Employment Business Micro-Business — UK Starter Guide
Startup Cost: £50–£300 | Difficulty: Beginner | Time to Start: 7 Days | Business Type: Local
Many founders in places like Manchester or Leeds already know local trades that struggle to find reliable staff. An employment agency can start by matching those workers with the same firms, using only a laptop and basic paperwork.
What is an Employment Agency?
An employment agency finds candidates for employers and charges a fee for each successful placement. The model works best when the operator already knows one narrow sector such as hospitality, logistics or retail.
Video Breakdown
The video walks through choosing a niche, setting up basic records and finding the first clients without heavy advertising spend. Watch the full video on YouTube for the full walkthrough.
Key Takeaways
- Focus on one postcode area or trade first
- Keep all documents on free cloud storage
- Charge 10–15 % of first-year salary per placement
- Register as self-employed with HMRC before taking fees
- Use existing contacts rather than paid job boards
- Review every contract with a mentor service before signing
Startup Costs in the UK
Most items can be covered for under £300 if you already own a laptop.
| Item | Approx. Cost (UK) | Notes |
|---|---|---|
| DBS check | £18 | Required for many sectors |
| Basic website | £0–£40 | Free builder or one-page host |
| Contract templates | £0–£50 | NatWest Mentor provides samples for account holders |
| Phone and data | £10–£20 | Existing mobile contract |
| Printed cards | £20 | Local print shop run |
| Insurance top-up | £30–£80 | Public liability add-on |
In practice, you can get to your first paying client for a total setup spend of roughly £100–£250.
Tools & Equipment Needed
- Laptop with spreadsheet software
- Free email account for client and candidate lists
- Simple invoice template
- LinkedIn or Facebook Business page
- Phone for calls and messages
How to Start
- Pick one sector you already know, such as warehouse work in your town.
- Register as self-employed on GOV.UK and note the Unique Taxpayer Reference.
- Draw up a short placement agreement; have it checked by NatWest Mentor if you bank with them.
- Build a single-page site listing the roles you cover and contact details.
- Visit five local employers in person and leave cards.
- Post one role a week on free community groups and collect CVs.
- Log every conversation in a simple spreadsheet for HMRC records.
Earnings & Scaling
One placement a month at £1,500 fee gives £18,000 gross in year one. Two placements a month moves the figure toward £35,000 once repeat clients appear. Growth usually comes from adding a second niche rather than hiring staff early.
Pros, Cons and Risks
Pros:
- Low fixed costs after the first month
- Work from home or a café
- Direct payment on invoice
Cons:
- Income arrives in lumps, not weekly wages
- Clients sometimes delay payment
- Need to keep chasing both sides of the deal
Risks:
- Placing the wrong candidate can damage reputation fast
- Regulatory changes around worker status affect fees
- Seasonal dips in certain trades
UK-Specific Tips
- Keep placement records for six years for HMRC inspections
- Check right-to-work documents on every candidate
- Advertise on local Facebook groups rather than national boards at the start
- Ask NatWest Mentor for template health-and-safety policies if you place staff on client sites
FAQ
Do I need a licence?
No general licence is required in England for most sectors, but some care or security roles need extra checks.
How do I get paid?
Send an invoice to the employer once the candidate starts; most agencies ask for payment within 14 or 30 days.
Can I run this alongside a job?
Yes, but declare the income to HMRC and keep evening calls separate from daytime work.
What if a client refuses to pay?
Use a written agreement and chase early; small claims court is an option for larger sums.
Conclusion
An employment agency rewards people who already know their local employers. Start narrow, keep records clean and add services only after the first few placements. browse more ideas on MicroBiz365.
