Genuine Win Win?
To plagiarize the great Roman Philosopher Marcus Cicero ‘The rule of friendship means there should be mutual sympathy, each supplying what the other lacks and trying to benefit the other, always using friendly and sincere words’.
Now, believe it or not, this is the core philosophy against which SSG has been working since the big kick off back in 2003. Of course, we didn’t put it quite as eloquently as Mr. Cicero but the basic idea is that by doing a great job for our Clients, SSG will continue to grow and together we will all prosper.
The bottom line for SSG is that any success enjoyed by SSG is merely a reflection of the success of our Clients. When you guys make placements, we earn some revenue. If we are making lots of money, then our Clients must also be enjoying that success.
As SSG revenues continue to grow, we are able to constantly reinvest into our core offering, improving the tools, talent & time we provide to our Clients, helping our lovely Clients to generate more placements and increased revenues.
This handy economic truth is neatly mirrored in terms of the collective growth of industry expertise, experience and market purchasing power shared between SSG and our Clients. The more we know, the more lessons we learn, the more we can purchase the that we all do.
Undeniable Key Facts
When our Clients generate more revenue, SSG also enjoys the uplift. When SSG earns more money, we are able to reinvest & improve our offering, helping our Clients to generate more revenue.
As SSG continues to grow so too does the quality & depth of the tools, talent & time we make available to SSG Clients, who respond with increased revenues and the on-going development of their business.
The aggregation of demand from SSG Clients for the core tools of their trade generates significant incentive for Recruitment Suppliers to cut a great deal with SSG for the provision of those tools.
What SSG knows, we share. Every Client challenge presented to SSG represents an opportunity to learn and share the solution. More problems generate more solutions providing increased shared knowledge.
How You Guys Win
By now, you probably don’t really need SSG to spout on too much about the various ways in which you might win through using SSG to launch your business free of charge? You probably also don’t need us to talk about the lack of fixed monthly costs, the super on-going support structures or the feeling of being part of something significant & strong? As for the lectures about removing your business & personal risks, solving off the wall problems, always aiming to over deliver or making it easy for you to engage with the tools, talent & time you might need – you no doubt have heard enough. So, let’s leave it with just one key point: If you want to start a recruitment business in the UK, there really is no vehicle anywhere that can offer you the depth & quality of support available through SSG. We hope that you will consider SSG when you ready to take on the world.
You have no start up costs and then you only pay a descending percentage of your billings to SSG, in the form of the SSG Service Charge schedule. That good economics for a start.
We know through years of easy maths that at any point throughout the term of our engagement with your new business, it is hugely unlikely that you will be able to reproduce the ‘tools and talent’ that you need from SSG more economically by going direct and negotiating with the various market suppliers. That’s also good economics. We also know that SSG’s buying power, industry influence, knowledge base, willingness to experiment & sheer determination to improve our offering means that economically there is no real argument to be had. That is just pure economics.
So, our objective is to make economics irrelevant. After we remove the economic discussion then our Clients can see that everything else that they receive from SSG is essentially free. More great economics!
SSG is jam packed full of extraordinary expertise – even if you don’t like us, even if you suspect that we are nerds with nothing better to think about than issues surrounding recruitment legislation, tax mitigation & legal disputes, it is hard to argue against our degree of experience in such matters.
Throughout your journey as a budding entrepreneur, you will of course face numerous recruitment related challenges (candidates, clients, drop outs & so on) but you probably feel (quite rightly) pretty confident to deal with the majority of those direct recruitment problems. What is also very likely is that you will also be faced with legal challenges, tax & accounting issues and many other non-core conundrums for which solutions are traditionally much harder to deliver.
Well, this is our favourite domain! Not only will we tackle any business related issue for you but it is probable that in over 12 years of launching & supporting over 200 recruitment businesses that we will have faced your exact same issue many times! In fact, when faced with something new, we love it! It is a chance for us to learn & share. Not so nerdy now ah?
As a budding entrepreneur looking to start and run a recruitment business, you will face a myriad of risks – some of which are obvious and some of which are not so clear cut.
Let’s start with the obvious; Launching a business alone is an expensive thing to do. It is also fraught with legal & compliance dangers. Not only do you need the cash to invest in the start up but you also need to ensure that you have sufficient expert clout to deal with the legislative challenge.
Next up come all of the risks of actually trading! You need to negotiate with all of the various suppliers, from job boards to accountants to lawyers to good old BT! You will spend lots of valuable time arguing about prices and service levels but you also often need to pay in advance for what you need (start ups are rarely welcomed by battle weary suppliers used to being let down by non-payers!).
Naturally, SSG take care of all of this. Our job is to remove risk or to reduce risk. Not just in the obvious (cash oriented) way but also in applying seasoned, extraordinary and continuous legal, accounting & business expertise to your business challenges. Every time we reduce a risk for one of our clients, we are really reducing our own business risks, so entwined are our fortunes.
How SSG Wins
SSG is a business. We need to make a profit but we really want you to know how we do that. We need to be good for our Clients. If we don’t perform for our clients, then we will lose our revenue stream and go under – no doubt about that. So, we have two core business offerings which we present to the recruitment sector and we need to make sure that we win in the same way that our Clients win. Take a look at our two models below & see if you can follow our logic (I bet you can!). It is important to SSG that all of our Clients (present & future) understand how we win too.
