Recruiter supplement - Starting Up Your Own Recruitment Business 2018

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DREAMS INTO REALITY STARTING UP YOUR OWN RECRUITMENT BUSINESS 2018

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Support, Infrastructure & Finance to Start Up and Grow your Business 100% ßnance 100% ownership CRM Back Ofßce Online Timesheets Flexible Finance options No monthly charges Tailored to your needs Minimal start-up costs The best way to set up and run your recruitment business, now and as it grows, 3R can help you every step of the way.

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DREAMS INTO REALITY STARTING UP YOUR OWN RECRUITMENT BUSINESS

CONTENTS S P O N S O R’S STAT E M E N T This is our fourth year of sponsoring Recruiter’s Start-Up Supplement.

To coin a commonly used phrase: Where have those four years gone?

3R was founded in 2013 and started setting up new recruitment businesses in 2014.

We are very proud of the fact that most of the original 2014 start-ups are still dealing with us on a day-to-day basis. During this time our relationships have grown, as have the recruitment businesses.

The title of this year’s supplement, Dreams into Reality, seemed particularly pertinent to our 2014 entrepreneurs. These people are now owners of successful recruitment companies: they employ people, they dictate the culture of their own offices and they are now enjoying the rewards that they dreamt of four years ago!

Dreaming, however, is the easy bit. Our partners have believed in their dreams, believed in themselves, made brave decisions and worked tirelessly to eventually create the reality.

To return to my opening point: time flies!

If you are somebody who has picked up this supplement sometime over the last four years and dreamed the dream, maybe 2018 is your year to turn it into reality…

EDITOR’S COMMENT What lies ahead for you in 2018? Do you continue to drive hard to put cash in the pockets of your employers – or has the time come to take hold of your destiny and invest in your own future?

If destiny is calling , then it’s time to turn dreams into reality and start up your own recruitment business.

But before you deep dive into a sea of dreams without a lifeboat, learn from our start-up experts and experienced start-up business owners in this guide.

They’ll take you through the phases of starting up on your own, and what you can expect to experience in years one, two and three when you launch your recruitment business.

Thanks to our headline sponsor 3R for partnering with us to bring you insight from the front line.

Here’s to turning your dreams into reality!

04 Turn your dreams into reality Having the idea of running your own recruitment business is one thing; turning it into reality is quite another. Read about the three stages start-ups go through...

11 How was it for you? ... and discover the experiences and lessons learned from recruiters at the three different phases of growth

14 What I have learned along the way Daniel Lewis, founder of legal recruiter Daniel Lewis Law, explains the importance of just enjoying the experience

DeeDee Doke Editor

Mike Bowler Managing director, 3R

EDITORIAL +44 (0)20 7880 7606: Editor DeeDee Doke deedee.doke@recruiter.co.uk Contributing writers Graham Simons, Roisin Woolnough Production editor Vanessa Townsend vanessa.townsend@recruiter.co.uk Senior Designer Gary Hill Picture editor Claire Echavarry ADVERTISING +44 (0)20 7880 6213: Sales manager Paul Barron paul.barron@redactive.co.uk Senior sales executive Will Hunter william.hunter@redactive.co.uk Recruitment sales manager Dario Cappelli dario.cappelli@redactive.co.uk +44 (0)20 7880 7553 PRODUCTION +44 (0)20 7880 6209: Production executive Rachel Young rachel.young@redactive.co.uk PUBLISHING +44 (0)20 7880 8547: Publishing director Aaron Nicholls aaron.nicholls@redactive.co.uk

Redactive Publishing Ltd 78 Chamber Street, London E1 8BL 020 7880 6200

CIRCULATION and SUBSCRIPTIONS: Recruiter is the leading magazine for recruitment and resourcing professionals. To ensure each issue of Recruiter magazine is delivered to your desk or door, subscribe now at https://subs.recruiter.co.uk/subscribe. Annual subscription rate for 12 issues: £35 UK; £45 Europe and £50 Rest of the world • Recruiter is also available to people who meet our terms of control: http://bit.ly/RecruiterCC • To purchase reprints or multiple copies, or any other enquiries, please contact mysidekick@recruiter.co.uk or +44 (0)20 8950 9117 © 2018 Redactive Media Group. All rights reserved. ISSN 1475-7478

Total average net circulation between 1 July 2014 & 30 June 2015 – is also 18,667. sent to all REC members

