The recruitment sector is growing…fast. The number of new agencies opening their doors for the first time is at a record high, while those – whether organically or through merger and acquisition – who are growing is at a rate not experienced since the heady days of the mid-2000s.
However, there are still some perceived stumbling blocks that prevent many would-be recruitment entrepreneurs from following through with their lightbulb moment and turning it into a practical reality.
There are many myths associated with starting a new recruitment business that simply are not true. Here we debunk five of them for you.
MYTH 1: You will never get funding
According to a recent European-wide survey more than 1 in 4 (29%) of small business owners say they have limited or no access to funding. That may be true for those seeking funding from high street lenders, but small businesses are increasingly seeking alternative funding sources.
In 2015, the alternative finance sector grew by a staggering 92%, with specialist providers such as Simplicity – who offer 100% funding for payroll, contractor and permanent placements – fast-becoming the recruitment finance partner of choice for upcoming and established recruitment businesses.
By contrast, the number of bank loan applications fell by 10% in the first half of 2016 compared to the same period the year before. Applications for business overdrafts also dipped, as the fall in applications continues its downward trend for the fifth successive year.
MYTH 2: You have to do everything yourself
Err, no. Not true. Well, it is true if you choose to run every part of your business yourself, from managing the payroll, raising invoices, chasing payment for those invoices, calculating tax and NI liabilities, and processing timesheets. And that’s just the start of it.
The more time you spend managing everyday tasks in the business, the less you spend actually working on your business. Instead of trying to do everything yourself, consider outsourcing your back office function. In doing so, you free up your time to do what you know you are the very best at – recruiting!
MYTH 3: You have to have a 3-5 year business plan
There is certainly a lot of truth in the phrase, Fail to Plan, Plan to Fail. However, to insist you need a comprehensive business plan in place that will project the future growth of your business over the next few years may be a good idea, but it is not essential.
Having a clear mission, vision and a strategy for how you will achieve your objectives is arguably the most important element of your business plan, but the rest is just padding. It is too easy to become bogged down by the finer details of a plan before you start your new business and the more time spent writing it is lost selling time.
Make a plan, but keep it realistic and achievable and treat it as a guide to keep you on track for where you want to be – the needs of you and your business will change during the course of any given year, so you need to retain a degree of flexibility not rigidity.
MYTH 4: It’s all about timing
No, it isn’t. The poet Edward Young said, “Procrastination is the thief of time.”
Think about it like this: Unemployment is at a record low; employer hiring intentions are at a record high; access to recruitment finance is easier than ever before; and, barriers to entry are lower than ever before – as demonstrated by the fact that around 125 new recruitment businesses registered with Companies House every week during the first half of 2016. The timing will never be totally right for everyone – that’s why you need to do it now.
MYTH 5: You won’t have a life
Head over to YouTube or read any of the gazillion self-help books that are available and many of them will seek to drive home the message that the only way you and your business will be successful is if you grind, grind, grind 24-7. It’s nonsense.
If you are passionate about what you do it is very easy to become consumed by your work, but most recruitment entrepreneurs will tell you that success takes a little longer than they initially thought.
There is no need to go all gung-ho from the off – go at a pace that suits you best and enables you to get the best out of yourself. Research has shown the importance of stepping away from your desk – taking invaluable time away from your work enables you to see the bigger picture, think more clearly, be more creative, and allows you to replenish the reserves you need to continue on your entrepreneurial journey.
Don’t allow yourself to be overwhelmed because once you do, you won’t actually have a life and before you know it you will be back to feeling like you are working for ‘the man’ once more.