SSG’s Traditional Offering
SSG wins in a number of ways from supporting our Clients through our traditional model. Obviously, we hope to make a profit via the Service Charge Schedule each Client operates against. No mystery there!
Logically, as long as the aggregate Service Charges exceed the aggregate cost of supporting our Client base, we will make a profit. Simple logic and to an extent it is logic that serves us well. The more Clients that we support, the less we need to charge as the years pass & the more likely we are to retain existing clients.
But we also win through our position as a conduit of expertise – our diverse Client base ensures that not only do we need to consistently solve an equally diverse range of recruitment & business related problems but as we do so, our knowledge base also grows. We have found this process immensely rewarding since 2003 and now plays a significant part in our continued expansion. We really have ‘been there, seen it & solved it’.
So, bottom line economics – we hope to make our profit by generating more Service Charge revenue than we accumulate day-to-day costs!
Expanding on the theory that SSG acts as a conduit of knowledge, it is clear that unless that knowledge base is both useful and contemporary, it is redundant and of no commercial value to SSG.
Our traditional business model relies upon Service Charge revenues to generate a paper profit for SSG and upon traditional recruitment & business solutions for extending our value to our Clients. In this case, money & knowledge go hand in hand.
We absolutely understand what issues our traditional Clients are going to encounter as they define their business & as long as SSG can afford to provide the tools and solutions that they need, we will continue to prosper. So many years of experience has now provided that concrete base for SSG to operate from.
But we would not have developed that base of expertise and we would not continue to add to that reservoir of knowledge unless we faced a constant challenge from our traditional Client base to do so – if ‘Necessity is the Mother of invention’ then an SSG Client is the ‘Author of our business plan’. Day after day, the contemporary and immediate needs our Clients have dictate what SSG needs to deliver, to investigate and to understand.
If SSG has a value in the market place, then the most obvious measure of that value is how much profit the business generates every year.
Does our profit increase, does it looks steady, can we continue to grow, are we reliant upon any one market sector and so on, but fundamentally, are we making money as a business?.
So, for SSG, it is really simple: in supporting our Client base in our traditional way, do we collect more Service Charge revenue that we spend in supporting that Client base?
If the answer is yes, then we ought to be happy. If the answer is yes & we can see how to generate more revenue across an expanded Client base whilst simultaneously improving our core offering, then fantastic.
For SSG, the value in supporting our Client base through our traditional model is focussed upon the economics of trying to make a profit & on the philosophy of trying to expand our intellectual offering. Both sides of that equation are working nicely.
SSG’s Equity Investment
Our traditional support model relies upon our ability to delivery excellent services for less revenue than the aggregate Service Charge Schedule generates. However, this is not the economics of the Equity Investment side of SSG.
When SSG becomes a Minority Shareholder in a new business, we accept that we are in a very long haul relationship now! We also have to accept that the Service Charges generated by our Equity Investment projects are unlikely to aggregate into a day-to-day profit (as part of the Equity offering involves a reduction in the Service Charge to part fund the growth of that business).
Our potential financial reward for taking this calculated gamble into an equity investment remains rooted in the hope of generating an exit somewhere down the line (in other words, helping our budding entrepreneur to one day sell their business & so create a financial reward for our Minority shareholding).
In addition, SSG hopes to benefit from a dividend stream of income if the new business provides a solid & reliable income for our partner – which is the absolute norm. So, long story short, we swap the Service Charge Schedule profit associated with our traditional offering for long term potential & medium term dividends. Does that all make sense?
Acting as a Minority Shareholder & a support business really are two different jobs! Although both roles appear (& to a large extent are) complimentary, the skills base required is very different.
Our traditional support model provides SSG with no equity, no formal input mechanism and relies upon our partners wanting to engage with SSG. The equity investment scenario is different in that we have the mini-rights attached to our minority position to at least present our advice and guide the business in an active way.
So, SSG moves from one formulae of support to a more ‘Non-Executive’ role & this subtle but real shift generates a need for some serious ‘Shareholder Support’ functionality within SSG.
The great news is that the theory of SSG accumulating knowledge and skills through the need to provide support to a myriad of recruitment businesses still holds true, just with a new twist.
We are very careful to appreciate the difference in our roles and employ talent at SSG who are more focussed on one side of the SSG business than the other. Either way, our knowledge base continues to grow and that generates value for SSG, no question.
As you know, the traditional SSG business model ought to generate a value for SSG which is both financial & philosophical (i.e. the classic combination of cash & knowledge).
In accepting that the Equity Investment side of our business is unlikely to generate the same financial rewards and value (as the Service Charges are diminished as part of the alternative offering) we need to identify the potential value elsewhere.
The way in which we do this is to work hard with our equity partners to build a business which carries an asset value – in other words, we need to help to build a business which could one day generate a sales value, in which we would share a benefit of course.
This means that the aggregate value of SSG ought to be the profit of the SSG’s traditional model plus the value of the minority equity positions SSG enjoys on the other side of our business.
Whilst it may seem a great theory (& perhaps nothing more!), we are happy to report that in working so hard alongside our equity ventures some real, asset values have already been realised by our lucky partner Recruiters.
And, in line with everything that we try to do, if we win then our Clients have to win & if our Clients win, then we are likely to win too!