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DRE AMS INTO RE ALIT Y: STARTING UP YOUR OWN RECRUITMENT BUSINESS

DREAMS INTO REALITY Having a great recruitment business start-up idea is one thing. Turning that idea into a successful reality is quite another. Roisin Woolnough looks at the three stages start-up businesses typically go through

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“We deal with many different types of recruitment start-ups. There isn’t a fixed criteria for what companies should be doing” MIKE BOWLER, DIRECTOR OF RECRUITMENT AGENCY START-UP SERVICE 3R

Mike Bowler, director of the recruitment agency start-up service 3R, certainly knows a thing or two about setting up a new recruitment business and then growing that business year after year. He has helped heaps of recruiters get going with their new business venture. And if there’s one thing he has learnt, it’s that a ‘one size fits all’ approach doesn’t work. “We deal with many different types of recruitment start-ups, all with different ambitions and objectives, and there isn’t a fixed criteria for what companies should be doing.” That said, there are definitely phases that a new business goes through in the first few years.

AS A NEW OR ASPIRING BUSINESS OWNER, you need to be mindful there are different stages to running a new business. There’s the first stage, the initial break into the market, and then as the business grows and matures, it moves into new stages – and with each new stage comes new challenges.

STAGE ONE – THE FIRST YEAR It may sound simple, but the first step is getting going. You need to launch your business, and you need to start bringing business in. The number one priority in the first year of trading is generating business so that you can pay your overheads, and pay yourself,

plus any business partner or staff, if you have any, a salary. “You have to make your company viable and standing on its own two feet,” says Bowler. “In crude terms, you have to make sure there is more money coming in than is going out. Once you’re there, then there’s a bit of breathing space to start to be more strategic.”

Bowler says sometimes people try to do too much, too early on, trying to get all the boxes ticked from the outset.

This creates a very stressful environment for them and can prevent them from getting going. “We come across people who are trying to look three to four stages ahead, when all they need to do is just get their heads down and get some deals done. Instead, they are worried about the details like their LinkedIn profile and getting stuff on their database.” Business generates business, so phase one is all about getting the business in.

Think carefully about how you are going to spend your time and what elements of your business you can and WWW.RECRUITER.CO.UK 5

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DRE AMS INTO RE ALIT Y: STARTING UP YOUR OWN RECRUITMENT BUSINESS

Year three and beyond: This is the time for developing a clear, well-defined business development strategy and your market position

should outsource. “Outsourcing is key,” says Bowler. “Things like accountancy, credit control, online time sheets, CRM etc can all create a serious drain on an individual’s time. If the owner is doing everything, then only 50% of their time or less will be spent on the phone, recruiting and creating an income. The other half will be dealing with admin.”

The message here is play to your strengths and free up as much time as you can to concentrate on doing what you need to do: getting business in.

STAGE TWO – THE SECOND YEAR This is when you can start being a bit more strategic and plan in more detail about how the business is to grow and how to scale it up. Make time to take your mind off the day-to-day business stuff and think about where the business is going and how to get there.

Revisit your initial strategy and see if it needs revising. This is when you might want to employ new staff, which brings with it added levels of responsibility.

Again, a key consideration here is ensuring you can afford what you are doing. “You have to make sure you can pay them,” says Bowler. Plus there’s the HR aspect

of being an employer – training, contracts of employment, terms & conditions, working hours etc.

It’s at this point that Bowler says business owners need to think about what kind of company culture they want. When it’s just you, or just you and your business partner, the culture occurs naturally. When you bring people in, culture needs to be a considered thing. You set the culture. “When you are bringing your first people in, it’s a critical period when you start to develop the company culture. What are our objectives? How do we deal with clients?

What are our KPIs? How do we treat staff ? How do they demonstrate standards? How should work be carried out? The first people in will become the flagbearers going forward.”

STAGE THREE – YEAR THREE AND BEYOND This is the time for developing a clear, well-defined business development strategy and your market position. You need to think about how you want to grow your business – do you want it to keep growing organically? Or do you want to push it way beyond the current growth curve? “Now that your company is

really bedded in, it’s time to build some core strength in the business,” says Bowler. “Typically, it’s when you have some really secure business and are busy tendering for some quite chunky projects going forward.”

If you have very ambitious plans, you might want to explore investment options to push your business through to the next level.

This third year is typically the time when you might expect to move from ad hoc vacancies to stronger, more long-term business relationships. You can expect to be setting up formal agreements and more complex contracts as you work hard on client development. This is the time to be seriously thinking about things like preferred supplier lists (PSLs), if you want to go down that route.

There’s a lot to think about and do at each stage, and none of this is set in stone. These are just some of the typical challenges and experiences that recruitment start-ups face as they go from the first days of business through to maturity.

