Starting a Home-Based Recruitment Consultancy: What Steps Do I Need to Take?

Hi, Can anyone help me know the procedure to start my own recruitment consultancy? I have been in this field for the last 4 years. I am proficient with databases and clients, and I want to understand how to proceed with billing my clients.

1. I want to operate from my residence.
2. Will I need to open a current account?
3. Will I need to register my consultancy under a specific name, and if so, what is the procedure for that?
4. Will I need to obtain a service tax number? If yes, how should I proceed?
5. Please let me know if there is anything else required for this business.

Thank you.

Hi,

Even I had a similar plan, but I was also not able to get these details, so I had to drop the idea of starting a consultancy. It would be nice if anyone could help out.

First of all, as a requirement for any kind of business, including consulting services, you must have a feasibility study that shall initiate the business planning process. This is the procedure that is typically followed in the establishment of any organization, business, or enterprise. The feasibility study will detail all necessary requirements, procedures, systems, processes, legal considerations, as well as financial and geographical viability of the business.

Hi,

First of all, heartiest congratulations on thinking of starting a new venture!

The first step will be to register your company, whether it will be a proprietary or partnership firm. As long as it's proprietary, you can operate a current or savings account; it makes no difference.

However, a CA will help you get your firm registered, as well as help you with the service tax number.

A CA can also assist with information such as "maintaining books of accounts" and filing service taxes.

You also need to have a written annual contract with your clients, to whom you will be providing manpower. Most clients will have a ready format which you need to legalize on stamp paper. In case the clients do not have a format, you need to create one detailing payment terms and clawback period.

As you plan to start from home, you don't need to worry too much about accounts right now. Get your contract with the clients in place, start recruiting candidates. Once you start raising invoices, any accounts professional can help you with the rest.

All the best.

Regards,

Charu

Dear friend,

It is not that easy to operate a recruitment agency, especially when you cannot facilitate the complete recruitment and selection process. Nowadays, recruitment agencies are using the most advanced and sophisticated testing techniques for their clients.

In your case, you can target small companies or establishments that may not be able to advertise or afford to hire CV scrutinizers and recruitment & selection specialists. For them, you can propose CVs and contact information to conduct a recruitment & selection process by leveraging their trade experts and senior employees.

Regarding your queries:

1. I want to operate from my residence.
Answer: As discussed above, setting up a recruitment agency requires a significant infrastructure, so operating solely from your residence may not be feasible. However, you can still propose candidates to clients.

Note: There are many websites in the market that fulfill these requirements at affordable rates, posing significant competition to your business.

2. Will I need to open a current account?
Answer: The necessity of opening a current account depends on your revenue and usage. It is advisable to contact a reputable bank to discuss and select the most suitable account for your needs.

3. Will I need to register my consultancy under a specific name, and what is the procedure for that?
Answer: Yes, you will need to register your consultancy under a specific name. The registration procedure varies regionally, so it is recommended to seek guidance from a knowledgeable individual or a legal advisor to complete the registration process according to the applicable regulations.

4. Will I need to obtain a service tax number, and if so, how should I proceed?
Answer: Yes, obtaining a service tax number is necessary. It is advised to consult with a tax expert to receive guidance on the process as compliance is crucial in this regard.

5. Please inform me if there is anything else required for this business?
Answer: As mentioned previously, there are several other considerations to address. Seeking advice from experienced individuals in the community may provide additional insights and recommendations for your business setup.

Hope the above responses address your queries.

Khaiser Ali Shah
00966509928983

Hi Charu,

Thank you for responding to my query. I think I have at least found a positive way forward to consider the right direction to enter this business. I appreciate your insights.

Thank you.

Hi,

The following information may be helpful to you in your new venture of recruitment business.

Recruitment business is vast by nature. There are various kinds of staffing such as Permanent Staffing, Temp Staffing, and RPO. Furthermore, you can narrow down to Executive Search, Contingency Recruitment, Turnkey Recruitment, and Advertised Recruitment.

Please note the recruitment business process in Permanent Staffing solution:

1. You need to decide which vertical (IT/Manufacturing/Civil/Pharma/Chemical/Oil & Gas, and many more) you would like to operate/start a business in.

2. Create a client database according to the selected vertical.

3. Prepare contract documents. Before starting any recruitment assignments, you need to sign a contract with the client.

4. Recruitment charges may vary from 8.33% to 20% of the CTC value of the selected/joined candidates. Normally in India, recruitment organizations charge the organization.

