With 9001 new agencies incorporated in 2017 there are a lot of agencies that are between six and 18 months old (young!). Having worked with owners of those agencies who have left agencies and started their own, I recognise how important it is to generate revenues. As a good consultant it also makes sense to take the lead and develop cashflow by doing what you do best – winning work and filling it.
If you are reading this and that sounds like you then hats off to you! You’ve taken the plunge and have finally done what so many other consultants dream about wistfully in the pub. You now have your own agency, with your own goals and objectives. That takes courage and confidence. At present around 85% of the agencies in the UK today are five or less people. With 35,000+ agencies in the UK that is a lot of micro agencies. In fact, only 9,565 agencies in the UK have turnover greater than £250k.
Well, how many of those <5 employee businesses would like to become 10? 25? 50?
How many of those businesses hitting £200k turnover would like to do more?
What is the barrier to agencies breaking the five headcount or the £250k turnover?
Firstly – there are those who are blissfully happy being sole traders or perfectly formed outfits of 3 or 4 people. Nothing wrong with that if that is your goal. Having a lifestyle business is a great thing to have. Income is a means to an end. Please don’t think I’m judging those business owners decisions. There is a group of business owners who do want to grow. The first challenge is finding good people to join your business, followed by developing them to become consistent fee earners themselves. Then there is the subject if retention. I’ve met and worked with plenty of owner managers who aspire to grow yet find it challenging.
If you desire to grow then I would recommend the following:
Dig deep and think about why you chose to start your own agency. What do you really want from it? What is the end goal? How much do you want that? Would you settle for less?
Although this may not be the easiest thing to admit – if you’re comfortable with what you’re doing and what you get from it, could it be don’t want it as much as you think you should? Drive and desire are important as there is a lot of work and energy required to grow an agency. Taking the “why” idea further – this is what will help you to secure good people. When you have a mission and vision to share then motivated people will want to get on the bus with you. Joining a start up is exciting! Paint a picture as to what the future will hold and temper it with the level of work it will take to make it happen. Bring people on board in the early stages who share the excitement for your why. This is how so many agencies start as two people from the beginning. The excitement of the initial “why”.
Plan Your Growth
Sit down with a pen and sheet of paper. Draw the structure chart for your business in three years’ time. What roles will exist that don’t exist today? Who will do those jobs? Why would they want to be part of that team? When you start to build the map of your future organization you’re one step closer to making it happen. Now come back to today – what do you need to do first to make it a reality?
Set a hiring plan and process. Define the attitudes and behaviours that are required for the job. Focus less on background and niceness at interview. Make sure that the individuals you meet have the underlying competencies and drivers to succeed. Having worked with business owners on the journey to selling their businesses (for 10’s of millions in some instances) there is a single piece of advice that all of them would share with you. Be selective with your hiring. Be fussy. Do not settle for the best of the bunch. Hire those that meet the standard you set at the beginning.
The cost of a bad hire is far greater than the time it takes to find the right person.
Commit to the development of those you hire. Invest time in the coaching and mentoring it will take to get them to succeed. If your own personal billing were to drop from £300k to £200k but you developed four other consultants to hit £120k then you’re growing your business. Scale that further. Become a full time developer and leader of people. Develop 12 people to hit £120k. Now you’re making a robust case to justify investing your profits into hiring more people.
Find people to work in your business who add value. Avoid hiring clones of you as you will have a single dimension business. Stop expecting everyone to do things to the same standards as you. Allow people to have the space to make mistakes and learn. Be less precious about your business – things will go wrong from time to time. Avoid becoming the central lynch pin who ends up being the Principal Consultant feeding the team jobs, candidates and revenue. Five consultants is a sticking point for a reason. Breaking five requires a business owner to let go and become the MD, not the Principal Consultant. Few managers in corporate agencies manage to grow their team beyond five for the same reason. They feel the need to be involved in everything that each consultant is doing. Who they are talking to, what they are saying and why they didn’t do it the way they would have done it. Too much telling and not enough empowering others to make decisions properly. Breaking five requires personal discipline and trust. The other barrier to breaking five is leaving the team to fend for themselves too early, sending them on external training session to “learn recruitment” in two days and come back and bill. Sheep-dip training rarely works without good coaching and support. Old school recruiters will tell you they learnt on the job. The real learning in recruitment is acquired through doing.
Develop Others Properly
Speaking to business owners who have sold their agencies will highlight the importance of good development plans. A structured approach to developing people – be that experienced consultants to drive retention, future leaders or the development of rookies to become consistent billers makes your business more valuable. Yes, you’ve read that right, a structured training and development process makes your business more valuable to a potential buyer.
Having spoken to clients after sale they have reported directly that the quality of their training programme has directly influenced the sale price they achieved for their business in real cash of over £1m.
Training is clearly important. A structured, in-house approach to developing your consultants and leaders will help you to attract, hire and retain good people. When you have a roadmap to pass on to a buyer (or to follow yourself for the next 10 years) that develops people into consistent billers then you have a valuable asset. Commit time in your calendar every month to train and coach your team. The bigger the team then the more time you will need.
Talent Builder has been developed to provide owners of recruitment agencies their own internal training and development programme to own for the lifetime of their business. No monthly fees, no increase in cost based upon headcount. A one time investment to have your own fully branded training and development programme that, according to clients, makes the process of developing consistent fee earners simple and easy. If you want to grow your business and are on that journey and would like to get there quicker then give us a call on 020 3004 4952
18 June 2018