The "battle for talent is boosting the attractiveness of starting a business," yet during the past ten years, new business registrations have been increasing at a 20% YoY rate.
Those growing, whether organically or through mergers and acquisitions, are doing it at a rate not seen since the heady mid-2000s. 80% of the 50 fastest growing businesses in the Recruiter Fast 50, 2021 focus on one industry, indicating a trend away from 'generalists' and toward 'super specialists.'
Many would-be recruitment entrepreneurs can still not follow through with their lightbulb moment and make it a workable reality, though, due to perceived obstacles.
Starting a new recruitment company is filled with several myths that are untrue. Here, we disprove five of them.
MYTH 1: You will never get funding
According to the British Business Bank 2021 SME Finance study, 56% of SMEs, on average, had looked for outside funding in the recent three years. According to European Central Bank, SMEs stated that the net demand for bank loans and credit lines has significantly reduced (2%, down from 12%) (4%, down from 10% ).
There would be fewer agencies if everyone depended on traditional funding to support their recruitment business from the start. Global alternative finance volumes grew by 24% in 2020, despite the pandemic disruption, according to new research from academics at Cambridge University's Judge Business School. Tighter borrowing limits have meant that traditional bankers are no longer the preferred financiers for many start-ups. Alternative financial providers are increasingly receiving this honour. Recruiting experts in the alternative financing industry may give fast access to cash to pay contractors and funding to expand the business. Specialist providers such as Simplicity – who offer 100% funding for payroll, contractor and permanent placements – are fast becoming the recruitment finance partner of choice for new and established recruitment businesses.
Find out more about Recruitment Specific Finance and how it can help you get started HERE.
MYTH 2: You have to do everything yourself
It's true! If you manage every aspect of your business, including processing timesheets, managing payroll, creating invoices, pursuing payment on those invoices, and determining tax and NI responsibilities. And they are only a few responsibilities of running and managing your own business. However, support is available to take care of most tasks. Consider outsourcing your back office function instead of attempting to handle everything yourself. Doing this frees up time to focus on recruitment, which you are confidently the best at.
The more time you spend managing everyday tasks in the business, the less you spend working on your business. Payroll can consume up to 40% of your new business's time, resulting in two days per week spent on non-fee-generating duties. And that time will only grow the more successful you become.
MYTH 3: You have to have a 3-5 year business plan
The saying "Fail to Plan, Plan to Fail" has much truth to it. However, it is not necessary to demand that you must have a thorough business plan in place that will forecast the future growth of your company over the next several years.
A comprehensive business plan may demonstrate a recruiter's commitment, skill, and business knowledge. These elements are more critical than ever, and the number of organisations requiring such a document is increasing.
Make a strategy, but make it reasonable and doable, and use it as a guide to keeping you moving in the right direction. Because the demands of both you and your company will vary over the course of any given year, you must maintain some flexibility rather than rigidity.
MYTH 4: You won't have a life
If you go to YouTube or read any of the available self-help books, many will try to convince you that the only way you and your business can succeed is if you grind, grind, grind 24 hours a day, seven days a week.
It is pretty simple to become absorbed by your work if you are enthusiastic about what you do. Still, most recruitment entrepreneurs will tell you that success takes a bit longer than anticipated.
There's no need to become enthusiastic immediately and make rational decisions; instead, proceed at your own speed and get the most out of yourself. For example, stepping away from your desk has proven to be beneficial. Spending crucial time away from your job allows you to view the wider picture, think more clearly, be more creative, and replenish the reserves you need to continue on your entrepreneurial path.
To everyone, a good work-life balance will mean something different. It's not so much about dividing your time between work and play as it is about feeling fulfilled and content in both aspects of your life. A healthy balance may look like this:
- Meeting job deadlines while still making time for friends and interests
- Having enough time to sleep and eat appropriately
- You don't have to think about work when you're at home
Make sure you create a healthy work-life balance, even when setting up your own business.
MYTH 5: It's all about timing
Think about it: Unemployment is at a 3.8% record low; employer hiring intentions are at a record high; access to recruitment finance is easier than ever, and barriers to entry are lower than ever. From 2020 to 2021, there were 810,316 business incorporations, a 21.8% rise year on year. 2020 to 2021 witnessed the most significant number of incorporations on record. The timing will never suit everyone, so you must do it now.
For more information and advice on how to get started, download our FREE Getting Started Guide HERE.