Making the jump to start a recruitment agency or push your business through to the next growth phase takes guts. But one mistake a lot of us make is to underestimate the important role that timing can play in determining whether your risk pays off.
Let’s take a look at some indicators that say 2020 could be your year!
The economic clock is in a boom phase
The Economic Clock (also known as the Investment Clock) was first published back in the 1930s, but it remains a clear and useful guide for making decisions about starting and/or growing your business today.
In an eBook we published earlier this year, I ‘recruitified’ the key stages of the clock to make it more applicable to how our industry works. If you consider what’s happening in the market right now, I’m pretty sure you’ll agree we’re firmly in the ‘boom phase’, indicating that now is a great time to grow your recruitment business – or start your own.
Some indicators that we’re currently in boom stage:
- Unemployment in the UK is has remained historically low over the last few years (dropping to its lowest level of 3.8% in 2019), so there’s plenty of opportunity there for recruiters
- Company growth is generally motoring
- Companies are hiring in their volumes
- Property costs and availability still achievable
- Interest rates remain low
All of the above are great indicators that now’ is the perfect time to push your businesses forward and a guarantee that there will be lots of opportunities for you to capitalise on demand.
It’s a great time to be a small fish in a big pond
There’s no denying that the market is pretty crowded at the moment. According to recent data by ClearlyPR, as many as 1800 new recruitment agencies launched in the first three months of 2018 alone!
But interestingly, you don’t need to be a big-time player to compete in this market if you’re innovating in your niche.
And with recruitment software, marketing automation and recruitment AI all smashing their way on to the market for us to capitalise on, the possibility to do things differently and better than agencies twenty times your size are at your fingertips.
Remember that it’s so much harder and takes a lot more time for a larger agency to implement the latest technology into their business, whereas a new business owner can evaluate, select and implement new software and strategies before a larger company can even organise a meeting to discuss a change in direction!
This is such a strong advantage for an SME agency so make sure you work innovation and technology into your pitch as a true USP. But please - make sure you’re not just chatting hot air and make sure you establish a strong ‘market-product fit’, so to speak: Establish your niche target clients’ challenge, offer a solution and most importantly – do it better than everyone else.
If you don’t get this right the market will simply knock you down...
Easier access to cash
I’m making this my final point but in reality we all know how important cash is, and it’s probably the biggest thing on your mind when taking the plunge with your business.
Yes, the market might be in excellent shape and sure, there’s a raft of technology available to help you differentiate yourself from your competitors – but if you really want to get a business to scale, you’ll need access to cash.
But the good news is, starting a recruitment agency is a lot cheaper than it used to be. I remember when I started my first business back in 2004 and I had to have a minimum of £25k just to get started with building a website, selecting a recruitment CRM, buying accountancy software, designing my logo, stationery and renting city centre office address. These days it can be done for under £5k all in!
However, lack of capital is still the key reason cited for why 1 in 3 business don’t survive past the two-year mark. Essentially, if you’re planning on starting a business, you need to make sure you have savings for at least six months-worth of rainy days or consider raising capital.
And the other good news on that front is that investors currently have a strong interest in the recruitment sector! In a recent market report from BDO, the rise in available debt and equity funding available is continuing and the market is evolving to offer alternative funding such as unitranche debt - showing that confidence in the recruitment sector is not waning.
If you’re reading this and you’ve taken the plunge recently or are thinking of making the jump into entrepreneurial stardom - hats off to you! One quote that’s got me through my years of businesses ownership is this:
“If it was easy, everyone would do it!”
So I’m not going to lie to you – there will be times where you’ll think, “Jeez, what I have done?”.
And be prepared to make sacrifices, give holidays a miss and potentially take very little money home at the start.
But if you pick your positioning on the market correctly, starting or expanding your recruitment business in 2020 will stand you in good stead for success and could be a great opportunity to establish yourself as a really strong competitor on the market.
Download the eBook below to find out which business model is right for your business.
Wendy McDougall is Chief Fish of Firefish Software. In her spare time, you'll find her playing squash or feeding her inner geek with the latest technology!