How to Open a Recruitment Agency — Ultimate guide

Craft Your Business Plan

There are steps that you will need to take in order to successfully own and operate a recruitment agency. Considering the recent market trends and the push toward virtual employment (WFH, or Working From Home, as it is known in some circles), you will have to get acclimated to what type of work is available to your future customers. It is always recommended that you consult with a business attorney before starting this process.

A business plan is necessary no matter what field you are in, and no matter if this is your first business or your twenty-first business. Everything that you venture into requires some pre-planning so that you can preempt any hiccups or obstacles along the way.

The main components of a business plan include:

• Executive Summary. Here is where you detail what your recruitment agency is all about and what your primary goals are. It’s essentially a declaration of who you are, what you will provide to your clients, and how you will go about doing that. In order to get any type of help from the bank — such as a small business loan — you are going to need a business plan, so use this section as a quick way to present the overview of your company. Discuss here what services you are going to offer as well as any short-term and long-term goals you have.
• Market Analysis. In this section, you will put forth the research you’ve done on your target market as well as the competition for your area. Is the area saturated with this type of industry? What are the unemployment numbers and metrics in your area? Are people hiring, or does everything seem to be at a standstill? All of these components should be answered as you set forth to grow your business.
• Marketing Plan. You might be the most prepared person in the world, your designs might be flawless and eye-catching, but you are nothing without a steady client base! Your business plan will have to address how you plan on reaching your clientele and what you are going to do to get your name out there. In the United States alone, there are more than 20,000 recruitment agencies and they are certainly all competing for attention from your future clients. Marketing yourself the right way will ensure that people come to you.
• Financial Projections. There will be start-up costs and revolving expenses associated with getting your agency off the ground. You will have to look into the costs that come with renting or purchasing an office space, computers and other office equipment, marketing materials, salaries for your employees, licensing and permits, and more. Be sure to take a good look at this list to determine how much you can scale out and over how much time.

Register Your Business Entity

Once you have crafted your business plan, you will have to decide how you want to register your business. There are a variety of classifications when it comes to this process, known as business entities. These business entities include:

• Sole proprietorship
• Partnership
• Limited Liability Company, or LLC
• Corporation

First, you should choose a name for your business that you will register as your official business name. Be sure to check with your state and the federal registry to make yourself aware of other agency names so as not to either duplicate or have a name that sounds too similar to someone else. One of the best elements to consider is how easy it will be to remember your agency name. That way, your customers can more easily recommend you to a friend or an acquaintance.

Second, decide what kind of an entity you’d like to register as. Recall that an LLC, or a Limited Liability Company, is an entity which protects you as the individual. Should your agency be sued, your personal assets would be protected.

Third, register for all of the necessary taxes. You can do this easily by first applying for an EIN, or an Employer Identification Number through the IRS website. Then, be sure to register for the required state and federal taxes.

Finally, be sure to secure all of the necessary business licenses that come with starting your own business. Check with your local government to determine what kinds of permits and licensing you will need. To help you navigate this journey, it is always recommended that you consult a business attorney.

Find your Space

Renting an office space for your agency might not be that difficult; what is more important is determining the location in which you want to set up. This is again where your research will come into play regarding the unemployment numbers. In an area where companies are not hiring and/or where people are simply not looking, you will more than likely not have the clientele necessary to maintain stability. It is important to localize your search to towns and cities in which there is a good balance of job openings and people who are looking to work.

The interior of your recruitment agency should be clean, neat, and professional. Clients will want to walk into an office that matches their desired professionalism, so welcoming them to a space that is organized and hums with activity will make them feel inspired.

When considering the layout, be sure to have a waiting area, rooms for interviews, and spaces — such as cubicles or office rooms — for your employees to work. Since you will need to invest in all of the equipment that comes with an office — desks, chairs, computers, decor, and more — your office should be big enough to accommodate whatever it is you need.

You will also need a bathroom and a break room or even a kitchenette area for your employees.

Hire Your Staff

There will be a multitude of positions you will need to fill, so start the hiring process. Develop a job application, figure out the kind of employee you want for each position, and then begin your search. Keep in mind you might have to conduct the interviews yourself, but that means you will know exactly who is coming into your agency.

Due to the nature of the job, your employees will have to have the following knowledge and characteristics:

• Working knowledge of computers
• Resume and cover letter writing
• Good editing and proofreading skills
• Interview skills
• Good communication skills
• A sympathetic ear to listen to the people who are coming into the agency looking for work
• Patience

For some, finding the right job can feel like a daunting task. They will not want to be rushed or made to feel like no one is listening to them. Above all, they are looking for help. It is the responsibility of your staff to treat potential clients with respect and patience as you all navigate the job market.

Find Companies and Get Contracts

Staffing agencies would be nothing without the relationships they form with companies. In order to have an actual destination for your future clients, you are going to have to forge connections and sign contracts with employers. This acts as the agreement you have between your agency and those companies that you will provide them with reputable employees.

While your clients will rely on you to help them find a job, the businesses with whom you draft a contract will be relying on you for employees. Your staff will have to take care of the entire process, from interviews to resume review to background checks. In doing this, you will establish that your word is good and that you are trustworthy. Once your name gets out there and you get a few referrals under your belt, you can begin to pursue even more contracts with other businesses.

Market Yourself

One of the best things you can do for yourself is to invest in a professional website that lists your services. Let your clients know exactly who you are and what you offer by way of services. It is important that your website feature an About Us page, an option for people to fill out an application and upload their resumes (as well as any other necessary documentation, such as a cover letter and reference letters, if needed), and even a portal for them to search jobs within their skills range. You are not taking away work from your employees by doing this. Instead, you are merely streamlining the process.

Consider using social media as another way to get your name out there. Facebook ads, LinkedIn, and job based sites like Indeed.com are all great avenues to pursue in promoting your agency.