Test the economics and capacity
Course overview · 4 min reading + 12 min practice, estimated
Principles and method
Estimate potential engagement frequency, realistic fee structures, delivery effort, conversion uncertainty and payment timing. Use scenarios rather than invented industry averages. Include non-billable research, sales, administration and failed searches. A large headline fee may produce poor economics if delivery consumes excessive time or cash arrives late. Assess concentration risk if a small number of clients would dominate income. Model the cost of learning a new niche and the resources needed to deliver credibly. Get professional advice for tax and business structure decisions.
Worked example
A fictional £12,000 placement fee looks attractive, but the model includes two unsuccessful searches, software, research time and a payment delay. The base and downside cases produce very different cash positions.
Put it into practice
Build base and downside scenarios using explicitly fictional assumptions.
Use fictional information and keep your work in your own notes.
Compare your approach: self-review guidance
Show gross fees, relevant costs, capacity and cash timing separately. Do not present the model as a forecast until assumptions have been validated through real evidence.
Sources and further reading
Original Academy teaching and fictional examples. These references provide context, not endorsement. Edition 2026.09; updated 2026-09-24.
- CIPD: Recruitment
Professional context for the recruitment lifecycle.
- GOV.UK: Set up a business
UK starting point. Business structure and obligations depend on the circumstances.