How Much Does It Cost to Set Up a Recruitment Agency?

How Much Does It Cost to Set Up a Recruitment Agency?

Whilst recent events have created a challenging environment for companies, the prospects for the recruitment industry are very strong and there are serious opportunities for astute entrepreneurs entering the game.


Starting your own business is an exciting but daunting step so, it pays to have an idea about what your set costs are going to be. To help you get started we have prepared a list of what you’ll need to get your recruitment agency up and running with the associated costs.

The Essentials

The necessities for getting a recruitment business started aren’t that costly at all. The two things you’ll definitely need to get going are a mobile phone and an internet connection. You can even use your personal mobile to begin with but to really hit the ground running you’ll want to invest in the following:

  1. Registering your business = £12 (one off fee)
    First things first, you will need to decide on a company name and register your business. Registering is easy, and the government website can walk you through step by step. The online process can take as little as 15 minutes and your business can be set up within 24 hours.
    Registering your business will incur a one-off fee of £12.
  2. Setting up a business account = £0
    Once you’ve registered your company you can set up your business account for free.
  3. Phone contract = £6 – £30 (per month)
    Use a dedicated handset to kick-start your business. You can do this for as little as £6 a month but find a plan that suits your needs. If data capacity and unlimited calls are necessary, then you may end up investing more in a contract.
  4. Logo and business cards = £10 – £2k (one off fee)
    You’ll need a brand so people can identify your business and you can begin to market it. Investment in this area will vary, and each start-up is different.
    Websites like Fiverr offer logo and brand packages starting at £3.88, whereas designers offering bespoke brands will cost you into the £1000’s. Don’t forgot to budget for business cards too, averaging about £5 per 100.
  5. Website = £10 – £1k (per month)
    Creating your website doesn’t need to be complicated or costly, and there are lots of options out there. If you want to take the ‘build yourself’ approach, then companies like Wix and Squarespace offer packages from £10 – £15 a month.
    If you don’t have this time to invest, then consider a professional web design company or hire a designer. Charges for these services are more likely to be around £1000 a month.
    Do make sure you don’t sacrifice quality for price – your website is essential to your business. It needs to be easy to navigate and ideally set up for mobiles, as many users look for jobs using their phones these days. Make your money count here!
  6. Domain name purchase = £7 – £12 (per year)
    As well as your website don’t forget your domain name – a domain is an essential online business purchase. Generally, you can expect to pay in the region of £7 – £12 for a new domain registration.
    For more information on domain name costs and hidden costs to avoid click here.
  7. Business insurance = £60 – £200 (per year)
    This is one that does have to be ticked off the list. As soon as you employ your first member of staff, you’ll need employers’ liability insurance that covers you for claims of up to £5m. Public liability insurance is also a good idea when small businesses and sole traders will pay as little as £40 a year.
    Ensure that you’re protected against unforeseen risks, and avoid any nasty fines using this Companies House Guide.
    So here is an idea of essential start-up costs. Your business plan and individual needs will also influence some of these figures, but the fees provided will give you a strong idea of initial investment. Once all essentials are in place you can begin your online presence, building a LinkedIn profile, posting jobs on your website and across your social channels.

The Extras

Now we are going to list for you three highly recommended extras. You’ll ideally want to allocate part of your budget to these as it will make your start-up journey a lot easier in the long run.

  1. Investing in premium options = £25 – £320 (per month)
    There are many free job boards but paying for sponsored job postings will increase your reach. Investing in this early will pay dividends and most sites offer tiered plans to choose from. At Monster starter plans are £130/pm and standard are £320/pm. At Indeed you pay only when someone clicks on your jobs. Whereas LinkedIn Premium offers many perks – you can try free for a month and then pay at £49.99 per month. Shop around and see what suits you!
  2. Recruitment database = £18 – £99 (per user/ per month)
    There is customised software available to help you easily keep track of applicants, and sort candidates according to skills and experience. CRM stands for ‘Customer Relationship Management’ technology and ATS – ‘Applicant Tracking System’ is another.
    This technology is not essential to start your recruitment business, but it is to grow your business – and the quicker you grow the quicker you can turn a profit. Do your homework and use this directory to choose from hundreds of options.
  3. Invoice funding = £ variable
    Given the costs discussed above, plus what you will need to survive in the early days, you may be contemplating external investment or a business loan. Make sure you also consider invoice funding. This is an option many small businesses employ when cash flow can be tight. Invoice financing is common in recruitment to bridge the gap – so agencies can pay contractors before the client pays their invoices. Read our guide on Invoice Financing Vs Invoice Factoring to learn more.
    Again, this add-on is not an essential, but it will give you the cash you’re going to need up front, so you can grow a successful recruitment business.

Total Cost?

Drumroll… the total minimum cost to set up a recruitment agency is:

  • Essentials = £25 up front and £40/pm
  • Extras = £50+/pm

Not as much as you might think!
We’ve provided you with the basis for a solid costing plan here. Depending on your budget and your vision you may want to invest more in ads, web design or software solutions – this is ultimately your decision, so get planning and budgeting.

Supporting Your Recruitment Business

Back office and payroll are two essential components in the running of your recruitment agency and here at 1PS we specialise in both. We can offer a software solution and centralised operation for your back office, to make your life easier and your business run smoother. We can also help fund your recruitment agency so that you have the capital to grow.


So, if you’re serious about starting your own recruitment business, and are willing to invest time and money early on, to lay solid foundations, then please get in touch. Our experts are happy to discuss your strategy and help you discover the right solutions for you.