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3 tips for your Recruitment Agency
Something we’ve spoken on a number of occasions throughout our website is that there is no guarantee of success when you start a recruitment agency.
Which while it might seem an odd thing for Isotope to repeatedly draw to attention to, we feel it’s an important reality to remember when you are both thinking about the prospect of starting your own recruitment agency & as your progress through the many stages of being a recruitment business owner.
It’s an enjoyable journey; one filled with euphoric highs & challenging lows, tricky curveballs & multiple “home runs” & enough excitement to satisfy even your most adrenaline-fuelled recruitment consultant. But for Isotope to suggest that success is guaranteed, would be to neglect the years of experience, war-stories & anecdotes we have acquired from being so fortunate to have support recruiters in their own agencies for some time.
& over the years we’ve seen that, while every business is unique & every recruiter requires something slightly different from the Isotope support network; there are tips (& dare we say – cliché, tricks!) when it comes to launching your own recruitment business. So I guess, if you’re perhaps toying with the idea of starting your own recruitment agency, I’m asking you to spend the next 5 minutes working through the below, pen & paper to hand, with the hope that the tips below can help you as you embark on this entrepreneurial journey we know a little something about.
Despite now owning your own recruitment business & no longer chained by the shackles of employment (!), in our eyes it’s still advisable to view yourself as an employee. In other words, yes you own the business & yes you can enjoy all the perks that come with running your own business, but what we have seen to be a very successful mindset, is to have that of an employee.
One of the most effective ways to see this in practice is in how you draw “cash” out of the business. Much like it would the job of your accounts team to ensure you are drawing monies out of the business in the most tax-efficient way (generally advising to utilise your personal allowances before drawing a dividend), we would strongly advise setting yourself a fixed salary per month.
This is not to say you can’t (nor shouldn’t) enjoy the financial benefits that come with running your own recruitment business, we’re just advising against what we like to call – “emotive drawing”. Drawing monies out of the business based on that month’s success & having no thought for what might happen next month, as opposed to seeing the business as a vehicle that will be with you for the years & years to comes.
If you view the business as a separate entity, rather than your own personal “piggy bank” that you dip into every few days without any real though, we’ve seen that it’ll help you successfully manage, develop & grow your business over the years.
Finding a good accountant is simple, but finding the right accountant for your recruitment business isn’t so straightforward. But while at times the process might feel time-consuming, in our eyes it’s so important to ensure you have the right accountant (or accounts team) supporting you & your business. So take your time to find the right team for you.
In our experience, you want to find an accountant that understands the market you are in, foresees the challenges you will come up against & can advise accordingly. You may already know them, they may be a close family friend or part of an organisation you already know a little bit about; wherever you are fortunate enough to find “the one”, be sure to feel comfortable with both their genuine care, empathy & understanding of the goals & ambitions you have for your business.
You work tirelessly for years & years, in a market you love, for agencies you respect & with clients you genuinely admire. After years of an employed reality, you decide to venture out on your own, start your own recruitment agency & begin to build the business you envisioned. You assume, after respecting any post-contractual restrictions you may have, your clients will follow you – after all, you’ve worked with them for years, helped them in their hiring processes & seen the business grow with your support.
But recruitment has no set rules, it’s not rationale & therefore to suggest this is a “given” is not only wrong but an unstable foundation to build a business upon.
We aren’t saying clients won’t follow you, we are sure that many will & that’s fantastic. But if you feel an over-reliance on client loyalty, a reliance that is unweighted, that is perhaps influencing your decisions to start your own recruitment business above & beyond the genuine desire & “pull” to do so, it might not be the most suitable foundation to start a business.
While it’s good to draw confidence from that fact that you feel that clients that you’ve worked within the past will “follow you” to your own agency (restrictions dependant of course), basing your startup success on solely that is, in our eyes, not advisable.
Our advice? Base the first 12 months of projected billings in your business on solely new business; no ex-clients, no pre-existing relationships, just good ol’ new business. Having done that, ask yourself – do I still feel confident that I both can & want to do this?
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