the payroll provider meaning you don’t need to copy and manually send across your weekly data, reducing your margin for human error and ensuring your workers are paid on time, every time.
Avoid bad debt
In the early stages of starting-up a recruitment agency, having good, well managed finance can be key to the success of the business and shapes how you grow, especially as the sector is hugely demanding of good cash flow. Therefore, having a reliable financer and understanding debt management long-term is just as crucial as the upfront investment.
You can help safeguard your agency by performing a credit check on all customers before you start supplying them, reduce your aged debt, have your invoices paid promptly, and choose the right financer for your business’s needs.
Issues can arise if your end client pays late, goes into insolvency, or perhaps you didn’t vet the client enough before you supplied to them. So, it’s very important to check over the client before you agree to do any business with them and have the funds available to cover any late payments.
Sticking to one industry, staying too niche, or offering just perm or contract placements, can stunt your recruitment agencies growth if you avoid any opportunities that could come your way. If you are an industrial/driving agency, you most likely won’t leap into the healthcare industry headfirst, but a step into the manufacturing/warehouse market might feel more familiar and be easier to facilitate.
Joining recruiter lead professional groups on LinkedIn can help expand upon your current knowledge, by allowing you to speak to and see the posts of likeminded individuals often in a different sector. Usually full of advice and people searching for it as such, you may pick up on a thing or two you didn’t know or perhaps never thought of.
Another good source are recruiting boards like the REC (Recruitment & Employment Confederation) and news outlets like Recruiter magazine. These are great resources for the latest news, advice, and events etc. Provided you have the time, going to some expos and networking events are another way to meet people in your industry whether they are fellow recruiters or industry suppliers.
If you would like to learn more about how Flo can help grow your temporary recruitment business, you can contact us on 01827 438065 or email@example.com
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