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Every year thousands of new recruitment agencies launch in the UK, intended as a vehicle for personal wealth creation for the founders.
Yet despite their objectives, vast numbers of the recruitment businesses founded each year fail to ever evolve beyond a few full-time staff.
What’s behind this stagnation, and how can you as a start-up founder hope to avoid it?
If you’re starting a recruitment agency with plans to push past early-phase growth pains, make sure you’re not caught out by the below.

#1 – They think small, act small, stay small

In the first few months of any business, things are a scramble.

Revenue is top priority, and many critical internal processes are sellotaped together to ensure that the company can focus on winning and retaining customers first and foremost. 

Getting out of that unstructured mindset can be tricky, however, and agencies who continue to think and act ‘small’ in the way they approach their internal processes tend to remain small in the long term.

It doesn’t seem worth building out enterprise-grade resources, technology and infrastructure for a small team. 

In the long run, however, this way of thinking can prove not just a false economy but a significant handicap to scaling a business.

In contrast, agencies which think big and build on a platform optimised for scale often find that they achieve this growth much faster.

#2 – They isolate themselves from learning

Starting your own business is all about independence, and founders who have thrown off the shackles of employment for the first time thrive on the opportunity to build their companies on their terms.

At the same time, however, creating a company can be a lonely journey, with inexperienced founders at risk of committing expensive mistakes in a slow and exhausting trial-and-error growth curve.

Many business owners find out frustratingly late about the cost- or time-saving tools they could have been using, or simple best practices which could have accelerated their corporate development by years and resulted in hundreds of thousands of pounds of additional revenue.

A partnership with industry experts who have successfully run and scaled recruitment agencies alleviates this burden, as do communities and events which bring together recruitment owners facing similar challenges to share ideas, best practices and solutions.

#3 – They fail to unlock investment potential

There’s often a lot of confusion around business financing and the options available to companies for supporting growth with outside capital.

Agencies with well-constructed, scalable processes and a thriving market can fast-forward their expansion by years with the right financial support, but for lots of founders this possibility is never explored.

Through lack of contacts and confidence in the topic of investment, many owners with high-potential businesses miss opportunities to turbocharge their development and leap-frog their competition, instead choosing to restrict growth to the pace allowed by their own cash resources.

Understanding financing options, the pros and cons of different models, and building an awareness of how different debt and equity funding options work in business is crucial to making the right decisions when the time comes to accelerate growth.

How does it work?