Operations: Reed Franchise Partnerships’ 11-step guide to starting your recruitment business 

Starting a company from the ground up is no easy feat. It takes a lot of time, planning and effort. In this blog, we explore 11 areas business leaders should focus on when building a recruitment business, and how Reed can support you.  

Reed Franchise Partnerships is dedicated to supporting business leaders in starting their own recruitment companies. With over 60 years’ experience, Reed knows how to build a strong recruitment business and we are best placed to help you.  

Key considerations to make when starting a business include:  

Identifying your purpose 

To borrow a phrase from author Simon Sinek: “Start with why”. Before taking this path, you should identify the real purpose. While it is highly likely that financial reward forms part of the reason for setting up your own business, it is helpful to think of money as an enabler rather than an end goal. Deeply consider whether your aim is to do social good, create a legacy for your family, to enjoy a long and comfortable retirement, or anything else. 

We can help you discover what you most want from your business, identifying your driving motivators to help you meet your goals. 

Having an end goal in mind 

One of the first things to consider before you begin is your eventual exit from the business. We can offer advice and counsel as you assess your options. Once your goal is clear, we can help you reach it. 

Consider how your exit strategy corresponds with the type of business you want. Solopreneurs are unlikely to exit with a trade sale, for example. To do this, you would need to considerably scale up your business. If you’re building a small team, you might exit with some kind of management buyout. It is vital to realistically appraise your skills, the business you want, and how you want to exit. 

Choosing your market 

Start with what you know. If you are already in recruitment, you may choose to focus on a market in which you are already recruiting or have previous experience or knowledge. If you are new to recruitment, in most cases, we’d strongly recommend operating in a sector in which you have previous experience.  

We can help you analyse your market with free access to tools like LinkedIn Talent Insights to help you drill down on the data as you assess a market. We can also advise against common mistakes, such as launching into an already-saturated market, where a tight niche might suit your company better. 

Building your database 

You may want to focus on the more creative aspects such as branding and websites, but choosing a market is one of the most important decisions to make in order to build a strong client database – and this should comprise at least 250 decision-makers across 200 companies. Always keep in mind that any data-gathering and storage must comply with GDPR regulations.  

The next step is to select and pay for a customer relationship management (CRM) system and finally upload the data. Launching with a strong database is critical to success. 

Our franchisees get as many licences as they need for their own private database on our proprietary CRM system, X3, at no additional cost. And we can automatically load data onto X3 from Excel spreadsheets.  

Branding your business 

Building a brand is harder than it looks. It requires choosing a name that is both timeless, suitable, and available to use in your jurisdiction. You’ll also need to decide if you need trademark protection. After that comes the fun, creative part: designing a logo, and creating marketing materials.  

Our franchise partners trade and brand as Reed (or dual branding in the USA) – a recruitment brand with over 60 years of experience and credibility, already equipped with trademark protection. Reed partners also receive a turnkey solution to a powerful brand, supported by a strong team of marketing professionals & a plethora of marketing resources. 

Incorporation and licensing 

Options for the type of legal status your company takes will vary from country to country or state to state. We can advise on the options you have in each country. 

Our advice would be to go for the equivalent of LLC status in the USA. Some countries (e.g., Switzerland and Singapore) may require you to become licensed in order to recruit, but if it’s not a legal requirement, we’d question the value of spending vital start-up capital on professional memberships. 

Financial considerations

The time it takes for you to receive your first payment depends on the effectiveness of your launch and the client relationships you have on day one.  

Before the first payment hits your account, you will need enough to fund your business and lifestyle. We recommend at least four months’ financial cover in the USA, where notice periods are typically very short, and six months’ elsewhere. 

When choosing a bank, it’s worth looking at some of the newer challenger banks, many of which are a bit more dexterous with lower banking charges. Shop around for the best deals for new business accounts. 

Banking is relatively straightforward unless you plan to manage temporary employees and contractors – at which point things become considerably riskier and more complicated. It will be worth considering recruitment payroll and finance specialists if you are doing this. Insurance is also going to become more complex, and expensive in this case.  

Even if you only hire employees directly, on a permanent basis, you’ll still need to ensure you have sufficient insurance in place. 

Finally, you’ll need an accountant to prepare any year-end accounts you have to submit. In your early years, you’ll probably be well-served by a small local firm – choose one with experience of recruitment/service industries, if possible. That said, reporting requirements may be light if you are a small business in your early years, so it’s worth looking at low-cost, digital-led providers. 

Reed can have a significant positive impact on your cash flow as you launch, and save you considerable sums when you are starting out. We provide a website, a CRM system, discounted LinkedIn licences (payable in arrears), training, an MS365 suite of products and marketing collateral.  

Learn more about financial considerations when starting your recruitment business.

Office space set-up 

The need for office space will depend on whether you launch with a team in place or if you plan to start out on your own and then build up. If it’s the latter and working from home suits you, we recommend keeping your costs low and working from home as long as you have a quiet space with good internet connection. It may be worth taking a virtual office address to lend an air of added professionalism.  

Consider the plethora of flexible shared workspace options now available when you do need office space – just watch the hidden charges (e.g., telephony) and avoid committing to a long-term, inflexible lease. Once you reach a headcount of five or more, it may be time to consider a more traditional office rental model. 

IT infrastructure  

Setting up your IT infrastructure is easy when you are a solopreneur, but you’ll need an integrated network if you’re building a team.  

Our partners and their teams each have access to Reed’s Digital Workplace, allowing you to work remotely and flexibly. It also gives you full access to a comprehensive suite of MS products, including MS Teams. In short – we provide your IT infrastructure at no additional cost. 

The legal set-up 

Obviously, you are going to need terms of business which protect you and clarify all eventualities with your client. Most recruiters can get these with relative ease, but what if you are new to recruitment? 

What is less obvious are the demands increasingly made by sophisticated clients for things such as your Anti Bribery Policy, or your Data and Privacy Policy. We are increasingly seeing requests for these being made when tendering for business.  

Then there’s all the data protection/privacy angles which need to be covered on a website.  Even if sourced online, you would be well advised to instruct a lawyer to check your versions are compliant with local regulations. 

When choosing a lawyer, look for a small-to-medium-sized commercial firm that can handle commercial contracts, commercial disputes and employment law. 

We provide our partners with terms of business, compliant with local law. We also have a comprehensive collection of professionally produced and well-presented policy documents covering most eventualities. 

 Your online and digital set-up 

Lastly, all modern recruitment firms need a strong online presence, including a search-engine optimised website capable of integrating with your CRM system, for efficient job posting and applicant tracking.  

Your business will also need high-quality, branded social media images and marketing collateral to help you keep pace online.  

For each country in which we recruit, Reed has a state-of-the-art recruitment website with all the above and provides its own marketing materials to partners.  

A good modern recruitment website is search-engine optimised and optimised for ‘job scraping’ (by which method aggregators can ‘scrape’ your postings for extra exposure at no additional cost to you).  

And while AI may be able to help create content, our websites are full of original, keyword-rich content, written by a real team of talented writers with Reed’s clients and candidates in mind.  

Find out more about Reed Franchise Partnerships and start your own recruitment company today.