Setting Up An Agency

**AtW** · 13 October 2006, 10:16

If you can't handle a simple tat shop, what makes you think that you can handle business that actually requires to communicate with sophisticated customers?

Stick to selling Tai tat - you are not good at it, but at least it keeps you off the street.

hth

**MarillionFan** · 13 October 2006, 10:17

yawn.

AtW you bore me.

**Lucifer Box** · 13 October 2006, 10:18

Originally posted by MarillionFan

I think it is Scots who does something a little along these lines.

What sort of cash flow do you think you need to set up an agency, and do you need a flash cocky type to do it?

Do you think they're are that many 'one man bands' around these days?

I suppose there's no reason why you couldn't re-factor the debt yourself. Obviously this eats into your profits, but as long as you could put some security up might let you get started with a smaller cashflow than you might think.

**MarillionFan** · 13 October 2006, 10:21

You still have to get contracts etc. The business is unregulated and you need to have the hide of a rhino, but the question is, has the days of one man bands vanished.

I do know one guy who places perms, who can make £10-£25k on one placement and he reckons that given 4 a year he doenst have to work that hard - but not sure if I could prositute myself in that way.

**BoredBloke** · 13 October 2006, 10:24

What you do is get a bank to agree to bankroll it becuase the cash flow is the thing which will kill it. Then you look to hiring agents from other agencies. When they move they will do so with their contacts list, nicked from their previous employer.

I know somebody who works for a small agency and that was how it was setup - 3 contractors got together and formed it and got an agent to do the donkey work. You offer the agent a small wage but a big cut in the comission to get them pulling the work in.

**AtW** · 13 October 2006, 10:28

Originally posted by TonyEnglish

You offer the agent a small wage but a big cut in the comission to get them pulling the work in.

That's how they get people to lie on the phone and do anything because if they don't they won't earn a dime and get fired: this kind (too heavily geared towards commission) of schemes should be illegal in principle and any mis-deed by the agent should be immediately reflected onto the company in question who coerced them into lieing.

Originally posted by TonyEnglish

When they move they will do so with their contacts list, nicked from their previous employer.

Sueable and easily winnable in court: if he testifies in court that the new company encouraged him to do so then that will be the end of it.

**MarillionFan** · 13 October 2006, 10:36

AtW Stop commenting. You are a moron and showing yourself up. Havent you got a search engine to debug or something.

So what do you reckon for cash flow then.

One contractor £8k per month. Say three months to cover cash flow for agency invoice to be paid as you pay regularly. So £24k per contractor.

15% Commission per contractor = £1200 per month
Agent wants to earn 50k per annum?!?! (5k per month)
Office+ PHones £1k per month

So you need 5 contractors to break even. 10 Makes loads

So 6k per month on an outlay of 240k(p/a).

You can see that if for example one contractor decides to sue you for wrongful dismissal, or the client goes under or doesnt pay then you could be in the tulip quite quickly.

**Lucifer Box** · 13 October 2006, 10:39

Originally posted by MarillionFan

You can see that if for example one contractor decides to sue you for wrongful dismissal, or the client goes under or doesnt pay then you could be in the tulip quite quickly.

That's why it might pay to re-factor the debt to start with. Because you can be as sure as a sure thing your clients will pay you late - 90 days after invoice submission is probably the best you could hope for as a startup.

**BoredBloke** · 13 October 2006, 10:49

Much depends on the payment terms with the end client. When I worked direct to GSK, I was on their standard payment terms of 4 weeks after the invoice was recieved. That is not a million miles away from what some agencies offer their contractors. In those circumstances, then cash flow is not much of an issue. Where it becomes a problem is where the end company pays once a quarter - In all cases you could pay to get a factoring service involved. I even had one contract with a agency where the agency was paid by another agency on the clients preferred supplier list.

"That's how they get people to lie on the phone and do anything because if they don't they won't earn a dime and get fired: this kind (too heavily geared towards commission) of schemes should be illegal in principle and any mis-deed by the agent should be immediately reflected onto the company in question who coerced them into lieing."

He didn't ask how to set up a 'nice play by the rules agency'.

"Sueable and easily winnable in court: if he testifies in court that the new company encouraged him to do so then that will be the end of it."

But it does happen - I know loads of agents who have moved to different agencies and who have taken a listing of contractors and clients with them. It is not easily winnable in court. The all the new agency has to do is deny the allegation that they encouraged the agent to bring the new contact info. The act itself would have been carried out by the agent not the new agency.

In the same way that a person buying a car on the cheap which turns out to be stolen is not usually sent to prison - the thief is the one who gets sent down or tagged these days!

Setting Up An Agency