To illustrate those development phases and challenges in more depth, on pp11-13 we focus on three recruitment agencies 3R has worked with at the three different stages.

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Sponsored Feature

OUTSTANDING SUPPORT Starting your own business can be a daunting and isolating experience. That’s where start-up recruitment specialist service 3R steps in.

Vanessa Townsend speaks to the people at 3R who take start-ups through the different stages and challenges of a new business – every step of the way

ARGUABLY, FINANCES ARE ONE OF THE biggest areas of concern for any new start-up. So with Neil Ayton’s financial experience in the recruitment arena at his previous company, his position at 3R as finance director gives him a real opportunity to make a difference, using his knowledge and experience of over a decade to help new start-ups.

“Before joining 3R,” says Ayton, “I was financial controller and company secretary, ry, which meant my role could be quite diverse, iverse, from supervising the management ement accounts team, ing accounts and producing budgetss through to ensuring the company mpany maintained ance with the UK compliance Corporate ate Governance Code.

I was also so very much a go-to person for recruiters with finance e queries.”

Whatt attracted him to join oin the team at 3R? “Achieving success by helping recruiters ers make a success of their (Left to right) ight) Donovan, Alex O’Donovan, d of 3R’s head ment, Kim development, De’Ath, operations r, and manager, on, Neil Ayton, finance director 8 RECRUITER

businesses was a really positive concept that I could fully buy into,” he explains.

Operations manager Kimberley De’Ath agrees that the breadth of service that 3R offers drew her to join the company: “‘I was impressed by the unique and comprehensive service offered by 3R – from setting up email accounts, hosting domains, creating brands and websites.

It’s great to support new businesses.”

Previously, De’Ath was a 360-deg consultant and client account manager, who successfully ran multi-discipline, nationwide accounts within the built environment sector. “I’m really happy to support an industry I know and love,” she adds.

Technology is another important area new firms need to consider, and 3R offers recruiters the technological ability to compete and even overtake the more established firms out there. Head of development Alex O’Donovan joined 3R from his role as lead developer at his previous recruitment firm: “This meant I headed up many projects and often chose the specifics of which technologies to incorporate into the business going forward. Working at 3R allowed for much more flexibility and the chance to move onto cutting-edge technologies.”

START-UP CHALLENGES Making money is the first priority of any recruitment start-up, so the systems and people at 3R can easily take away the admin and technical stresses recruiters face in launching a new business. “By coming to 3R, a consultant’s website, contact data, accounting and financial backing are made available as quickly as possible so they can get back on the phones, with the sales tools they need, to get back marketing themselves with minimal interruptions,” O’Donovan explains.

De’Ath is also on the end of a phone to answer any day-to-day questions: “I am there to support our associat associates with any query they might be facing tthat day. It may be to do with our CRM o or back-office system, advertising or credit checking.” start-ups Ayton also helps st ensure that any fin financial transactions 3R is responsible for are occurring when they should be, with 1100% accuracy. “Whet “Whether that be invoicing the clie clients correctly, ensuring that we are doing everything we c can to ensure timely paym payment, to getting c contractors paid w within expected the e timeframes,” time he e explains.

AL ALLAYING FEARS FE Among the Am bigg fears biggest

MARCH 2018

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www.freedom3r.co.uk

keeping start-up recruiters awake at night is around systems and compliance, especially with the new data legislation – the General Data Protection Regulation (GDPR) – coming into effect in May this year.

“A move to doing all this alone is daunting,” explains O’Donovan, especially if the start-up business owner has come from a large, corporate organisation. “Myself and my team are dedicated to providing excellent systems with integrated Terms of Business and various contracts for temp staff, which include AWR, EAA regulations and GDPR.” De’Ath recognises that the financial fear of how much it costs to set up their own business and how they are going to make money is one of the big worries.

“As we’ve all worked extensively in recruitment, we know what a consultant needs,” she says. “Our start-up service costs £300 and includes everything they need to get filling jobs and make money as quickly as possible.”

Ayton says recruiters might feel daunted dealing with areas they are e less familiar with, particularly if they have ve come from an agency with an accounts unts department looking after the financial cial side of the business. “That’s where we come in,” he explains. “We’ll look aft fter er the financial side of things, ensuring g the recruiters can focus on what they are re good at.”

“Having worked with Mike [Bowler] and Kim [De’Ath] in recruitment for many years I was confident they would be able to support myself and my business partner in starting up The Talent Locker.

