New Start Recruitment Business
Our client had been a recruitment consultant for over 10 years and in his words was ‘tired of making money for other people’. He had good experience and a good contact base and wanted to start his own business.
The business would be supplying temporary medical and care personnel into hospitals and care homes. Our initial conversation revolved around cash flow and how the staff would need paying weekly and invoices would be raised monthly. The client was only really considering a factoring facility so that he could access cash.
We further explained his options in terms of invoice finance (which included invoice discounting and factoring) and also the recruitment finance option which provides a full back office solution to recruitment companies as well as the finance that invoice finance provides.
The recruitment finance product that we have set up for this new start recruitment business provides a variety of outsourced services. These include payroll, invoicing and credit control. We also provided a 100% prepayment against the invoices meaning that after payroll had been taken care of the margin in the invoices was released back to the business.
By outsourcing the administration it means that a small new start recruitment business can focus on sales. The cost in this instance for the full back office solution and 100% finance was 2.5% of each invoice. This means you have a cost effective solution that is also a variable cost rather than the fixed cost of employing staff. It is an ideal solution for new start recruitment businesses. If you are a recruitment consultant and you are thinking of setting up on your own this could be the ideal solution to get you up and running.
As the business grows and develops their own in house capabilities certain services can be brought in-house and the costs will be reduced accordingly.
If you are a recruitment consultant and you would like to start up on your own please contact Funding Solutions today on 0845 251 4040 to discuss your options in full.