The RIGHT BUSINESS MODEL AND NICHE

• One of the best practices in starting a small recruiting agency is to for the startup to focus on what they are good at and stay in a niche. This applies to both expertise and business model.
• Business Model: There are recruiting agencies that only place their candidates on a direct hire employment/full-time basis, agencies that place candidates on a contract part-time/temporary basis, and those that do both. Focusing on one of these might be a good place to start. The company can decide to expand to both services later. 
• Expertise/Niche: A recruiting startup will most likely be more successful if they work within a niche with high demand. It is best to begin by focusing on a niche with employers that are having a difficult time "finding highly sought-after candidates." This is because companies in this type of niche will be more willing to pay the demanded recruiting fee.

ASSESS COMPETITION

• There are a lot of recruiting agencies. It is best practice to research the recruiting agencies in whatever city the startup will be in. This will help determine whether or not it is a saturated market in that city.
• It is also best to start a recruiting agency in a city that is not overflowing with them.
• Regardless of where the recruiting agency will be in, it helps to know what they are doing right and what they are failing at. This way, a new recruiting agency can capitalize on what others have failed to get right.
• Knowing how much other recruiting agencies in the same city charge can also help in setting up a rate.