Setting Up An Agency

[AtW]

Havent you got a search engine to debug or something.

You are right.

[vetran]

Unfortunately

The contractors will need paying monthly / weekly on time otherwise they stop work.

The client will delay paying as long as possible. Are you going to tell the client you will pull the contractor from site for late payment? Or admit you can't pay your bills?


You need factoring or a stack of cash.

[Generalist]

The key issue as ever is finding clients. Hiring an agent is fine to get a supply of contacts, but how many of them will be on PSLs or have other procurement/HR department barriers to entry? The omb's I know have been able to exploit a relationship with a client or their own contacts from previous jobs. Start with that and cashflow, hiring staff and expansion can follow once you've got some presence in the market. And never put up your own money (although if you have a ltd co with some retained profit you are prepared to risk, perhaps to mitigate corporation tax this can be used to cover initial setup costs).

I'd be interested in collaborating with anyone who wants to do this or simply earn money from introducing clients/roles that result in placements. Email me privately if you want to explore this further.

[tim123]

MF, you appear to have missed out some costs. It is not normally the case that placing 5 people on a 15% margin results in anything close to profit for a silent investor. Even with 10 placements most of the margin will be eaten up in costs.

Some OMBs are prepared to work for the returns on a small number of placements but that is because they are in complete control. I don't think that an employed consultant would be so minded, especially one that came with a book of contacts, as, if they are any good, they could just as easily go out on their own (as many do).

tim

[MarillionFan]

"So you need 5 contractors to break even. 10 Makes loads" - Tim - I didnt say that. I reckoned 5 contractors would be break even. You would need 10 to start making cash.

"f they are any good, they could just as easily go out on their own (as many do)."

Agents like contractors. Need they're hands holding. And anyway who has a few hundred thousand in the bank? Except me.

[tim123]

"So you need 5 contractors to break even. 10 Makes loads" - Tim - I didnt say that.

Um, yes you did

Agents like contractors. Need they're hands holding. And anyway who has a few hundred thousand in the bank? Except me.

Anyone going out on their own will factor their invoices. This should cost them around 5%. This must be a better deal for them than paying a 'profit' to a silent investor.

Employing an experienced agent just has to be like buying a six month old used car. Why would this sort of person be prepared to risk working for a start-up on an 'average' deal?

I'm not saying that starting up an agency isn't a good idea. It's just:
a) not as easy as you think,
b) probably not a good investment for money in the bank. It can work just as well without putting up the money. Covering the cash flow is not the hard part here and doing so does not add value.

tim

[Judge Fred]

[threaded]

Being in this game for many many years I can tell you exactly how many of the agencies started: with nothing. By nothing I mean not even their own telephone and fax machine. From that starting point they got to where they are today, or did a moonlight flit and tried again.

If you think you need money and offices and staff etc. etc. to start an agency business then you'll not last even 5 minutes.

HTH