Starting your own recruitment business may seem like daunting prospect, but with the right tools, infrastructure, and investment, you can turn your dreams into a successful reality.
In 2022, over 8,000 people took the first step towards launching their own agency. Whether motivated by financial stability, ownership, or work-life balance, the drive to work independently is a powerful force.
In this blog, we unpack 5 essential insights from Lysha Holmes’ podcast on launching your own recruitment business to help you get started.
Why has the number of recruitment startups nearly reached an all-time record?
- Post-COVID, there has been a big increase in people starting their own businesses. Over 8,000 business registrations in 2022.
- Unprecedented numbers of people have experienced independent work for the first time due to working from home.
- A lot of people have realised they can work more independently and manage their time effectively.
- In uncertain market conditions, lean and agile businesses have an advantage.
What motivates people to start recruitment businesses?
- Drive is the most important factor for those who are thinking of setting up on their own.
- People have different reasons for wanting to work independently, including financial stability, ownership, and work-life balance.
- High-performing managers or business directors may want to take their foot off the gas and spend more time with family, or they may want to embrace the digital nomad lifestyle.
Key advice for someone considering approaching a potential investor, and what steps should they take in doing so?
- The most important thing for an investor is the likelihood of early traction.
- Investors want to see a watertight route to market to mitigate the risk of failure.
- Investors look at the plan for the first placements, the early customers, the candidates to be engaged and placed, and the proposition to win business.
- Needing investment isn’t a defintive. Over 70% of the businesses that RecruitHub has launched have taken no external capital.
- The real magic happens in the first 12 months, and critically the first 6 months. Having gaps early on in the business plan is problematic as the launch phase is the critical “make or break” time.
The essential checklist for someone thinking of setting up on their own?
- Invest in a strong technology stack: Ensure that you have a strong understanding of technology and the tools you need to run a successful business.
- Focus on branding and naming: Pay attention to creating a clear brand identity, and put effort into finding the right name for your business.
- Develop a robust financial plan: Have a detailed financial forecast that takes into account all the relevant factors such as market conditions, track record, network, sales cycle, etc.
- Avoid the “fingers in ears” approach to finances: Don’t assume that everything will work out just because you’re billing more than your costs. Instead, focus on building a strong financial model to support your business.
- Make informed financial predictions: It’s easy to build an attractive financial forecast, but it’s more important to be confident that you can deliver the numbers based on all available information.
Key areas to be mindful of when starting a business in 2023
- Anticipate and respond to macro trends in business analysis and customer relationships.
- Identify which organisations and parts of the business will be impacted by a downturn or recession.
- Adapt customer relationships and outreach strategies in response to impact.
- Have an ambitious network-building program in anticipation of needing to find pockets of opportunity.
- Prepare ahead by having warm conversations and pushing doors open for future opportunities.
- Push as many doors half open as you can in anticipation that you’re going to need to go and hunt for opportunity in the event of a downturn.
Listen to the full episode here EP157: Edmund Blogg, Director of RecruitHub – Launching Your Own Recruitment Business
Looking to take your recruitment game to the next level? Our team at RecruitHub is here to help! Click here to get in touch and discuss your ideas with us. Our experts have the experience and resources to help you launch your own successful recruitment agency.