Hindsight is a wonderful thing. It is also perhaps the most irritating word in the English language – who wants to be reminded of the things they could have done after they should have done them? Foresight, however, is altogether different. By learning from the experiences of others, recruitment business owners can anticipate some of the challenges that lie ahead and recognise the things they need to focus on to ensure their agency is a success.
Here we take a look at five of the most important areas of running a business that recruitment agency owners should be mindful of:
Taking on too much
Research has shown that 66% of male entrepreneurs and 61% of female business owners suffer from stress each year. So, anyone who tells you that being your own boss is easy has clearly never been their own boss. It is hard work.
As a new agency owner, the stress you experience is on a different level to what you have felt before. Now there’s the added pressure of not only trying to build the business but also learning all the things you need to know to run it too. But there is help at hand.
Rather than taking on the additional roles of chief administrator, credit controller, legal specialist and all manner of other essential yet time-consuming duties, outsource them to a specialist provider. Doing so frees you to spend more of your time growing your agency.
Not abiding by the law
We’re not suggesting that falling outside of the law is commonplace among recruitment business owners, far from it. However, some don’t necessarily take sufficient measures to ensure they are compliant in all their undertakings.
For instance, understanding the ins and outs of IR35, HMRC regulations, National Insurance Contributions, VAT, auto-enrolment and the national minimum wage were all things that someone else was responsible for in your previous agency. Now these things are your responsibility.
The law can be unforgiving and a lack of understanding or ignorance of your legal obligations will hold little sway if the tax man comes knocking on your door. So, unless you have the time (and inclination) needed to get to grips with these things, entrust them to someone else who will ensure you are always compliant.
Taking an eye off the till
Whilst deep in the throes of winning new business and invoicing clients, it is easy to think that all is going well. It probably is – on paper that is. Unless there is cash in the proverbial till, it isn’t.
Focus on building the business by all means but always be mindful of the need to ensure that your clients are paying their invoices on time. We estimate that recruiters typically wait 60-80 days from date of invoice before they see the funds hit their account. This can put unnecessary strain on the business, its people and its ability to fully service those and other clients. Having the right finance solution in place ensures a healthy cash flow and access to the funds you need, when you need them.
Chasing that elusive ‘big’ client
We see it all the time: a new recruitment business owner knows they’re a great biller and is fully aware that scoring a win with a big new client will be a dream start to their entrepreneurial journey. After all, securing a great new contract with a well-known name could soon see you competing with – and beating – your previous agency in pitches. But it could also be your undoing.
For smaller businesses, large deals can carry a greater risk in that the agency’s growth (and stability) if they are overly reliant on that one client. Chase these clients by all means and if you do win them, that’s great – by working with a specialist recruitment finance provider you will always have access to the funds you need to adequately service them. But don’t become obsessed by winning such accounts – focus on smaller, ad hoc deals that will get the money coming in sooner and more frequently.
Following the herd
Recruitment is one of the most competitive sectors of the economy. So, the need to stand out and be different to what is already out there has never been more important than now. Be selective about the fields you specialise in and the areas you serve. Even if you think there is little to separate you from your competition, after a little soul-searching you will find there probably is.