How much does it cost to set up a recruitment business?

How much does it cost to start a recruitment agency?You maybe thinking of starting a recruitment agency of your own, but not too sure of the startup costs, this could be the beginning of a fantastic business journey for any recruiter.

Being aware of the startup costs involved before proceeding however and ensuring that you are ready to cover them to give your company the best possible start to life.

All you really need to get going is a phone and a laptop or computer, though you should heavily consider putting away some back up cash in case you ever need it during the early stages of the business. So that you know where you stand, we have broken the basic costs down regarding starting an agency.

Recruitment agency startup costs

Anyone looking to start their own recruitment agency will need to consider a number of start-up costs. First, there are the necessary professional fees, such as incorporation fees and the cost of hiring an accountant.

Then there are the more practical costs, such as office space and furniture, advertising and marketing, and software and website development. Of course, no business can operate without employees, so recruitment agencies will also need to budget for salaries and benefits.

Finally, it is always important to have a financial cushion in case of unexpected expenses. With all of these costs taken into account, it is no wonder that starting a recruitment agency in the UK can be a daunting proposition.

However, with careful planning and a bit of hard work, it is certainly possible to turn your dream into a reality. Starting a recruitment agency in 2022 can be hard going, there will be plenty of opportunities for you to get stuck into, will an ever growing todo list.

With this in mind we’ve drawn up a checklist of things with castings of things that you can tick off before you’re up and running.

Planning a budget for your recruitment start up

Any business start up is a risky proposition, and a recruitment company is no different. Not only do you have the usual concerns about things like staff costs and overheads, but you also need to think about how you’re going to generate enough income to cover all your expenses.

That’s why it’s so important to create a realistic budget for your new business.

Start by mapping out all your fixed costs, such as rent, equipment and any professional fees. Then list your variable costs, such as advertising and travel. Once you have a good idea of your outgoing costs, you can start to think about how much revenue you need to generate each month to break even.

Make sure you build in some flexibility into your budget so that you can respond to changes in the market or unexpected expenses. And finally, don’t forget to factor in your own salary! By taking the time to plan your budget carefully, you can give your recruitment start up the best chance of success.

£12 up front and £30 per month should cover the costs of the following:

  • Registering your business
  • Getting a decent phone contract
  • Obtaining a business bank account
  • Developing the identity of your brand
  • Creating and publishing your website
  • Job advertisement postings
  • Building a LinkedIn page for your company

The extras you may need (£10-£100 up front and between £75-£150 per month)

  • LinkedIn Premium account
  • Available Invoice Factoring options
  • Purchasing a CRM system

We will now discuss these in further detail to ensure you understand the importance of covering the cost of everything we have previously listed. Many things we touch upon today will help to get the ball rolling, keep your cash flow healthy, and ultimately benefit your recruitment company in both the short- and long-term.

The must haves

If you want to give your recruitment agency the best possible chance of achieving success, these are the things you absolutely need.

Register your company (£12 one off payment)

If you are new to running a business venture, you may find this task to be a little bit daunting at first, but you should not fear it. This is perhaps the simplest step in starting a new recruitment business.

You will need the following information to register your agency:

  • Recruitment agency name
  • The address of the UK office
  • Details of share capital
  • Director name, address, nationality, date of birth, and occupation
  • Subscriber details
  • Number of stocks and shares that are currently held
  • Your preferred form of payment
  • The one off £12 fee will need to be paid

Getting a decent mobile phone contract (£15-£25 per month)

You will likely have knowledge of what this entails from your everyday life, as most people do these days. As a recruiter, your phone is extremely important to you, maybe even the most important piece of equipment you have access to. The key thing here is that you will need to find a contract with unlimited minutes and probably an unlimited amount of data. You will need a lot of internet use to get through your daily tasks while you are on the move.

Finding a phone contract that covers these things should cost you no more than £25 per month if you shop around for the right deal.

Obtaining a business bank account (Free)

Yes, that is correct, this part of the overall proceedings is free of charge, though that doesn’t subtract from its importance. Opening a business bank account will help you to keep your money in one place and complete your tax returns with a greater amount of ease.

There are currently many options available to you on the market. Discovering the correct business bank account for your recruitment agency may take time, but you would be wise to assess your options in detail. Select the account that suits your situation the best and go about your business from there on out.

Develop your brand identity (Roughly £100 one-time payment) 

Creating a brand for your agency is absolutely essential if you want to find and connect with an audience. This will make your business venture identifiable and help it to achieve solid growth quickly.

There are multiple ways in which you can help to form the identity of your business venture. Carefully crafting the perfect logo for your company can have huge, long-lasting impacts on the success of it. On the other hand, you have business cards, which can hold equal amounts of importance.

To be able to use your business cards effectively, they must in themselves be effective on several standpoints. For instance, the look of the business card must be something that catches people’s eyes and grasps at their attention immediately.

Of course, the look of your business card will be highly dependent on what sort of company you run, but that is no excuse to make an unprofessional business card. Even if the target audience of your product or service is children, you should still make a professional card, as it is the parents who will be viewing it.

