Every year an increasing number of recruitment professionals taking the leap to go it alone and start a recruitment company. Companies House data reveals that 8,456 new agencies launched in 2019 alone.
Although there are no official statistics on how many recruitment agency start-ups fail, it is estimated that 60% of all business start-ups fail in their first two years.
It’s vital to know what the pitfalls are of running your own recruitment agency and how to avoid them. We know exactly what it takes to set up a brand-new recruitment business and how to support you every step of the way. Let’s look at why some recruitment start-ups fail, how you can avoid them and how WeDo can help you to make yours a success.
Cash Flow Issues
Cash flow is an issue for many start-up recruitment agencies. There are set up costs and bills to pay before your business can cover them. Plus, if you’re in contract/temp recruitment, you will have wages to pay long before your clients pay the invoice.
This is where funding options are to be explored and one way to improve your cash flow is through an invoice finance facility.
Invoice finance (also known as invoice factoring) is a way for a business to release money against the amounts due from your clients. It’s a great way to improve your business cashflow and working capital and is a great alternative to loans and fixed borrowing.
It’s a flexible option that can grow and change to meet your business needs.
Invoice finance helps businesses to reinvest in operations and growth earlier than they could if they had to wait until their customers paid their balances in full.
Back-office Headaches
Between Brexit and the pandemic, recruiters have had a tough couple of years. The job is difficult and time-consuming – there’s so much to consider from right to work checks, to legislation, IR35, managing payroll and more.
Whether you are a one-man-band agency or just a small team, these routine tasks take you and your employees away from what you do best – recruiting. So, to stop these issues giving you sleepless nights, why not outsource all your back-office duties to WeDo!
Inadequate Systems
When setting up any business, it’s important to have the right tools and systems in place. Recruitment agencies are no exception – with systems required for applicant tracking, CRMs, talent sourcing, HR, candidate screening and engagement, it can get overwhelming.
That’s why WeDo offer market leading recruitment software and funding from our experts with many years’ experience in recruitment services.
These are just a couple examples of the support we provide to recruiters. Following this link to find out more.
WeDo want your business to succeed, sometimes businesses need a little help, sometimes they need a lot. Whatever your needs, WeDo have a solution to fit.
