Having worked in the staffing & recruiting industry for over 12 years, I’ve met a lot of people that have attempted to open their own agencies, only to see them close and return to corporate recruiting.
It’s a shame, because many of these people were good recruiters, but they tend to make some common mistakes that inevitably close their businesses.
Because I want you to be successful and not make costly mistakes, I’ve summarized some that I think are avoidable.
Remember if starting your own agency seems daunting, I’m here to help!
I’ve created a video training course that helps you start, build, grow, and optimize your own staffing agency. You can learn more about it here.
Too many job titles.
It’s tempting to want to go after any and all business when you’re starting, but you can’t be everything to everyone. You’ll need to start small, keep it simple, and slowly build an offering around a handful of job titles, otherwise you’ll be stretched too thin, and you’ll have a hard time providing quality candidates to your new clients.
Create a “lane” and stay in it until the market pulls you into something new.
Careless financial management.
Not properly budgeting future expenses, like paying taxes or having way too much overhead can not only squeeze your profit but creates a lot of stress. I recommend making estimated tax payments to the IRS each time you get paid versus waiting until April and paying a lump sum. This simple money management will help you focus on business development and providing quality service.
New business owners tend to forget that they’re a “start-up” and want to add costly subscriptions to software, lead generation, expensive CRM’s and all sorts of unnecessary tools. Yes, you can add things later, but I recommend to run your business super-lean for the first 4 years.
Nonprofitable industry.
Providing recruiting services to an industry with slim margins, like restaurants or retail, can be a killer. This is because if their profit margins are small, do you think they are willing to pay for your services? Likely not.
You’ll want to find that sweet spot with open positions that you can handle and clients that can pay. Simple as that.
Not reinvesting.
Instead of going to Vegas each time you get paid, you’ll need to reinvest your profits back into your business. This includes everything from getting a website and business email, to getting your first Applicant Tracking System (ATS), and more.
Being disciplined here is crucial for long term success. Remember that each year you stay in business, many of your competitors call it quits, which not only gives you an opening to that account you always wanted but also helps your organic search results and reputation.
Does all of this seem overwhelming? It doesn’t have to be!
I’ve created an entire video training course to help you start, build, and grow your own staffing agency. Want to learn more? Check out the class here.