How much do I need to start a recruitment company? Part 2
Welcome back! How’s your week been so far? Tell me – have you had a chance to think about the business you want to create?
You might remember last week we rambled on about how SSG has committed to enabling recruiters to launch their own recruitment agencies for the past 14 years. You might also remember that SSG commits to not only launching that agency, but also supporting that agency as it naturally progresses towards whatever end goal that particular business owner has in mind. & having had the privilege of supporting more than 300 companies, from over 34 sectors, SSG appreciates that the specific tools & support each venture needs, is very unique to them.
SSG have also been able to identify that the “Money Puzzle” often stops recruiters from making the exciting leap & restricts entrepreneurial recruiters achieving the long-term ambitions they have for themselves, their friends & their family. Last week we were able to present a clear plan for any recruiter who is looking to find out how much money they would need to put aside in preparation for launching their own business. In this week’s blog, we will attack the age-old question – how do we solve the Money Puzzle? In other words, where is that “hard cash” going to come from?
The Money what?
Plan ahead, save up, & build a fighting fund. Sacrifice an all-inclusive holiday to Greece for the long-term benefits of working for yourself. Easy peasy!
We appreciate that this might seem like the most obvious solution in the world & if a Recruiter was serious, focused & absolutely committed to starting their own business then prior planning would be as logical as putting your socks on in the morning. Maybe, for SSG, this prior planning & this clear indication of commitment to business ownership would make SSG feel more comfortable with investing their time, tools & talent into a recruiter with that type of focus.
Then again, maybe SSG understand that all successful recruiters have financial commitments that aren’t appreciative to the long-term ambitions of that individual! Maybe SSG appreciate that sometimes the opportunity to start your own business simply presents itself to you, maybe you weren’t planning to do it but things change, people change, & what was once not important – becomes an absolute must. SSG appreciate that, in the real world, saving money just isn’t that practical, nor easy!
But, if the government came along & put an additional 20% tax on your income – what would you do? You’d whine, you’d moan, you’d write a strongly worded email (& even take to social media to voice your disgust) but then, you’d pay it… some of the most successful ventures we’ve had over the years have done just that. Put an additional personal tax upon themselves, taken it out at source & put it direct into a “fighting fund pot” for their own business.
2. The Bank
The days of the evil Banks are gone. In fact, getting a small business loan is a practical solution for many recruiters. Perhaps it is a route worth considering?
And whilst none of us like the idea of officially being in debt to someone, it is of course a very obvious & straight forward route to solving the Money Puzzle. Ironically enough, if you were to approach the bank & explain that you would like to risk (maybe) £10,000 of their money to start your own recruitment agency – they might be a little cautious to lend you the money, above you suggesting you wanted £20,000 to take your family to New Zealand.
But that fact of the matter is, with a decent credit history & a risk adverse attitude, asking your bank to loan you anything from £1,000 to £10,000 over a 2/3 year period might not seem that much of a hardship. & after all, a bank loan is certainly a cheaper way of raising the money than using the “trusty” credit card. Perhaps a route you’d like SSG to help you explore?
3. Family Help
They say that there is nothing stronger in life than a mother’s love. What a way to test that old adage by asking your trusted family members to help raise the capital needed to fulfil a life-long dream of yours. Draw on those heart strings!
Your Dad loves you. Your sister (while she doesn’t admit it) thinks you’re fantastic. & your brother – heck, that guy just wants to be you! Why not accept their heartfelt financial support to help you fulfil a dream that will just light them up with joy & happiness for you? After all, you’re 100% committed to success & you know that with the right support, focus & care you will succeed – so, where’s the risk?
But, understandably for many people, this would be the last route they would suggest. What happens if something does go wrong? What happens if things go amazingly well & then they resent you for that success? Sometimes mixing family & business doesn’t work & is it really worth the risk?
We can help. We’ve helped some fantastic recruiters in the past overcome this understandable hurdle. While this business relationship might not be for everyone, why not take a look for yourself & see if you can see the value?
Long story short, SSG will commit to providing Salary Support for you to cover that infamous baked bean period. In exchange for this extra financial investment, we would look to take a Minority Share in the new business (somewhere around 20% of the venture).
This is known as the Equity Investment option & sits alongside the traditional route. SSG would look to support a business from a traditional standpoint (heavily marketed on our website I am sure you can see), & simultaneously work with that client from a shareholding perspective as a Minority stakeholder.
The benefits? This would be a loan to your business, not some sort of weird & wonderful financial agreement. It’s a simple, honest & transparent way of SSG buying equity in a company we feel we can offer support to, above & beyond our traditional offering. This tends to be driven by the recruiter, the market they are in & whether SSG truly & honestly feel we could add far more value to that businesses bottom-line than the equity stake we are rightfully demanding.
The cons? You don’t own 100% of your venture. However, the 20% stake does not give SSG any legal say on the direction & dealings of that venture. It’s your business, you’re the Boss & you realise that in order to get you from where you are now to where you want to be, an extra financial investment from SSG might be the most effective route for you.
Money is always a problem if there is not enough of it. Money is a magnifier, it makes you more of what you already are. If you’re a giving person; with money, you’ll be an even more giving person. If you’re a grumpy so’n’so; with money, well…
Whatever strategies we help you to apply, the bottom line is that you need to make money. Any business will go under if it doesn’t make money. (Thank you for the breakthrough thought there SSG!)However you look to solve the Money Puzzle, let SSG help you solve it. Talk to us, engage with us & let us help you – we have the tools, we have the talent & sure as heck we have the experience behind us to know what the best route is for you & how best for you to get there.