• Main
• Blog
• eShop
• Discussions
• Job Resume!

Home » HRM Business Opportunities » Your New Recruitment Agency » Recruitment Agency Business Plan » Recruitment Agency Business Plan: Main Initial Costs

Recruitment Agency Business Plan: Main Initial Costs

A bad estimate of the costs and revenues are the most common mistakes in the recruitment agency business plan. The recruitment agency is not a costless business as many people think, the recruitment agency has a lot of fixed costs, which has to be covered every single month.

The costs of the new recruitment agency can be managed, but the costs are always there. The costs exist from the beginning, the first income has to wait for several months. It is very important to notice that as the new recruitment agency has to have a reserve in the cash flow to survive several months without any income.

The main costs of the new recruitment agency can be divided into four main groups:

• Legal advice
• Marketing costs
• Rent of premises
• Operational costs

The legal advice costs can be underestimated easily, but the attorney is not cheap and the number of documents needed for setting up the recruitment agency can be pretty high. In many countries a special licence for running the recruitment agency is needed and some other limitation can exist. The legal costs should be analyzed in a big detail and the costs should be expected to be pretty high.

The marketing costs in the business analysis should take a large portion of the initial budget. The marketing of the new recruitment agency is not about several emails, the recruitment agency has to build its brand name on the job market to become a real competitor to the established recruitment agencies.

The premises are pretty important for the new business. The new recruitment agency has to be careful about the premises, but they are really important. The job interviews cannot be conducted in the local caffee for a long time. The premises has to be cheap and not to attractive in the beginning.

The operational costs are very dangerous. But the new recruitment agency has to pay for the computers and the HRIS system and it has to be carefully managed. Many recruitment business plans underestimates the costs of the web job sites and the website costs as well.