How to fund my HR Consultancy
If you’re dreaming of launching your own HR consultancy but have concerns about funding, joining a franchise could be the solution.
Funding and finance can be tricky to navigate when finding your feet in a new venture, so it’s important to feel supported. By joining a franchise, that financial support is on offer every step of the way. Whether you’re applying for a business loan, paying your first invoice, or doing your initial bank reconciliations, The HR Dept has the expertise on hand to help.
In this article, our finance director, Lian McQuade, talks us through some of the important funding decisions that you’ll have to consider and how setting up as a franchisee (or in our case, licensee) with The HR Dept can remove so many of those initial hurdles.
Seeking a Loan
Seeking a business loan is a solid starting point for funding your own consultancy. At The HR Dept, we work with two companies who offer business loans. That existing connection means these companies already have the awareness and background of us as a franchise, so licensees are able to streamline their application process. Loan acceptances typically have a turnaround of up to five days, and up to 10 days for funding to go through.
There’s also resources like The Growth Hub, your local council, or Citizens Advice who offer valuable insight into the application process. A lot of government-backed schemes also have the benefit of not charging agreement fees upfront for new businesses.
Creating a Business Plan
Having a solid business plan can really benefit your loan application. We always recommend establishing a proper business proposal spanning up to five years, as suppliers will be looking for a substantial plan that they can fund with confidence. It’s also important to do some cash flow analysis against that plan, which you’ll receive support with as a licensee.
Suppliers will usually be looking for the following points:
- Basic information: The business name, your name, location, and contact details.
- Business overview: What’s your business about? How is it going to operate? What products or services are you offering? What’s your approach to pricing?
- Further information: What’s your vision for the future of your business? What will your day-to-day business operations look like? What are your strengths, weaknesses, and potential opportunities?
- Background information: What’s your personal and business background? What’s your experience with HR?
- Franchise information: Details of the support you’ll be receiving from the franchise network.
- Market overview: Who are your target customers? How many potential SMEs are there within your chosen territory? Beyond that, who are your competitors?
- Costs and assets: What are you going to need to get started?
- Marketing plan: How are you going to market your business?
Financial & Business Support
At The HR Dept, we understand that the first few months in your new business are key for developing your business. That’s why we don’t introduce monthly rental fees for the entirety of a licensee’s initial six months. At this point, fees are staggered; months six to 10 are kept at a lower fee, and are then capped at a set amount laid out in the three-year agreement, with no percentage of profits taken.
Licensees are also provided with an accountancy package in the first year, offering training and support, as well as VAT returns and year-end accounts.
Getting the name of your consultancy out there can cost money and time. Setting up as a licensee means that your marketing is included – written content is produced by our in-house team, which you are free to post on your social media platforms and company website, also provided by the franchise. You’ll also receive a starter pack including items such as business cards, branded merchandise and a business banner.
The HR Dept’s team of experts are on hand to supply financial advice even prior to signing up, and will continue to offer support as your business progresses. For example, when the time comes to take the next steps and you are looking to hire staff, the network is there to provide insight on this from their own experience.
The Power of Our Network
Access to a support network is incredibly useful to new licensees, as being able to tap into existing licensees’ experiences allows you to apply that knowledge to your own business.
Our licensees also receive financial support with out-of-office periods. We actively encourage our network to have regular time off for their mental wellbeing, and always offer holiday cover if anyone fancies a break and doesn’t want to be sat in the sun checking their emails. You’ll have that reassurance that your business won’t be left in the lurch during your absence.
How to Get Started
If you’re interested in signing up, our recruitment team will take you through an initial call before booking you in for a discovery day. You’ll get the chance to see how our model works and have a chat with our MD and an existing licensee.
Before committing to anything, we can offer some financial advice on cash flow projections, and what you can potentially be charging within your business.
Having the backing of a franchise network behind you can ease that initial process and bolster up your business in the long run. The HR Dept has a proven model and our growing network of HR professionals supports this.
About the author
Lian McQuade is the Finance Director at The HR Dept.
If you’re interested in becoming a licensee and funding your own consultancy, you can find out more here