5. You can use job portals like Naukri, Monster India, and TimesJob to access candidate databases. You may also upload job positions.

6. There are a few techniques for acquiring candidates, such as Headhunting, Reference, and Database.

7. Manage your database with specialized software so that the inventory of resumes remains in good condition. Whenever you need resumes with specific skill sets, you can retrieve them from the internal database if the inventory of resumes is well-maintained.

8. Training could be provided on Communication Cycle, Candidate Cycle, Pitching & Client Meeting, Campaign Management, Candidate Development, and Client Cycle.

9. Accounting and Taxes (Income Tax as well as Service Tax) should be handled by an accountant.

10. Infrastructure Setup: Company Registration, Office Rent, Computer Infrastructure Cost, Employee Salaries, and Job portal contract fees.

Enjoy!!!

DN

Hi,

Here you go....

1.I want to operate from my residence.

You can always start it from home. No high-end infrastructure needed. All you need is good networking and market knowledge, PC with broadband and a phone.

2. will i need to open the current account?

Yes.

3. will i need to register my consultancy under some name, then what is the procedure for that?

Its better to get it registered first than start operating. You can contact any Tax consultant who will help you out in firm registration and getting a service tax number for your firm. He can also suggest you the template of the agreement with clients ( though may clients prefers their own agreement template)

4. Will i need to get the service tax no., if yes then how do i go for it?

Already answered.

5. Pls let me know if there is any thing else required for this business?

Good market knowledge and contacts, one portal license and lots courage and patience. You may not see the return in the first day … Perseverance is the key …

All the Best !!

Hi Smita,

This business is becoming very popular now days BUT you need a lot patience , however initial 6 months would be a challenge for you.

Plan your financial budgets & go for a pilot run for initial 6 months. It's not mandatory to get business but potential business (do able) from clients.

STEP 0

Prepare your outlook & analyse your business plans.

STEP 01

Select a name of your company (make sure it's not starting with an individual name)

Now access this link & check your company name whether it's available or not MCA21  : Check Company or LLP Name

STEP 02

Once company name is selected, start as proprietorship firm (its required Service Tax number after a gross billing of Rs.10 lacs plus). I think a CA can explain u better as it's a long process and I can't explain here ;)

You'll able to decide your future after a year (ROI). If everything works fine, then increase your support staff (recruiters) & cover your local territory first (this will reduce your cost as well).

STEP 03

Now it's time to think about registration of your firm as Pvt.Ltd.

You would be require a lot of formalities like

DIN Number (The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending Directors have to obtain DIN within the prescribed time-frame as notified.)

Company registration/ Memorandum of Association, Service Tax Number, PAN Number etc etc

I have a lot of stuff to share with you but its difficult to put all together on website, better you get in touch with me on my chat ID [Login to view]

Regards

Deepak Kapoor

09891709730 (New Delhi)

Dear Sir, I have also started home-based work, so I want to know about the payment procedure with the company. Can you provide me with the format (agreement between consultancy and company) or any other formality for this issue? Waiting for your response.

Thanks & Regards

Required Documents for Starting a Recruitment Consultancy

You require the following documents:

- Shop Act License, which you will obtain from the corporation.
- Service Tax number, registered under Manpower Recruitment business.
- Bank account and your PAN card.

Best of luck.

Hi, I am planning to start recruitment from my home, but I don't know how to gain good clients. Can anybody help me with how to acquire good clients? (If I place a candidate, the company has to pay for my service.) I prefer not to obtain fees from candidates.

Hi All, the advice given is good and logical. I am in the process of starting the same and would like to know a few tips on how to approach a company to place my candidate on their hot spots. I am working from home and have registered as well. I am operating from Nigeria.

Regards,
Mrs. Dutta

Dear Sir,

Thanks for the advice. I would appreciate it if you could provide tips on how to approach companies to place candidates.

Regards,
Mrs. Dutta

Steps to Start Your Recruitment Consultancy

First, register your company under the Shop and Establishment Act. You can do it online. Next, get a PAN card for your company. Open a bank account; you will need the registration copy, PAN card of the company, rubber stamp, and letter pad of your company.

Now, take a Naukri and/or Monster database. Have a separate landline, internet connection, and a laptop, and if possible, in your house, a separate room. Have a website for your company and submit it to various free directories online. That's it, you are ready to go.