If you’ve always worked within other businesses before, you may not know how to create a startup budget. Well fear not, because it’s not as hard as it sounds and we’ve got some helpful advice to help get you started.
Creating a budget for your recruitment agency startup is important because it helps to define the financial goals and resources available. It provides an overview of how your agency will grow, how much money is required to get to break-even and then reach profitability, and where in the coming months spend will need to be allocated.
A startup budget allows business owners (and investors) to analyse a startup’s finances and determine which strategies or plans are most effective and likely to provide the best return.
Startup budgets at Bluestones Group
At Bluestones, we do things a little differently. Because, as an investment company that’s focused on the recruitment sector, we’ve refined the way that we work, streamlined the startup launch process, and provide a range of inclusive support services to the companies we’re investing in.
It means that although we need to create a startup budget, many of the costs you’d typically expect to see for a startup company are either covered by us, or significantly reduced through the Group’s economies of scale and combined purchasing power.
We do still require all investment companies to produce startup budgets as part of our investment process and due diligence… because we have to know what we’re investing in and understanding how a business will grow, and the cost of that growth, is naturally important when making such decisions. You can find out more about this when starting a new investment enquiry, as you’ll be asked to complete our simplified startup budget as part of that process too.
Key points to understand about startup budgets
Understanding your costs
As a helpful starting point, we’ve outlined the majority of typical costs that should be included in a recruitment startup budget.
- Initial set up costs TBC
Website design, logo creation, company incorporation, legal documents & contracts, etc.
- Employee salaries / commissions TBC
PAYE vs dividends consideration - and how this will be funded.
- Website hosting / promotion TBC
e.g. choosing a web CRM, a hosting provider, the underlying technology, etc. - and whether subscriptions are required. Then SEO, maintenance/support, and ongoing promotion will all be required.
- Premises / office space TBC
Will you work from home or use shared serviced offices, or find dedicated premises?
- Utilities TBC
Gas, electricity, broadband, etc.
- Professional services & subscriptions TBC
e.g. Accountancy services, LinkedIn Recruiter / Sales Navigator, etc.
- Job boards TBC
Which are essential for your business? Do you really need hundreds of vacancy advertising credits? Or do you just need CV searching options?
- Software subscriptions TBC
e.g. recruitment CRM / ATS, Office 365, etc. - and aside from licensing, there may be customisation requirements too, to make the system relevant for your sector or way of working.
- IT equipment TBC
Laptops, phones, printers, scanners, etc. - but do you really need the latest and greatest equipment? It's a common pitfall of many startups to get carried away with the excitement of launching their new business that they can let costs such as these get out of control.
- IT support TBC
Will this be real-time support? Will it be offshore support? Do you need external help or will the support you need be built into the contracts you've signed elsewhere (e.g. for your recruitment CRM).
- Funding TBC
Last but not least is understanding how you will fund your startup. Will this be from personal savings, angel investors, business loans, or via a dedicated investment company like Bluestones Group.
Additionally, there are some good free resources that are already available online that can help you with your startup budgeting process.
This budget template for new business owners from Gusto, is one such resource that’s free and easy to use. Alternatively, check out the wide range of business budget templates available from TemplateLab.com HERE.