Top tips for start-up umbrella companies
Setting up a new umbrella company? However experienced you are in payroll, it’s a unique employment model that requires special care to enable success.
Our six top tips for umbrella start-ups will help you hit the ground running. Let’s get started!
1. Know the market inside out
You might think you understand the umbrella market, but do you fully understand the undertaking of offering the unique employment structure? We’ve spoken to many accounting providers who have chosen to set up an umbrella company to diversify their services, however they’re often surprised by the number of differences to typical accounting.
Aside from seeking the services of a tax or industry specialist, it’s worth familiarising yourself with the common topics that umbrella contractors deal with. Check out relevant groups and forums to stay in the know – here are some places to get started:
As part of your wider market research, consider the fees your competitors charge for their umbrella service. On paper, the margin you take is the only thing that sets your company apart from other trustworthy options. Your other focal point should be on delivering an excellent service – i.e. payments on time, availability on call and email, ensuring payslip access, and so on. Those are just some of the ways we’ve seen umbrella companies fall short.
2. Clue up on regulations that protect contractors
The umbrella market receives some bad press due to a very small number of fraudulent operations. That means as a start-up, you must have in-depth knowledge of all the laws and requirements for umbrella companies to fulfil their tax duties.
This also includes making sure the employees working under your umbrella company are on board with all the requirements. A consultant and regular training should be necessary to ensure you’re meeting all current requirements and to plan for the ever-changing market.
Compliance needs to be your number one consideration as a new umbrella company – as would be the case with any payroll company. In particular, ensuring your employees’ timesheets, deductions, expenses, and holidays are dealt with in line with legislation.
3. Get recognised by leading bodies
As part of the approval process, the body will audit your practices and highlight anything that needs to be remedied. As a result, you’ll benefit from optimising your business, and in return receive a seal of approval that demonstrates that you’re a trusted and legitimate player in the market.
4. Get real reviews
Contractors are cautious about selecting an umbrella company and conduct research to prevent choosing a provider that doesn’t offer the expected levels of service. And that’s totally understandable – you wouldn’t become an employee of a business without ensuring you’ll get paid accurately and on time, either.
If you have no reviews, there’s no social proof to entice new contractors. Trustpilot and Google My Business are the top platforms for payment companies to get reviews, and your ratings will be visible when a contractor searches for your company name.
The caveat of getting reviews is, of course, opening up the possibility of receiving poor ratings and impacting your reputation. The obvious way to avoid this is by preventing poor experiences in the first place – however, that isn’t always possible.
A good time to prompt reviews is after a successful customer service interaction and via your email campaigns. If a negative review is received, respond to it with a positive and actionable message that acknowledges the issue at hand. Great customer resolution can quell the impact of a bad review – while an accusatory, deflective response will never go down well.
5. Make your website your portfolio
The accounting industry is relatively behind when it comes to having attractive and useful websites. Bring your offering into the 21st century with a modern website that positions you with an authoritative voice. If you don’t have IT or copywriting capabilities in-house, you may need to invest in freelance support to ensure you have an eye-pleasing, functional site with well-written content.
While there’s no denying that well-written content goes far, a modern website design is more impactful than you think. 75% of consumers judge a company’s credibility based on their website design.
If you have the resource or budget to create website resources like blogs, brochures, and helpful guides for contractors, these will also go a long way in adding credibility too.
A pay calculator on your website is a handy tool for new and existing contractors, allowing them to run pay calculations in seconds. Download our free instruction manual on how to add a pay calculator to your site in a few easy steps.
6. Make your payroll software count
Umbrella companies have unique payroll requirements to reflect the employment relationship with contractors. This means standard accounting software simply doesn’t cut the mustard. Luckily, there are a number of solutions designed especially for umbrella companies.
This software is designed to pay unlimited workers across different agencies and end clients without delay or disruption in accordance with necessary payroll legislation.
Codapay is a leading umbrella payroll software provider, offering unparalleled speed and flexibility. Process payroll for an unlimited number of workers in just seconds, and only pay for one license regardless the number of users. Get the lowdown on our software and book a free demo today.