As a recruitment business owner, you have two very clear choices: do you want to consolidate your current position or grow your business? If your priority is growth (as I suspect it might be) then it is imperative to plan carefully, but more important is the need to have the right finance in place if you are to succeed.
With the new financial year underway the last few months are typically the time of year when recruiters take stock of where their businesses are now, where they want to be, and what they need to do to get there. This means assessing your strengths, your weaknesses (none of us are immune no matter how successful!), the opportunities in the year ahead and the potential threats (SWOT) which could get in the way of you achieving your business goals.
With this clear understanding, you can move to the next stage – implementation of your strategy for growth.
Growth is essentially measured in terms of turnover, profit made per hire, number of successfully placed candidates, and share of the market. But growth can only become a business reality when there is a clear understanding of how much capital is needed.
Indeed, to continue operating efficiently the business needs to consider a range of factors, such as the impact of late paying clients, how best to meet the demands of taking on additional workloads (and staff), and the impact this will have on your basic operating costs, for example. However, the challenge for recruitment owners is ensuring a healthy cash flow – without it, none of the above is possible.
Before the banking crisis, gaining access to business-critical funding was more the norm rather than the exception, but today the situation is somewhat different. Tighter financial controls and the structural changes to the banking sector that have taken place over the last couple of years, have made it more difficult for businesses to obtain the finance they so desperately need to take them to that all-important next stage.
In fact, the CBI reports that demand from SME’s for credit from banks has continued to fall since April 2012, with firms like Simplicity taking up the baton. Since the recession, we have seen a significant growth in the number of small to medium sized recruitment firms seeking alternative funding options. Short term bank loans and overdrafts are only suitable for short-term planning, whilst long-term bank loans can become a costly way of acquiring finance which could, in the end, negatively impact your bottom line rather than increase it.
There is another way – one which is tailored specifically for recruitment companies.
Simplicity ensure recruiters succeed in their growth plans by delivering solutions that combine 100% funding, outsourced payroll and credit control, debt protection and a fully comprehensive online system for temp/ contractor agencies, together with 100% finance and a unique 12 month rebate scheme for businesses focussing in the permanent market. Simplicity’s customers have access to even more specialist solutions designed to make sure they succeed when they come on board, unlike anything else in the market. Simplicity, perhaps unsurprisingly, is regarded as one of the most innovative recruitment finance specialists in the UK.
Ultimately, recruiters want their businesses to thrive rather than simply survive. And if the traditional means of funding (i.e. the banks and large finance houses) are becoming increasingly out of reach and out of touch, they should opt to partner with a finance provider who will understand them.