Their background of recruitment was one of the significant factors for us choosing 3R over other providers in the market.”

RICHARD BARKER, DIRECTOR, THE TALENT LOCKER

“In 2015 it seemed there were so many options for back office, financing and general set-up of a small recruitment business. I spoke to Mike at 3R, who in turn set me up a meeting with Chris [Powell] and everything just clicked. The personal touch that 3R added, and the knowledge that these guys have previously ran and developed very successful recruitment business in the past, made me feel comfortable working with them.”

DAN ADDY, Y DIRECTOR, DTT BROADCAST

WORDS OF ADVICE Finally, we asked the 3R experts what their best piece of advice would be to those thinking of setting g up on their own. Ayton advises to get help, get set up properly and listen to advice: “Be prepared to work hard but don’t try to do everything yourself when there is help out there. Have some money behind you to make the first few months less stressful.”

O’Donovan says: “Research suppliers liers and technology and be prepared to o work hard!” And De’Ath suggests: “Talk to others who have recently set up – we can put you in touch with other start-ups in a similar industry. Also, give me a call! I am always happy to talk about our services and create you a personal business plan.”

3R’s directors (l-r): Neil Ayton, finance director, Chris Powell, director of operations, and managing director Mike Bowler

freedom3r.co.uk Southampton: 01489 854741 Leeds: 01138 272186 WWW.RECRUITER.CO.UK 9

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DRE AMS INTO RE ALIT Y: STARTING UP YOUR OWN RECRUITMENT BUSINESS

HOW WAS IT FOR YOU? Three recruitment agencies share their experiences at the different phases of business growth

STAGE ONE Matt Nash, director at Rykard Engineering, a recruitment agency in the manufacturing space Matt Nash set up Rykard Engineering a year ago with co-director Jay Simpson. “I’ve always had a passion to set up my own business,” says Nash.

At the beginning of January 2017, Nash decided to take the plunge, so he handed in his notice and got started on the nitty gritty of setting up a new business – coming up with a business name, building a website, getting phones in... Two months later, the business went live.

“The biggest learning curve has been the aspects of running a business other than recruitment. I’ve had nothing to do with

branding, for example, before.

But when you are chucked in at the deep end, it’s surprising how quickly you pick things up.”

One of Nash and Simpson’s main objectives right now is to get themselves on preferred supplier lists (PSLs), which isn’t always easy when you’re a new starter on the pitch with only a small team.

“It might take two or three years with some of them as they will probably want to see us in the industry for a bit longer. It’s time and effort.” If it comes off, the payoff will be more security, bigger contracts and less time hunting out work.

Nash’s advice to someone looking to take the plunge like him? “Make sure you’re in a financially sound position.

We had enough money saved to live for six to eight months without earning anything, which took the pressure off to start billing. There is enough stress and pressure elsewhere, without worry about finances too.”

Be prepared to work longer hours, taking your work with you wherever you go. “I work evenings and weekends.

When I went skiing recently, I checked my phone and emails. When I worked for a company, I switched off when I wasn’t at work.”

THE BIGGEST LESSON LEARNED SO FAR The importance of resilience. There have been a couple of setbacks, including candidates not being chosen and a couple of early dropouts, but Nash (above left) says he and Simpson (above right) have learnt to put any setbacks behind them.

“All recruiters go through ups and downs, but the ups and downs are bigger when it’s your own company. It’s a lot more stressful, but a lot more rewarding too.”

STAGE TWO Dan Addy, director of DTT Broadcast, a recruitment agency in the broadcast technology sector Addy has taken a different business approach to many other agencies. Instead of hitting the phones and cold calling, he has gone down the

content marketing route.

“We let digital do the hard work for us. We do reports, podcasting and interviewing industry leaders. We get people interested in our WWW.RECRUITER.CO.UK 11

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DRE AMS INTO RE ALIT Y: STARTING UP YOUR OWN RECRUITMENT BUSINESS

brand and when the time is right, they come to us for a hire.”

This meant Addy had to learn a lot about direct marketing and content marketing – and learn it fast. It was just himself and a researcher at the company to begin with, but he also received support from a marketing consultant. Then he took on two interns last year, one of whom became the full-time marketing manager at the company.

Now that Addy is happy with the marketing side of the business, he is turning

his attention to staffing.

“That’s the challenge now.”

Something really important that Addy has learned is to stay focused on the high-value activities that will drive the business forward. “You have to keep asking yourself ‘Is it going to help us get to where we need to go?’,” he says. He writes himself daily objectives, detailing two or three things he wants to achieve by the end of the day. “Time management is so important.”

