If you have landed on this article, you are probably searching for an answer to the following question: ‘How do you start an HR business?’ As with pretty much any other type of startup, many different components are required for an HR business to get off the ground successfully.
One of the main elements revolves around finance.
It’s not simply a case of raising enough money to begin your HR business venture. This cash needs to be spent wisely. It’s not just a case of expenditure, either. There needs to be a focus on revenue coming into the business.
For assistance, the following is a helpful guide that centers on the financial side of starting a HR business.
Research the market
Research is the cornerstone for any business idea. It gives insight into whether the idea is a viable one and there’s a customer base ready to use your HR services.
There are two general ways in which you can conduct research:
- Primary research: Where you find information via your own initiative.
- Secondary research: Where information is found from a source that already collected and collated data.
Both methods are useful for your HR business. Primary research, in essence, has limitless potential. You can talk to as many people as you want about your business idea, and you can go in any direction with the discussion.
In addition, you can analyze the competition and gain valuable insight into the HR industry for your local area. What are they currently offering? Which type of customer are they attracting? How can you better the service they are providing?
As for secondary research, this is useful for gaining awareness about demographic data and the size of the market. Regarding these points, there will often be reports that directly – or indirectly – link to your idea of a HR business.
Collate your figures and form a business plan
Once the research is done and you have the confidence that you’re onto a winner, it’s time to formulate arguably the most important part of your HR firm: the business plan.
This is the point at which you will settle on the type of HR consultant you want to be. Do you desire to be a generalist consultant, where you have a broad focus? Or maybe the aim is to target a specific market, such as finance or mining, and become a HR specialist in the particular field?
When you have decided what to concentrate on, you can then start putting the numbers together and understand what type of financing you’ll need. While the HR industry might seem like a relatively cheap one to enter – particularly if you go it alone – a significant budget will still be needed to turn your idea into a success. There are the likes of office rent, insurance, and marketing to consider. If you’re planning on being more adventurous, you might also need to budget for employees, additional insurance, and equipment.
The business plan also plays a big part for the next aspect: getting finance from lenders.
Reach out to lenders
When you think about financing, the first option to come to mind will likely be the most traditional one: a bank. While a business loan from a bank is a viable choice that offers plenty of benefits, it also isn’t necessarily the best choice.
This is down to the fact that it is difficult to be approved for a bank loan. Even if you have a strong business plan and an acceptable credit rating, this isn’t a guarantee that a bank will hand out the cash.
Thankfully, there is the alternative choice of going with a private lender. As biz2credit.com demonstrates, there are a number of lenders available who will grant loans to those who even have bad credit. Not only that, but the entire process of gaining a business loan is relatively fast and simplified.
Get the word out
As a new HR business, the bulk of your budget will go towards marketing. There are many different advertising methods that you can use, although it is up to you to work out which are the most effective for your target audience.
Marketing options for a HR business include:
Build up revenue with entry-level services
With the expenses incurred, it’s essential that your HR business starts generating revenue, and fast. Sadly, it can be a slow process to build up your reputation and land large money-spinning projects.
This is when entry-level services can save the day. Tasks such as small training sessions and quick audits can help to keep the money flowing in. Plus there will be a larger market for people seeking smaller tasks like these than any big assignments.
Furthermore, you could integrate your HR knowledge into alternative revenue streams to generate extra income. As an example, you might decide to produce an eBook which can be sold on your website or via Amazon.