Common Obstacles When Starting a Recruitment Business

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Common Obstacles When Starting a Recruitment Business

Starting a recruitment business is an experience like no other. However, there are many challenges, and you need the right support behind you.

According to UK recruiter, over 6,000 UK recruitment businesses registered in 2021. Further statistics show that 20% of new businesses must close their doors before they celebrate their first year. But with the right preparation, you can be one of the 80% success stories.

If you’re starting a recruitment business, you need to know that the size of your challenge. The rewards can be vast, personally, and financially, but you need to put in the work to overcome the obstacles. This article outlines some, not all, of the obstacle’s new recruitment business owners face as they start and scale their idea. It also emphasises the importance of having the right support behind you. Recruitment Entrepreneur is a business incubator which helps entrepreneurs and businesses launch and scale recruitment businesses – and we want to be your trusted mentor, and partner, on your journey. 

 Here are five common obstacles you will face when you start your recruitment business – and how you might overcome them.

 1. Is it the right time?

Timing is essential when starting a business. However, it’s not as crucial as some aspiring business owners may think. Some use timing as an excuse not to make the leap; after all, there’s always a reason not to launch; poor economy, self-doubt, just ‘one more placement’ or a lucrative promotion in their current job. Accept that there is no sure-fire time to start a business. Instead, be confident in your business plan. If you have a robust plan to bring in revenue, and enough money in the bank to live on until you do, the time to launch is now. 

 2. Start-up capital

As well as money to support yourself, you may also need money to get your business up and running. You have several options to choose from when it comes to funding your start-up. You could look for outside investment from a venture capitalist or angel investor. If you want to create a market-leading business and achieve a fast and profitable exit, the investor route could be the best path to take. 

Your investor will have the expertise to start and scale a business - that kind of knowledge is invaluable. They won’t run the business for you, but they’ll be able to coach you, provide resources and facilitate your success.

You could also get a loan from your bank or apply for a grant from one of the many funding bodies out there.


3. Admin

The admin that comes with running a business can be overwhelming, especially if you are the only employee. The consequences of making a mistake on matters such as taxes can be worrying – at least in the founder's mind. As well as taxes, there’s the legal process of setting up a company, bookkeeping, and more. While these tasks are essential, most entrepreneurs discover skills they never knew they had as they navigate their way through growing a business. With discipline and application, as well as making use of the vast number of resources available, admin becomes much more straightforward.

If you get an investor or partner on board, they may be able to provide the administrative expertise you need, so you can focus on what you’re good at; building client and candidate relationships and building your business. The important thing is that you don’t let running your business get in the way of growing business. 

4. Many hats

Starting a business means you have to wear many hats. You may call yourself the founder, the MD, or the CEO, but you’re much more than that. You’re not a recruiter anymore; you’re Head of Sales and Marketing, Chief Financial Officer, and IT Support, with an open brief to do anything else that needs to be done. 

This can be overwhelming, especially at the start. But, relying on yourself in this way can also be exhilarating. When you manage your time well and keep your discipline, you can accomplish things you never thought possible.

5. Winning clients

Bringing clients on board is what will make or break your business. It’s the most significant challenge when you start a business – and where many aspiring entrepreneurs fall. While there’s no golden rule to landing clients, the easiest way is to focus on what your clients need and deliver it. Keep your ear to the ground on changes in your chosen industry and network with as many decision-makers as you can. Ask the right questions and listen to what they say. Focus on the challenges they are facing right now. 

As you grow, you should aim to reach the ideal state, when your clients and candidates become your ambassadors. When you provide an excellent service, people cannot help but tell their networks. Referrals are the most efficient way to win clients – an entrepreneur’s dream. When you get a happy client, make sure you ask for a testimonial that you can display on your website, Google, and socials – never stop building your brand in a competitive market.

If you are looking for advice on any of the above we would be more than happy to discuss how you can launch your business successfully, no strings attached.