set up agency to 'poach' contractors? advice/comments please

**SpontaneousOrder** · 18 February 2014, 12:24

Originally posted by phillcooper View Post

hi,
something I just thought of which I thought some people on hear might be able to give me some advice about.

I am a contractor working through an agency for a client. The client has a number of other contractors all through different agencies.

What if, the contractors would hand their notices in to leave and then I would employ them through my new agency to to the same job for the client.

Say for example the current agencies charge £6/hr on top of the contractors rate. My new agency would charge the client £5/hr and also give the contractor an extra £1/hr therefore making a profit of £4/hr.

Obviousely there are many factors to consider including the contractors and client beaing happy to do this but for the sake of argument presume that everyone is happy to do this.

I am just wondering -

a. is this feasable?
b. is it legal?
c. any thing else to think about?

Any help of advice/comments would be greatly appreciated.

Thanks

Not sure I'd bother with the hassle to go working for you for an £8 per day raise

**stek** · 18 February 2014, 12:30

Surely there would be a clause forbidding the contractor from working for that client ya that site?

**cojak** · 18 February 2014, 12:31

Do you know (or understand) WHY they charge the extra £6 per hour?

Find out that, then calculate your capital expenses, overheads etc.

Then come back to us with the reason and figures - you may realise before then if this is a goer or not.

**DirtyDog** · 18 February 2014, 12:36

Originally posted by phillcooper View Post

a. is this feasable?

Not at those rates, no. Why would I move from an established agency with some degree of financial reassurance to someone who is a complete unknown entity with no financial fallback for an extra £8 a day?

Have you got the resources to pay out if the client refuses to pay you? Have you got the resources to pay out if the client goes bust? Have you got the resources to pay out while you wait for the client to pay you, or are you not even bothering to offer a factoring service?

Originally posted by phillcooper View Post

b. is it legal?

Yes. Whether it breaches any clauses in the contract between any of the contractors and their agencies, and / or between the client and the agency is a different matter.

Originally posted by phillcooper View Post

c. any thing else to think about?

How many contractors do you think have considered doing this in the past? And how many do you know that actually do it?

How are you going to build the business and find new roles that you need to recruit for? or are you just suggesting that you want to do it for this one client? How good are you at cold-calling clients to try to get your name onto their list?

There is some sort of legal registration that you need for an agency as well, IIRC, so you'll need to look into that as well.

I just don't see how you intend to make it work for anyone, to be honest. I'm out.

**Pondlife** · 18 February 2014, 12:41

It sounds a bit like the newbie contractor's version of the "I should open a launderette with a pub in it" idea that students have.

**phillcooper** · 18 February 2014, 12:56

to start with i was just thinking of it for the client who i currently work for. Lets say there are 5 contractors.

As far as i know, all i would be doing is sending 5 invoices and 5 payments every week. Yes, assume I have the money to cover the 5 contractors invoices for a couple of weeks or however long the clients payment schedule is.

The only thing the contractors would have to do is send their timesheets to a different agency, and theyll get an extra £160/month.

**tarbera** · 18 February 2014, 13:09

great idea

Originally posted by phillcooper View Post

hi,
something I just thought of which I thought some people on hear might be able to give me some advice about.

I am a contractor working through an agency for a client. The client has a number of other contractors all through different agencies.

What if, the contractors would hand their notices in to leave and then I would employ them through my new agency to to the same job for the client.

Say for example the current agencies charge £6/hr on top of the contractors rate. My new agency would charge the client £5/hr and also give the contractor an extra £1/hr therefore making a profit of £4/hr.

Obviousely there are many factors to consider including the contractors and client beaing happy to do this but for the sake of argument presume that everyone is happy to do this.

I am just wondering -

a. is this feasable?
b. is it legal?
c. any thing else to think about?

Any help of advice/comments would be greatly appreciated.

Thanks

well worth it, how would you deal with say 90 days payment terms.?

**kevpuk** · 18 February 2014, 13:15

In principle, it *could* work....

In reality, it will not.

**northernladuk** · 18 February 2014, 13:20

Wow. You are really not cut out for agent work are you?

A) Handcuff clauses will not allow you to do this
B) Do you have the time to manage all these contractors
C) Do you have the funds to not get caught out if the client pays late
D) Do you think the contractors want to go with you? What is in it for them?
E) Are you on the clients PSL?
F) Do you not think the client is likely to finish you if you encourage all their contractors to hand their notices in?
G) With no processes in place is that margin really enough for you to spend time sourcing contractors, interviewing them and then managing them going forward.
H) Have you considered the start up costs of getting contracts drawn up and legally checked as well as some form of admin tools, insurances and the like.
I thru to Z) which I am sure there are.

Very very poorly thought out idea. Stick to contracting.

set up agency to 'poach' contractors? advice/comments please