Therefore, you must always consider who the audience of your firm is, as well as who’s hands your business cards will end up in. The target audience isn’t always the same as the purchaser of an item and so you should perform the proper research as to where you want your business cards to end up before releasing them into the wild.

Creating your company website (£7-£30 per month DIY, or £25-£75 an hour for a web designer)

Another one of the essential recruitment agency start-up costs is creating your recruitment company website. This also links in with our last point on building your brand, as your site should be a large part of your online image.

When you set up a recruitment business of any kind, you will need to spend time developing your online presence and develop a convenient website that your users can use efficiently.

You could utilise the free trial of either Wix or WordPress (other options are also available) before you decide on which one suits you better, and then eventually fork out for the package you need to create a professional webpage.

Of course, you could also employ a web designer and go down that route. While this is more costly, you should get the very best results, especially if you’re unexperienced when it comes to website design.

Build your LinkedIn page (Free of charge) 

If you are starting a recruitment business, you will absolutely need a LinkedIn profile to go with it. You’ll likely be spending much of your time using this platform as somewhat of a hunting ground for candidates, etc. It won’t take too long to set up your profile, but it is an essential part of the recruitment agency building process.

As you go through the steps of crating your business profile, make sure you include all the information your potential audience will be looking for. You want to appeal to the people searching for your services, so be sure to do everything you can to stand out from the rest of the crowd.

The minimum that should appear on your LinkedIn company profile is as follows:

  • Lead with some relevant search terms that describe what your company is and what it does
  • Write just a couple of sentences that describe why your agency is special; this is a great place to talk about your unique selling point (UPS)
  • Remain consistent with the messaging of your website as you include information on your vision, values, and mission
  • The size of your company
  • The location of the business
  • What industry it operates within
  • Link to your website
  • Your logo and other relevant imagery

Begin creating job postings (Free)

To set on your first employee(s) you will need to advertise your job openings in several places. This could include the likes of LinkedIn, but also online job boards where many applicants will be checking on a daily basis. You have a lot of choice here and could even utilise multiple sites for the same positions. A selection of these services includes Indeed, Google for Jobs, and Glassdoor.

The only potential cost to cover here is if you want to post sponsored job listings which will ultimately be seen by a greater number of people and likely receive more applications.

Indeed offers a great service that can be utilised from as little as £1 per day, though the more that you spend the more applicants you will reach.

The extras you may need

Now we move to the extras and provide you with greater amounts of detail about them. These are labelled as things you may not need right away but would likely greatly benefit from. You should view these as highly recommended, but if you cannot afford them from the start, you should still get by alright.

LinkedIn Premium (a yearly fee of £66.66)

Having a LinkedIn Premium account affords you far greater oversight as a recruiter, improving and scale in how you source candidates.

With a LinkedIn Hiring plan, you can contact all potential candidate with a unique messaging service, save time with advanced search filters to find the best candidates that match your requirements, and make life a little bit easier for you as a recruiter on the platform.

Invoice Financing (the price can vary)

Invoice Factoring is a type of business finance which releases cash currently tied up in outstanding customer invoices. As a new start up business, cash be tight and the wait for clients to pay your recruitment firm will be over 30 days, Recruitment agency finance is a great fit, to ensure there is cash to pay your staff regardless if they are weekly or monthly paid.

This business solution is ideal for helping fund expansion plans, improving your cashflow and collect payment from your customers. There are two main types of funding options: factoring and discounting.

With factoring the finance provider will fund and carry out credit control. Invoice factoring is simply a way to release the money owed in funds that’s tied up in your unpaid invoices.

Instead of waiting for your customers to pay, you borrow against the money you’re owed and is a type of debt financing. Not only do you get the money you’re owed without the wait, but we also chase up your outstanding sales ledger for you with debt collection services.

The price here greatly depends on what provider you opt to go with, so do your research before making any rash decisions and get the deal that fits your company the best.

There are a number of different ways to help finance a recruitment agency, most can be included within your day to day costs.

Some costs will stem from unique needs

Some of the costs attached to starting a recruitment agency may not have been accounted for here, and that is because they may be unique to your business venture. You see, every business is different, regardless of whether it is in the same industry as another. Things will be run a slightly different way and therefore require differing costs to be covered throughout its lifespan. This is no different when you first open your doors and initially lift your company off the ground.

This is partly why we previously mentioned putting some cash to one side for any costs you are not yet aware of. You are sure to need to pay something you hadn’t thought of at some stage of creating your new recruitment agency.

Read more: Recruitment Agency Startup Checklist


The cost of setting up a recruitment business can vary greatly depending on various factors such as location, business model, and scale of operations. On average, however, the initial setup costs for a recruitment business can range from £5,000 to £50,000 or more. These costs may include expenses such as business registration and licensing fees, office space and utilities, equipment and technology, marketing and advertising, insurance, employee salaries and benefits, and other miscellaneous expenses.

Additionally, ongoing operational costs such as employee salaries, marketing and advertising expenses, and technology maintenance should also be considered. It’s important to carefully plan and budget for these costs to ensure a smooth and successful start for your recruitment business.

Business Finance specialist at Invoice funding | + posts

Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.

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