Equally important is knowing your strengths and weaknesses. “There are things you’re great at and things

you’re not great at. Figure out the things you’re not so good at and get other people to do them for you. The quicker you

do that, the quicker you progress. Things like compliance and accounting are all a headache to me.”

THE BIGGEST LESSON LEARNED SO FAR Something that really helped Addy was the business accelerator programme he joined last year. Through this, he has built up a support network of entrepreneurs and learnt that other people are facing the same challenges.

“It has been invaluable,” he says. And if Addy were to start his business again, there is something he would do differently as a result of what he has learned. “I would start building the team more quickly. We couldn’t make enough impact, just the two of us, and I realised that if we stayed like that, it would take us longer to get anywhere. With a new business, you need to be prepared to get things wrong, learn fast and move on.”

STAGE THREE Martyn Hurricks, director at The Talent Locker, an IT skills recruitment agency Martyn Hurricks’ only regret about the last few years is that he didn’t take the plunge sooner. “It’s fantastic and I absolutely love it. I just wish I had taken the leap earlier.”

Hurricks and his business partner have a lot to be pleased about: turnover is better than expected – the first year saw a turnover of £400k, the second a turnover of £1.8m and this year is predicted to reach £4.2m.

Staffing has grown from two to six people in that time.

The two main current objectives, other than servicing clients well, are to launch a new website and

grow the contract plan. “We have outgrown the last website – we knew we would – as we’ve moved into new markets, and functionality and usability has increased.”

The new website launch is imminent and the two directors are working hard on growing the contract offering.

It has already gone from eight contractors out initially to 50 out at last count.

Hurricks says it’s a constant battle between juggling the management of billable work, with focusing on the bigger picture and staying on track with strategy. “It’s a case of where do you want to be and what’s our plan of action.”

THE BIGGEST LESSON LEARNED SO FAR “You have to hire the best talent. We have made a couple of hires that we felt we would go ahead with, but were slightly unsure on and these haven’t worked out.”

Those two hires didn’t have the right behaviours for the company and although they have been replaced, Hurricks says it was a lesson learned. In future, there will be no rushing into hiring anyone.

“It’s all about getting the right people.”

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DRE AMS INTO RE ALIT Y: STARTING UP YOUR OWN RECRUITMENT BUSINESS

What I have learned along the way Amid all the administrative, financial, strategic and technological decisions that have to be made when starting out in a new venture, the most important of all is to enjoy the ride. Daniel Lewis explains why to Graham Simons

14 RECRUITER

within your sector of expertise and can involve becoming a member of the relevant body in your particular industry. Lewis is now a member of the Association of Personal Injury Lawyers.

He also recommends having clearly defined targets for the new business.

Lewis is now on target to reach his own aim of breaking even within the first year.

But above all, with the freedom to chart your own course as a captain of industry, Lewis says recruiters should just enjoy being their own boss. “My biggest bit of advice is just enjoy it.

Otherwise you can get so stressed out by the uncertainty, the lack of revenue coming in during the first few months, that you just won’t enjoy it.”

My biggest bit of advice is just enjoy it. Otherwise you can get so stressed out by the uncertainty got a bit of time to get there without stressing. It’s about keeping capital; it’s about being careful. If you’re going to start sponsoring things and marketing, be very careful what you do… [really think] about whether it’s going to be beneficial or not.”

This applies equally to digital marketing spend, Lewis says. Start-up recruitment businesses should carefully consider how much needs to be put towards advertising spend on social media and how much should be spent on LinkedIn membership, for example.

Being an industry expert and being recognised as an expert are equally important, Lewis adds. This means keeping up to date with developments

↗

RECRUITERS SEEKING to strike out on their own are advised to not to expect instant success, but to become industry experts and – most important of all – to enjoy being their own boss.

That’s according to Daniel Lewis, owner and founder of Daniel Lewis Law, who launched his business after being made redundant from his role as managing director at agency Longbridge Law last spring.

Lewis advises recruiters who are just starting out to not expect success right away, as it takes time for former clients to recognise you as a business in your own right. One of the lessons Lewis has learned is you still need to court them and demonstrate the excellent service you can continue to provide.

Lewis also advises recruiters to keep an eye on cost control and ensure there are enough funds to get through a period of little or no revenue in the first few months following launch.

“Bargain for no revenue for the first few months – maybe so at least you’ve

DANIEL LEWIS is owner and founder of legal recruiter Daniel Lewis Law

MARCH 2018

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