Recruitment agency jobs costs

In particular, when I set up 7 years ago, my own estimation of recruitment agency costs was too light, despite advice to over estimate costs and under estimate income when planning I still got this wrong.

Here's my lists of costs you will need to consider if you are planning to start your own recruitment agency.

• Premises. A recruitment agency run from your bedroom won't last for long, if you are to survive you'll at least need administrative support and an office to house this. It's not just rental, there's gas, electric and your local area taxes. You'll be running computes all day, and heating all day in the winter, so your home bill will not give you an accurate idea to predict.

• Phone bills. A recruitment agency should have a huge phone bill. You will be using phones all day long, with many calls to mobiles. Shop around and maybe consider Voip to bring your costs down.

• Mobile bills. It's 'your' business now, you'll rarely be able to turn this off, holidays abroad included. Mobile bills for company directors can be high, running a recruitment agency in particular, you'll always be 'at work'.

• Fuel and transport. You may be tempted to try and do it all on the phone, but your quality will suffer and you may not make placements as a result. Build in proper estimates here to allow regular trips out interviewing.

• IT costs. In a a recruitment agency today, you have to keep up with technology to succeed. This means computers with broadband connections, websites with hosting costs, domain and e-mail hosting costs. Software licenses such as internet security, spam filtering.

• Recruitment database. Most professional recruitment agency software firms work on a licensing basis with monthly costs. You may choose to DIY, but only do this if you are technically able, otherwise you will loose out to a recruitment agency with slick recruitment software...good software will make make you money.

• Postage and stationary. Even with e-mail it's surprising how this mounts up, paper , ink cartridges, stamps, folders, staples, paper clips, pens (most have legs!)

• Accountancy. Many try doing it themselves, but my advice is don't, you'll make mistakes and end up spending no time doing recruitment. The cost will always be less than the time you have saved, let alone the potential damage that can occur if you get it wrong.

• Insurance. You'll need to ensure your recruitment agency for office contents, computers etc, and indeed any people you have working for you (public liability). You can get a business insurance to cover all bases.

• Misc. Budget for unseen extras each month, an unexpected lunch meeting with a client...a computer that collapses due to a virus etc, you'll not know what they are in advance, but the will happen, regularly.

• Loans. Obviously if you've borrowed money to set up your recruitment agency, you need to add this in to your monthly costs

• Salary. Set up with enough money to pay yourself a proper salary. Otherwise you are putting yourself under unreasonable pressure to deliver and reducing your chances of success.

In summary, when setting up a recruitment agency, many have a natural tendency to keep costs down. However, in my experience, those who fail, do so not due to lack of ability, but lack of funds to do it properly, and this can be exaggerated if one has underestimated in the first place. If you are confident that you have what it takes to run a recruitment agency, do it properly and borrow more than you need, provided you're as good as you think, you'll get it back in time.