How to write a recruitment business plan
When it comes to setting up a successful new enterprise , writing a robust recruitment business plan is imperative. Your business plan is a roadmap to success, allowing you to establish the viability of the business, set intentions and use it as guide every step of the way. Without one, you might end up taking a few wrong turns. This is the case with many budding entrepreneurs, as they lack the understanding needed to write a good plan, omitting vital details which can be costly later down the line.
So whether you’re undertaking your annual review of your recruitment business plan, or you’re writing one for the very first time – this is how to write a solid business plan that will certainly lay the foundations for success.
How to Structure Your Recruitment Business Plan
The structure of your business plan is important. It needs to follow a logical layout and look at areas such as marketing, competitors and forecasting. The following structure is the most common:
- Cover page
- Executive summary
- Business description
- External analysis
- Internal analysis/execution
- SWOT analysis/market analysis
- Marketing and sales plan
- Financial forecasts
Sell Yourself as Well as Your Business
When you’re writing your recruitment business plan, of course it’s important to focus on the business aspect, but you need to remember to sell yourself too. When an investor is looking at multiple opportunities, each business plan might look very similar – it’s you that makes it unique. Potential business partners invest in the people as much as the business model, and they need to believe you’ll deliver everything you say you will.
Your Personal Recruitment CV
It’s important to talk about yourself in your business plan, so briefly outline your background, including your recruitment experience and any leadership or management experience you may have – this is what will make your business plan stand out.
Your Vision for Your Business
Anyone can write a robust business plan, but what makes for a successful business is vision.
It’s answering the ‘why’ – why do you want to create this business? Why will it be a success? Why will your recruitment business be different from all the others?
This is what will make investors get excited about your venture.
How to Conduct Market Research for Your Recruitment Business Plan
You need to conduct market research for your business plan in order to test its viability. You can do this by defining both your competitors and your target market, demonstrating that there is an audience there for your business.
Define Your Target Market
Every successful business owner knows their market inside and out. They know who they are, their likes, dislikes and where to find them.
In your business plan, you need to explain your client and candidate demographic, why they will be interested in your business and how you’re going to target them.
When starting out, keep your target market small and specialised. Casting your net too wide will undoubtedly lead to an imbalance of energy input and incoming leads. Narrow down your target client base – are you targeting a specific sector in a specific geographical area? Then further narrow down your candidate base – what experience level, contract durations, or career opportunities are your ideal candidates seeking?
Follow our advice for how to get new business in recruitment for further support on sourcing candidates and clients alike with a comprehensive recruitment strategy.
This is one of the most important steps in your recruitment business plan. Give your recruitment business a clear direction and purpose, and the lead quality and investment opportunities are sure to follow.
What Are Your Competitors Doing?
Competitor research will make up another key part of your business plan and recruitment strategy and will help you to evaluate the viability of your business.
Have a look at a number of different key competitors and identify their strengths and weaknesses. This will help you to discover any opportunities that you could take advantage of, as well as highlighting any risks that may affect your business in the long run. Prepare your answers to how you’ll overcome challenges posed by fellow recruitment specialists in your target niche, and how you operate differently to them.
Think About Your Sales Strategy
Once you’ve defined your candidates, clients, and competitors, you’ve got to think about your sales strategy. It’s all very well having a fantastic recruitment business, but how will you target your customers and make money without a sales and leads strategy?
Think ahead to the next 3-5 years and establish who you might need to hire to drive sales and what channels they might use. This is where you can really demonstrate your understanding of sales, including the barriers, opportunities and the key metrics for success.
Focus on the Numbers
If you’re going to use your recruitment business plan to pitch for investment, then you need to be clear about the numbers. Investors will be looking closely at this section, evaluating whether your business is profitable.
Break it down by:
- Costs (fees, commission, salary, contracts, business costs)
- How you plan to make profit
- Turnover projections for the next 3-5 years
Make sure you get really granular with the details – any gaps or cause for concern will have an investor raising doubts about your business model.
Once you've figured out your recruitment business plan, you need the following steps from Recruitment Entrepreneur when considering how to start a recruitment agency.
How Will You Get Funding?
If you’re planning on getting funding for your new business venture, then you need to be realistic. The average budget for a UK start-up is £5,000, so unless you’ve got that saved up, you need to think about where you might source the money from.
One of the most popular funding options for start-ups is personal funding, with 82% opting to self-fund their new venture. However, start-up budgets tend to be highest in recruitment, with 75% of recruitment businesses budgeting over £10,000 to start their business.
Business Start-Up Loans
Start-up loans are another great funding option for recruitment start-up businesses. The government released the Start Up Loan Scheme in 2012 and in 2019, there was a massive 200% increase in recruitment businesses – all of which needed funding.
However, the only issue with start-up loans is that, unlike investors, they’re a simple cash-injection into the business and don’t come with any further support, such as business mentoring and guidance. Whilst this might be ideal for some new business owners, it may not be the best option for others – especially those who are launching their very first start-up recruitment business.
Funding and Investment for Recruitment Businesses
Another popular funding option for recruitment businesses is working with investors. Investors provide a cash injection to get the business off the ground, however, unlike loans, investors enter into a partnership, providing business mentoring and guidance, as it’s in their best interest to ensure the business is a success.
At Recruitment Entrepreneur, we not only provide investment, but we also deliver:
- Financial advice
- Marketing strategies
- Operational support
- Talent acquisition
- Legal advice
- Development opportunities
We enter into a partnership with every business we invest in, helping you to build real value in your recruitment business and drive it to success.
What Not to Include in your Recruitment Business Plan
So now you know what you need to include in your business plan, it’s worth noting the things that should be omitted. Some of the most common mistakes made when writing a start-up business plan include:
- A lack of planning
- Underestimating your competition
- No focus on sales and profit
- No personalisation
- Exaggerated financial growth
- No direction or focus
- Unrealistic goals or assumptions
It’s important to be as transparent as possible when writing a business plan, so avoid making any bold or unrealistic claims, fiddling with your numbers or making any assumptions without tangible evidence in order to make your business look investment worthy.
Here at Recruitment Entrepreneur, we are always on the lookout for business leaders who want to scale their own recruitment business. We can help you with everything, from setting up your new recruitment business to scaling an existing one. Get in touch today to see how a partnership with us could benefit you and your business.