Starting your own recruitment business is an exciting step – the chance to take command of your financial future and channel years of experience into a company that you own and control.
But the process of starting up can be clouded by lack of information, misconceptions and inaccuracies.
RecruitHub works daily with experienced recruiters who are exploring their options in entrepreneurship, fielding hundreds of questions on the best way to start and scale a recruitment business.
To help bring clarity to the process, we’re sharing our conversations and tackling 10 of the biggest myths about starting up, head-on.
Without further preamble… let’s get stuck in!
Myth #3 – Building revenue is the same as building value
A powerful driver for most agency founders is the goal of one day selling their business for a large sum.
Thousands of business owners channel decades of their lives into this pursuit, taking personal financial risks, working long hours and enduring plenty of stress along the way.
Often, however, business owners lack a defined plan detailing how they intend to create a company that is valuable when they come to sell – known as an ‘exit strategy’.
In place of this strategy is often the notion that a company which is generating revenue (or good levels of income for the founder) must be inherently valuable – a ‘multi-million-pound business’ must be worth multiple millions, surely?
In fact, the steps to building ‘value’ and simply building revenue can be very different, and the creation of shareholder value is rarely something that can be hurriedly bolted on once the revenue base is in place.
Instead, founders are better advised to shape the evolution of their companies with a clear strategy in place from the outset, focusing their time, energy and investment on key areas of business growth and development which will significantly impact their potential valuation at exit.
Unfortunately, many founders who neglect this focus (or fail to engage the guidance and advisory necessary to maximise the value of their companies) risk pouring years of their lives into businesses that are worth a fraction of what they had imagined.