This article was provided by Networks 3R
The last 8 months has seen a record number of recruitment start-ups register at Companies House. Those taking the decision to launch, range from industry executives looking to utilise their sector knowledge and skills, to a growing cadre of younger recruiters wanting to make the break and do things their way. Some of these companies will launch and then close, others will choose to run ‘one man band’ lifestyle business, others will go on to build a scale a sellable asset.
So what are the deciding factors that predict success over failure and solid business growth over on man band consultancy?
Here we explore the elements that will ensure your business is in for the long-haul:
Mile Deep Inch Wide
Don’t enter the race with expectations to compete against well-funded, established generalists or what are often referred to as ‘big box’ recruitment firms that can be all things to all people. There is plenty of real estate for you to make your mark but you need to be niche and specialised – the market for generalist is crowded. Knowing what, why and where you focus is key. Really know it, own it and know your limitations. Be a knowledge service partner not an order taker.
Plan (and Plan Again)
Every business needs a business plan. You wouldn’t fly to the moon without a route, a dashboard, and some measurement of how far you’ve got to go. The plan should cover your offering, your competitors, your marketing outline, your goals and what you need to keep your ship on course. Of course then it needs to cover the financials, how much is in the tank, when will sales come in, who you enlist as crew, sources of funding, banks, friends, family, investors for example and it should detail your mile markers for your journey.
Negotiate, negotiate, negotiate
There’s a plethora of well meaning sales people eager to add you to their client list and help you get their next commission. You may be a sales professional in which case the dynamic changes and it’s easy to fall for the slick pitch especially in a sales-person-to-sales-person discussions. Offices, Funding Offers, Accounting, Websites, CRM, Email system, Marketing, Brochures, Business Cards and the must have gadgets are areas where most start ups lose fortunes. If you’re from a corporate environment, you employer probably had a whole division to help the company buy things. Be aware of the “new shiny, faster, enhanced… gadget” – let your business bed in before buying a “new shiny” – we all like the best tech but get a free road test and work it hard.
Stay Out: Once your Out – stay out
Stay in touch with friends of course but don’t expect former colleagues to be as ecstatic as you about your new client wins. Be friendly, social but they won’t want to know how good your business is doing or the flip side of their own career every time you call so understand that and keep them as friends.
Be a good leaver
Armies of lawyers are waiting for you to step a foot out of place and fighting them off is the biggest waste of time, money and energy. If you’re that good then you don’t need your database and always watch the fine print on your employment agreements. As tempting as it may be to have the final say when leaving, use good grace and save your energy and employ it to better use in your new business.
Beware of false prophets
Road test your business offering and pitch a couple of non-related clients, candidates, acquaintances or advisors. You will of course get a great reaction from people who already know you well. People who know you generally dislike pouring scorn on your idea, so find a truly neutral and independent person. They could end up being your first deal and their views will be more honest even if its not what you want to hear but if helps you build your plan and offering.
Reality Bites
Your budgets and forecasts should be realistic, indeed even slightly pessimistic. You should stress test your model and finances thoroughly. Know who your clients will be, know the fundamentals of their sector and the skills you’re sourcing for. Today’s clients can be tomorrow’s dot-bomb, that candidate’s key skills today may be redundant tomorrow.
Knowledge is King
If you are looking at funding then knowledge and relationships help greatly. There are a range of invoice discounting and factoring offerings to work through, there is shareholder agreements and co-investors to deal with and there are a number of venture funding offerings. Some short-lived start-ups go into a market segment with little knowledge or relationships to sustain them – this makes it harder to get traction and takes longer to build your business. Don’t acquire IP from previous employers. Start in an area you know well and where you have relationships and knowledge (your IP) and expand as you scale your business.
Be Front of House
If you want to really power your business then you need to be the top rain-maker – at least initially. There will be other roles you have to do during the initial period such as the chief talent attraction manager, the marketing guru as well as being the bank funder, the trainer and coach, the motivator, the ideas person. It’s good for you to be seen front of house i.e. with your team not locked away in an office. There are proven support groups (like Netwokrs3R) to help you do the back office, technology, marketing, training etc and help you stay on track – having a coach helps you focus. As soon as you have hired the right people – don’t be afraid to give them autonomy and let them fly. People didn’t join your because you had the same rules and regulations that they had in a large corporate – remember to act as an entrepreneurial business.
Enjoy and make time for FUN TIME
Starting your own business can be risky. There is a lot to get right and keep getting right. There is also a lot to distract you. Don’t lose your bottle and make sure you make the time to have fun and enjoy your journey. Owning your own business is one of the most exhilarating, enjoyable, professionally, financially and personally rewarding things you can ever do. It has to be enjoyable for your people as well so take time out to keep your business and the journey enjoyable FUN 😉
Networks 3R was founded by recruitment professionals who have launched, scaled and sold over 150 businesses in 35 countries. To discover your true potential and learn more about how our training, back office support, marketing and know how can help you scale your recruitment business call Liz Kilford on +44 203 291 3827 or email lkilford@networks3r.com on visit www.Networks3R.com to download our brochure and start your own journey.
