01442 937 77401442 937 774

hello@wearessg.com hello@wearessg.com

108 High Street 108 High St, Berkhamsted

108 High Street Mon-Sun 7.30-21.00


4 Mistakes a Start-Up Recruitment Business Can Make

by max jones/ Wednesday 11th october 2017

A list of 4 thinks every recruitment entrepreneur should avoid doing before launching their own start-up recruitment business

You’re a recruitment start-up; you’re full of ambition, motivation and passion for the journey you are about to embark on. You’ve spent months if not years toying with the idea of starting your own recruitment business and you’ve finally decided to make the leap – congratulations.

But for all the excitement, enthusiasm and “get up and go” there are areas, would you be willing to buy this theory, where businesses can get caught. Over the years SSG has seen first-hand the many pitfalls and hurdles that recruiters are met with in their own agencies and we’d have to be idiots not to have picked up a few tips and tricks when it comes to avoiding them.

But even before that, we need to identify them. Here are 4 common mistakes that every start-up recruitment business can be guilty of during the initial stages of their development.

Failure to understand your "start-up" WHY

Unlimited earning potential, 100% ownership, asset growth, ideal work/life balance, financial security, flexibility and autonomy…

Heck, running your own business sounds great, doesn’t it?

But you and I know that the harsh realities are that starting your own recruitment business is tough. It’s a hard slog and one that you need to understand why you are doing it, in order to get the most out of it. You need to understand clearly in your mind what it is you are looking to achieve in your own business, what you feel that will give you and why you are looking to make the tantalising leap and start to build your own agency.

Failure to understand the importance of Cash Flow

For this, I feel it would be more appropriate to focus on the business's cash flow, rather than your personal cash flow during the early stages of your business. Why? Because failure to really understand cash flow in your business tends to be a silent killer of any small business.

Making placements are great, ring that bell with pride! But, you know and I know, a placement is never really a placement until you raise your invoice, control the next 30/60 days and get that cash in. If Candidate is King then Cash is, well, Ruler of the King!

One of the biggest mistakes a small business can make is not to respect your Cash Flow. The best way to overcome this is to have a trusted accountant or accounts team around you that you can trust will manage your P&Ls, Cash Flow and invoicing processes so that those fantastic early-doors placements aren’t made for nothing.

Failure to attract candidates

OK – let’s say you have the best infrastructure around you; watertight compliance processes, a fantastic back office set of provisions to help you and an amazing optimised website that presents your brand in the perfect way. Fantastic!

But, for all this, if you don’t master attracting candidates and ultimately making placements then everything falls by the wayside. What became very evident early on in the development of SSG was this very point, that many reasons some recruitment agencies tend to fail is down to their lack of appreciation (or focus) about how difficult attracting the right type of candidates actually is.

Failure to both attract them or track them once you find them, means that from a business perspective you don’t really know what channels are really working for you.

Failure to have the right infrastructure

Over the last decade and a half, SSG have been very fortunate to have supported some fantastic agencies; from effective one-man bands, to fully fledged recruitment agencies that then sell. Whatever scale, whatever ambition and whatever motivations that individual has, we always approach it in the same vein - with the absolute understanding that, regardless of what “it” is they’re looking to do, the physical infrastructure behind them needs to be as rigorous, exact and efficient as possible.

Failure to understand, or more so appreciate the importance of a rigorous back-office setup, a water-tight compliance and legal process, an effective CRM system and so on – does leave recruitment start-ups vulnerable to either spreading themselves too thin or focussing so much on the recruitment, that the infrastructure around them is not strong enough to support them.

Thank you so much for reading this article on wearessg.com

If you know anyone who would benefit from these words of wisdom...

...remember that sharing is caring!