How to Start a Recruitment Business (2023)

Setting up a recruitment business can bring you freedom, flexibility and the chance to get paid to do what you love. But how do you get started? Follow the Recruitment Entrepreneur guide to success.

Taking the first steps on your journey to setting up a recruitment business is exhilarating, but also daunting. It’s a competitive industry and you need to be able to fight for clients, candidates and recruiters for your team. But when you get it right, you’ll experience a feeling of freedom like no other. More and more recruitment professionals are realizing that there is a huge potential for individual and agency growth.

With a swelling market and increasing corporate and client demand, you need to identify how to start a recruitment business that will stand tall for years to come. In this guide, Recruitment Entrepreneur identifies how to stand out in a competitive landscape, how to source recruitment business funding for a successful start-up, and how to launch a recruitment business.

In this guide we’ll look at the following:

  • Writing a recruitment business plan
  • Start-up costs
  • Identifying your niche
  • Marketing and branding
  • Business support infrastructure

Creating your own recruitment business plan

When you set up your recruitment business, it’s essential to have a clear strategy and recruitment business plan. You should plan each quarter, managing cash requirements and setting realistic targets and goals. Having a clear road map ahead will help you keep on track and see the forest for the trees. Your business plan will also help you win investment funding.

What to include when writing a recruitment business plan

  • Personal profile – What makes you a good recruiter and a good businessperson? Why do you want to launch a recruitment business? Lay out your experience, contacts, qualifications and other personal qualities, as these will provide the insight into you as a person that potential business partners and investors will be keen to see.
  • Business profile – Set out the sectors your business will specialize in and why, what types of clients and candidates you are looking to work with, and the demographic you will target. Are you going to work alone or with a partner? Will you build a team? You should also specify how you will source recruitment business funding
  • Market research – Discuss your target market, competitors, the challenges you will face and how you will overcome them. How do you plan to attract new clients and candidates? Is there a geographic area you will focus on? Think ahead and prepare for every business eventuality to show that you are invested in making your business a success.
  • Business costs and forecasts – Outline all the business costs you expect to incur, from marketing to renting office space and business insurance to take-home salaries and commission for you and your team. Include profit projections for Year 1, Year 2, and beyond.

Writing a detailed recruitment business plan should be the first thing you think of when looking to seriously launch a recruitment business, so it’s important you take your time on this.

Recruitment business start-up costs

When thinking about how to launch a recruitment agency successfully, the first thing on your mind may be recruitment business funding. How are you going to get the money to get your business off the ground?

Costs to consider for the business

  • Marketing – You’re going to need to design yourself or pay for the development of a website, a domain name, and site hosting to create your own digital calling card. Organic social media marketing is free, but if you’re considering paid advertising online then this should fall under your marketing budget.
  • Memberships – If you’re joining premium job boards, CV databases, and recruitment portals, factor in the monthly and annual cost spent on these memberships. A prime example of professional-level access to these portals is your LinkedIn Recruiter License.
  • Office space – This is easy if you’re going to be working from a home office, but if you have a team or plan on renting office space, then this should also be factored into your recruitment business costs.
  • Insurance – It’s vital you acquire business and employers’ insurance to ensure you’re compliant with all governing bodies. You can incur fines if you try to fly under the radar, so factor this into your business costs too.

Then, of course, comes to the costs to consider for if and when you take on a team and scale your business.

Costs to consider for your team

  • Salaries – If you’re starting out with a few team members or plan on scaling up in the near future, you need to decide on starting salaries and factor these into your costs. The same can be applied to commission schemes, too.
  • Holiday pay, sick pay, and benefits – When planning on incorporating staff benefits into the business, this needs to be calculated, as do employer obligations like holiday pay and sick pay.

Understanding your costs and sourcing the funding forms a healthy portion of the successful launch of a new business, especially in recruitment. By seeing the bigger picture of where your money will feed into the different arms of your business setup, you can move forwards on solid ground.

Discuss your recruitment business funding options

You can talk to your team or your business partner about how to finance the business and launch a recruitment agency. However, if it’s just you, you may want to seek out a recruitment mentor to discuss financing options.

At Recruitment Entrepreneur, we’re one of the most successful private equity investors in start-up and scaling recruitment businesses.Since 2014, we've invested in more than 32 talented founders, enabling them to launch and scale successfully. Our results lie in our ability to provide not just knowledge, but also know-how. Our portfolio of clients is ever-expanding and we provide mentorship for ambitious entrepreneurs seeking to build their name and brand.

