The Real Cost of Starting a Recruitment Business (And How to Save)

Have you ever asked yourself what it really costs to start your own recruitment agency — not just financially, but in time, risk, and long-term commitment?

Every year, thousands of recruiters take the leap. In 2024 alone, more than 7,000 recruitment businesses were launched in the UK. Yet, nearly half of them are predicted to close their doors within their first year. Why? Often, it’s down to underestimating the upfront costs, the operational complexity, and cash flow challenges.

Before you jump in, it’s important to understand your options—and the hidden costs most recruiters don’t see coming.

The Hidden Costs of Going Solo

1. Legal and Compliance Costs

Setting up a limited company is relatively simple, but doing it properly involves professional fees. Legal advice to draft your terms of business, compliance processes to protect client and candidate data, and insurance for professional indemnity and cyber liability all add up.

For most recruiters, this equates to several thousand pounds before you’ve even made your first placement.

2. Essential Tools and Software

Modern recruitment businesses need far more than just a laptop and phone. Whether you’re placing contractors or permanent hires, you’ll need a CRM or ATS, job board access, LinkedIn Recruiter (which alone can cost over £5,000 per year), and systems to manage timesheets, payroll, and invoicing.

Combined, these tools often cost £10,000 or more annually for a start-up.

3. The Cash Flow Challenge

Many new agencies fail not because they don’t win clients—but because they run out of cash. With client payment terms of 30, 60, or even 90 days, you may be funding contractor wages, covering your own costs, and waiting weeks to get paid.

Without a solid buffer in place, cash flow can make or break your venture.

4. The Extras That Creep In

Costs like branding, a basic website, networking, travel, accountancy, and marketing activity may seem smaller, but they mount up fast when combined.

The Usual Options for Recruiters Going Solo

Most recruiters looking to set up on their own will typically pick from one of three routes:

1. Go fully independent

Start from scratch, fund everything yourself, and own all the risk and reward. This option gives you total control, but it comes with the heaviest upfront financial burden. You’ll have to secure your own funding, pay for all tools and services, and carry the weight of compliance, cash flow, and operations.

2. Partner with an investor or join a franchise

This option removes some of the setup burden, but usually at a price. Investors will often take equity or a long-term share of your margins—and may be involved in key business decisions. Franchise models can also lock you in with commitments that restrict your freedom and earnings.

3. Work with a platform provider

Some providers will give you access to CRM, payroll, compliance support, and back-office operations—but typically for a setup fee and under restrictive contracts. While you’ll get support, you may lose flexibility and pay more than expected over time.

Why Myn is Different

Myn offers an alternative path designed around recruiter freedom and flexibility. There are no setup fees. No equity taken. No lock-in contracts. You can take your clients and candidates with you at any time.

With Myn, you get immediate access to the tools you need to trade like a top-tier agency, including LinkedIn Recruiter, a market-leading CRM, timesheet and payroll technology, and billing support.

We only charge when your client invoices are paid—not before. You will keep up to 90% of your margin, giving you the breathing room to focus on building your desk, securing clients, and growing your business.

On top of that, you’ll be part of a collaborative recruiter community where you can share jobs, partner with others—or simply focus on running your desk independently.

Ready to Launch Smarter?

Starting a recruitment agency can be costly and risky, but there is another way. Myn helps you reduce upfront costs, maintain your independence, and scale your business with the right systems and support in place from day one.

Visit www.myn.co.uk to find out how we’re helping recruiters like you launch leaner—and take home more of what you earn.