This is Part 1 of three parts:
Part 3: Keeping Momentum…
People often ask me how to succeed in recruitment; how they can reach the golden horizon at the end of a £10m exit strategy. That’s everyone’s goal, though. The question I’m often asking in my head is: “Are they serious?”
Most of the time a recruiter has parachuted into their business without the vaguest idea of how it should be managed. By the time they realise they’ve landed far from their target, they’re stuck in a lifestyle earner.
And you know what? Most people are happy to have a lifestyle business. At least that’s what they tell themselves. I see a lot of bravery and potential that may be squandered for comfort.
Personally, I’d rather leave a legacy. I’d rather build a huge company where my passion shines through. Deep down – whether you’re starting out on your own or have been active for a number of years – the same feelings will reside in you too.
So join me for a new, three-part series on taking a lifestyle business much further than a cosy pay cheque. In part one, I’ll explain what I mean by this, and how you can prepare to leap over anything holding you back.
Falling into the ‘settling down’ trap
Ah, the rags-to-riches story… It holds sway over so many young recruiters. They’ve worked somewhere as top biller, and done well out of it. They’ve seen their boss trot happily to the bank, having secured tens of thousands in take-home pay each month. The problem? They have gumption, but are lacking the skills to be an entrepreneur straight out of the gate. I like their style, but fear for their leadership credentials.
Let me hit you with a few stats – such as the fact that only 1% of owners leave their recruitment business with any meaningful financial gain. 50% of recruitment startups fall on their arse during their first year; 53% of those are in London. And finally, 67% of owners earn less than they did as top biller in their old firm.
A knowledge gap tends to open up when a recruiter becomes enamoured with the idea of working for themselves. Unfortunately, they fall into it– the full cost of a desk, for example, is one of the things that gets buried in the momentum of their self-belief. Staff costs are more than basic pay. We’re talking hardware, rent, utilities, sick pay, holiday allowance… all the extra expenditure that typically ranges from £5,000-£8,000 a month.
Rigour is another trait that goes missing. The majority of businesses I speak to don’t fully appreciate the value of a cash forecast. 11 out of 12 may not know when their VATs are due. They rely on an accountant or clued-up mate to handle their finances.
Which isn’t good enough, right?
BOOM – suddenly, plans for world domination have been held back. You’re trying to claw back money all of the time. Before you know it, you’re settling for a lifestyle business, not a legacy.
How to break out and do more
However, even if you have succumbed to the lifestyle trap, you are able to change. Like an alcoholic clearing his throat at an AA meeting, the first step to recovery is admitting you were wrong.
My recent series on psychopathy in businessmay give you some tips for a fresh mindset. These articles speak about the importance of an unwavering focus on the culture you lead. Qualities such as strength, tenacity and perseverance will set you up to succeed – which may cut into more of your personal time than you’re used to.
But that’s alright. If you reconcile yourself to doing more than ‘getting by’, your kids and partner will end up with an easier life in the long run.
So my initial advice is to pluck up the courage to say, “I may need some help here.”
Try to answer the following:
What niche are you filling? The last thing the world needs is another all-comer recruitment firm that targets too many sectors at once?
When’s the last time you upgraded your technology, to make processes or lead generation easier?
How are you making your voice heard? And is it being taken seriously? Perhaps it’s time to rethink your marketing if not.
What allows you to measure and forecast growth? Track invoice collection timelines, the number of interviews you lock down, or where staff are being held up internally; chances are you’ll be lacking a key metric.
Defining your story so far is critical to changing its outcome. Imagine you’re a stranger – someone who’s never heard of your company. Convince yourself why the brand exists. Play devil’s advocate, and challenge old assumptions. Speak to other recruiters (the successful ones) and ask them to pitch their business to you. Listen to their story. Then distil your value in a similar, relatable package of qualities and specialisms.
Like Mike Tyson said, “Everyone has a plan until they get punched in the mouth.” When you know what’s coming, by having a support network and a full picture of your business, you’ll take fewer punches. That’s what we do within my community of recruitment leaders – we share ideas and help one another achieve our goals.
I can show you a way into the legacy you deserve. Look out for my second blog, which will tell you how a better form of leadership can be achieved! After all, there’s never been a sounder time than right now to earn big from the recruitment industry…