If your new recruitment agency is very lucky, you may have made enough placements to cover costs in three months of starting, but six months is far more common – even if you have plenty of contacts in your address book right from the start and all the paperwork, funding, and dunning cycle are in place and work perfectly from the off.
Your business plan needs to be designed to survive for at least those first six months – or you’re gambling for the highest stakes.
You want to make sure your chances of survival are as high as possible – so TBOS have put together a list of key points to hit.
Hit the Ground Running
The more ongoing placements you make in the first month, the less you dip into the red each month – and that buys a lot of time. Focus your energy on contacts anywhere you know is planning to recruit deep; getting more of those placements early on could be the difference maker.
Keep an Eye on Financing Caps
The higher the cap on your financing arrangements, the higher the fees, and any smart Director of a new agency will have worked to keep their fees low.
Believe it or not, though, more than one Director has been so focused on keeping the cap low that their agency couldn’t fund all the placements they needed to break even – and that’s a key mistake you just shouldn’t make.
Even experienced recruiters, starting up their own agencies, don’t always realise how much the name of their old agency added to their own reputation.
You don’t have that support any more, and far less of your contractor pool will come to you rather than you going to them. Get your name out there, get yourself busy, and rebuild that network.
Be Realistic About Working Time
A smart Director knows where their skills lie and where it’ll take them longer to achieve the same effects. Make sure your schedule has enough time to do a fine job even in their weak areas.
Be Honest About Your Bottom Line
Obviously we hope that your agency lands in the black as quickly as possible – but as a Director you need to be smart about the early days. Making the call to pull the plug in time to save some of your investment can be tricky – and it’s just as bad to realise while you’re wrapping up the paperwork that one or two more placements would have turned the corner for you.
Keep an eye on your bank balance and keep an eye on how quickly income is rising. Don’t pull the plug while you can still make it – but don’t be blind to the right time to walk away.
Making sure you have the right plan in place can change everything.