Identify your recruitment business niche

You can’t be all things to all people. You need to find a niche – an area of recruitment that you will operate in. Identifying your recruitment niche will help you narrow down your target clients and candidates, increasing the chances of both establishing your brand name in a competitive arena and becoming a chosen supplier.

Utilize your specialist area to your advantage. If you’re setting up a recruitment agency after working in a previous industry role, take the experience of the client base with you to inform your niche. Use industry or sector you excelled and placed multiple candidates in.

If you’re setting up a recruitment agency and coming from a non-recruitment background, then use your experience in previous job roles and your own professional interests to capitalize on potential gaps in the market. Use your inside knowledge and understanding of the challenges of the sector to your advantage.

For example, Baldwin Boyes achieved success by partnering with Recruitment Entrepreneur and focussing their business model around recruitment for Board, Executive, and Leadership level roles for legal firms. By capitalizing on their own experience in the Legal recruitment sector, they have seen enviable growth.

Recruitment marketing and agency branding

This is the fun part of setting up a recruitment agency – creating your branding! You need to create a solid brand to be able to stand out from the crowd. Here are some of the things you’ll need to consider. Remember to give it a bit of the personal touch:

Your business’ logo needs to communicate who you are visually, which can be tricky. It will set the character of your business, your brand’s tone of voice, and become the emblem you’re recognized for. Through competitor research and your own intuition, creating a logo and tagline can be quite fun.

These same principles go hand-in-hand with your business name. What may partially inform the process of naming your business is whether there are any other recruitment companies geographically or professionally bordering your own. Is there are anyone in your vicinity or your niche operating with a similar business name?

Not only is this something to consider from a competition point of view, but also for purchasing a domain name for your website and setting up social media handles.

Once you’ve settled on a business name that is viable for both your digital identity and operational in your sector, claim your social media handles. Set up your LinkedIn and Facebook pages, and any other platforms you want to use, so you can take those usernames off the menu for other businesses and institutions.

When you’ve solidified your business name and branding, it’s time to take them and create a website with them. There are platforms you can use to design your own site that include hosting and domain name costs, but there are also options for professional web developers to design you a custom site.

Once these steps are complete, you’ve essentially created a digital footprint for your new business.

Putting in business support infrastructure

A business doesn’t run on its own. You need to set up systems, software and processes to streamline your business set-up and launch for all involved. Consistency is key.


When you run a business, you need to make sure your bookkeeping, management accounting, invoicing, payslips, taxes, insurance, and more are taken care of.

This can be difficult for a new business owner to juggle, especially because so much of business accounting is time-sensitive and relies on the correct documentation. Will you handle this yourself, or will you need someone to support you?

Many start-up business owners find it more comfortable to take on accountancy support. You may want to hire an accountant or outsource it externally.

Customer Relationship Management (CRM) software

A good CRM will give you a holistic overview of the entire recruitment process, from applicant tracking and nurturing through to your overall company activity in one centralized portal.

Not only is it time-saving and efficient, but it also creates a universal hub of information, making it easy to introduce new team members to your client base and internal processes when scaling up.

Investing in time-saving technology will ultimately reward your business as you’re able to spend more time with people rather than on processes.

Recruitment business mentoring

Seek guidance and mentorship from professionals who have been in your shoes before. Starting a new recruitment business is intimidating, especially if this is the first time you’ve considered striking out on your own. There is no shame in asking for help as a fledgling business, especially when you want to make that business a success.

At Recruitment Entrepreneur, we have fostered a community of businesses that benefit from the expertise of our dedicated team who provide; funding, financial expertise, operational strategy, back-office support, legal advice, marketing, and talent attraction solutions, all of which enable our partner businesses to flourish.

We make seeking investment for your recruitment start-up easy, and we’ll help you kickstart your new recruitment business.

Find out more from Recruitment Entrepreneur

Starting a recruitment agency is fun and exciting, but it doesn’t happen by itself. The better you plan before you launch, the bigger your chances of success. The answer to "how to set up a recruitment business" isn’t a simple one, but it’s a highly rewarding and commercially lucrative one. It begins with a comprehensive recruitment business plan, identifying a niche where you can operate, and securing the recruitment business funding you need to keep you on track.

Ensure you’re operating legally by preparing all your company registry details, insurance, and business formation. Then, set yourself up for a successful start by seeking how to start a recruitment agency and secure funding and financing through Recruitment Entrepreneur and our network of experts.

Bolster your business today and apply for investment with Recruitment Entrepreneur.

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