How to start a recruitment agency: the order of steps and the tools to pick

How to start a recruitment agency: the order of steps

• Pick one niche: a role family, an industry or a region where you already know clients and candidates.
• Choose how you will be paid: permanent placements, contract staffing, retained search or a mix. Each needs different records and a different pipeline.
• Set up the business with your state and local offices and a licensed professional.
• Choose the candidate and client system before the first search, and test it on one real job.
• Import your contacts, log the first client intake and decide how many seats you need.
• After the first month, export a copy of your data and check what the tool actually charged.

Business setup: what the SBA guide lists

The Small Business Administration's launch guide lists these steps, each with its own page:

• Pick your business location, which sets the taxes, zoning and regulations that apply.
• Choose a business structure, which affects taxes, paperwork, personal liability and your ability to raise money.
• Choose and register your business name.
• Register the business, and get federal and state tax ID numbers.
• Apply for licenses and permits, open a business bank account and get business insurance.

Where the rules vary

The SBA says registration, names and licensing requirements vary by business structure and by state, county and city. Ask your state and a licensed professional what applies to a recruitment or staffing business before you take a client.

If you will put temporary workers on your own payroll, the IRS employment taxes page says employers must deposit and report federal income tax withheld and both the employer and employee shares of Social Security and Medicare taxes. Confirm your case with a tax professional first. This guide gives no legal or tax advice.

Choose the tools before the first search

Every job brings candidates, notes, submissions, client feedback and a fee to track. A spreadsheet loses history and ownership as soon as a second person joins, so an ATS and CRM is worth setting up on day one. Judge a tool on these points:

• Billing unit: most tools bill per user, so count the people who need a login.
• Trial length: the vendors' pages state 30 days at Recruit CRM, 14 days with no card at Manatal and 7 days with no card at Loxo.
• Import path: Recruit CRM lists a free CSV import tool and paid assisted migration. Manatal lists imports from CSV or JSON files.
• Daily work: email and calendar sync, a pipeline per fee type, and invoicing if you bill placements.
• Exit: Recruit CRM's terms keep data for 14 days after termination or an unsubscribed trial, so export before you cancel.

A 30-day trial plan

• Week 1: import your contacts and build one pipeline for your main fee type.
• Week 2: log a real client intake, add the job and start an outreach sequence.
• Week 3: submit candidates, record client feedback and test email sync.
• Week 4: raise a test invoice, count the seats and credits you used and compare the total with the live pricing page.
• Then read the best CRM for recruitment agencies guide before you pay for any plan.

What this guide leaves out

It does not estimate earnings, fees or how long a first placement takes, because none of those can be read from a vendor page or a government guide. For one system in detail, see what Recruit CRM is and how its plans and credits are counted.