A business is most likely to fail in the first two years. Founders do what they need to, in order to get through those difficult early years. After getting through these tough times, some business owners will start to relax. They may start to think about how to grow a recruitment agency: with more staff, bigger premises, outsourcing, et cetera. But this is precisely the time when an agency can come unstuck. Expenses increase and, if the income isn’t there to support them, the agency will falter.
Start-up founders know they need to keep things in check if they want to take their business to the next step. By maintaining this same mentality you can learn how to grow a recruitment agency without taking on a load of additional risk.
1. Keeping it Lean
Cash flow is the biggest killer of businesses. If you start to let the expenses creep up and you have a few poor months of income, you can quickly find yourself in cash flow dangerous waters. Even when you have some cash in the bank, don’t be complacent. Before you buy anything or commit to an expense, ask yourself if you really need it or are there cheaper alternatives?
One of the big expenses is premises. Ask yourself if you really need an expensive shop-front or can you use shared premises for a little longer? Clients are rarely impressed by street addresses and flash office fit-outs; they’re far more concerned about what value you can provide for their business.
2. Only increase staff when you really need to
Many recruitment agencies think that another one or two staff members will grow their business exponentially faster. An agency founder will look at their results and imagine what it would be like if they had another clone or two of themselves. Owners forget to consider that an employee may not achieve the same results they do.
Don’t forget that a new employee takes time to train (including your time which was previously spent earning income for the agency). It may take time for clients to get to know and trust your new agent so it’s likely that a new employee will take months to break-even and start generating any real income.
If it’s admin staff that you need consider whether a full-time employee working from your office is really necessary. You may really only need a part-timer to complete the tasks that you currently have. You may also consider having the work completed by someone working from home – so you don’t need that additional office space. There’s also the possibility of hiring a virtual assistant so that you are only paying for the time and work you need especially if it’s sporadic. A virtual assistant particularly if they are in the same country as you can answer your phone and respond to your email. An overseas virtual assistant may be cheaper and be able to do data entry, bookkeeping and social media tasks.
3. Know your clients
As your agency has grown and the number of clients has doubled even quadrupled in the last few years, clients shouldn’t be treated any differently than they were when you only had a few clients. Sure you don’t need to over service them like you did in the early days but don’t forget to treat them as if you were a new business owner with only a small number of clients.
Make sure they know that they are valued and take the time to get to know them on a personal level. If a client provides details about their family make a note in your CRM that he has two primary school aged children and ask after them when you next meet. Your clients will appreciate your interest in them. Communicate with clients as often as you can. By all means send a regular enewsletter but also try to include some personal communications. Perhaps make a commitment to telephone a small number of clients each week or send them a personal email in addition to your enewsletter. Send a hand-written Christmas card or personally deliver a gift to their office. It’s the little things that clients remember.
4. How to grow a recruitment agency with technology
Even better than employing more staff, use technology instead of man hours. The improvement in recruitment software technology in the past few years has meant far fewer man-hours are required to do what a highly developed system can do for your business. Searching for the best candidates, scheduling interviews, keeping in touch with clients and past candidates can all be done with the click of a mouse rather than a team of people. Do your research and use the best apps and software for your agency.
5. Don’t copy your competitors
When you start to examine how to grow a recruitment agency, it can be tempting to copy your competitors. They’re successful and may have been in business much longer than you so you think you can take your agency to their level by replicating some of their marketing materials, their niche or pricing structure. You like the look of a competitor’s website and think they won’t notice if you pinch a paragraph or two from each page. Don’t do it. It’s embarrassing and detrimental to your business if you’re found out. It’s unfair to your clients and competitors. Your potential clients want to know what you offer not what another agency does.
You may decide to go after a niche that a competitor has been successful in. Ask yourself if you are going after that niche because you are genuinely interested in it or because you’ve heard that a competitor is doing well in that space. If it’s the latter then carefully consider if your competitor already has the market sewn up and breaking in will be difficult. Find a niche of your own or offer something different to your competitor.
6. Be prepared to change quickly
Start-up founders don’t keep doing the same thing over if it’s not working. They have the attitude that if something isn’t working they should try something different and quick. They don’t have the luxury of endless resources and time and neither do most recruitment agencies trying to grow their business. If a social media channel is taking away time and not providing the results, either try a different strategy with that channel or delete it. If your system of organizing interviews feels more time consuming than it should, try a new system or delegate the task so you can concentrate on higher value tasks.
Keep in mind a founder’s mindset and you could find your agency growing without the stress.