If you are the owner of a recruitment agency, you may have found yourself looking at your business bank account, wondering why there is so little to show for working harder than you have ever done.
The truth is that you aren’t alone.
It’s one of the most common features of running a recruitment business, especially when the headcount is less than 10. Once you get beyond that threshold it tends to get easier as owners can typically afford to hire their own back-office support staff.
So how do you manage this better and what should you measure?
As recruiters we are usually (or should be!) brilliant at managing the candidates and clients but is running the back office our strength? From experience of working with a number of agency owners I would say its generally not. Spending time on things that don’t contribute to growth (candidates and clients) is setting a business up to fail. Every business leader should be networking with candidates and or building client relationships after all it’s your business and you are accountable for it.
Where this tends to go wrong is that owners don’t use or have access to the right data to enable them to do this and that’s where the phrase cash rich but profit poor springs to mind.
To help here is a few suggestions to avoid that trap.
First and foremost every business owner should know their breakeven point….down to the last penny.
Secondly you must have a budget. As recruiters we love exceeding targets.
Reports that you will need to run your business better:
This is just my personal hotlist and I know there are many more that equally help. If you can’t get access to this data quickly pay someone to do it for you. If you have an accountant, they should be doing some of the above for you already.
Lastly as an SME owner you probably won’t be able to afford a Finance Director but there are people who will hold monthly / hourly finance reviews with you to help you keep you on track. Stick to what you are best at doing, recruiting and leave the rest to people that can do it better and quicker than you.
More on this subject and a slightly different perspective can be read here.