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Starting your own Recruitment Business

recruitment industry has very low barriers

It's well known that the recruitment industry has very low barriers to entry which seems to encourage a large number of new businesses to start-up each year.

What drives people to take the plunge into a new business varies immensely. Some have a driving desire to build a business themselves, do it better, faster or cheaper; others end up there because of circumstances. Few can look back and say they understood what they were really getting into.

There is no doubt commencing a recruitment business in Australia or New Zealand can be both personally and financially rewarding ventures for a lot of People. Some have failed, but many have developed successful businesses that deserve the recognition they receive.

This article poses some questions that need to be considered before taking the leap into new business ownership.

It is Personal?

A start-up business is an intense and personal affair that will teach a budding entrepreneur much about themselves.  Before commencing , a person should really understand their own strengths and weaknesses in a clear and unemotional manner. You should know what skills you don't (and probably will never) have. Outsource those things that aren't your specialty and use that time to go and get some new business! Believe me, you are not saving money by doing it all yourself, you are wasting time, energy and letting the business run you. Hopefully your business partners and/or professional support network will complement your capabilities and experience; you should surround yourself with the right support.

Related: Considering Starting A Recruitment Business? There Are Alternatives

A start-up business also needs to reduce as many risks as possible and new owners need to have their personal financial affairs in place so that surviving on low drawings is possible if the business performance does not match the financial plans.

Most new businesses won't succeed without hard work, belief, passion and undying energy from the founders. They require significant time commitment and those owners that have a lot of outside commitments can often find their time to be conflicted.

Why are you starting a business?

We are often surprised by the lack of vision or the lack of a burning passion in start-up companies. I can keep all my billings or I can convince my old client to work directly through me does not provide an environment that will sustain a business in the dark times or motivate employees to join you.

Do you have a vision for what you are hoping to achieve? What is your business going to stand for? Do you have a business model that meets your target client's requirements?  If you can't answer these questions maybe more thought is required.

Developing a strategy that incorporates clients, candidates, staff, service offerings, delivery mechanisms and financial requirements takes research and time.


Commencing a new business is not just about repeating what you learned from your last job, but is often about building something unique that builds on your past experiences and reflects your vision and importantly your true values too.

Some critical points to consider include:

  • Understanding scale and rightsizing  the vital key to a well-run sustainable business is scalable, repeatable systems. Every activity that occurs more than once in your business needs a process so it gets performed exactly the same way, every single time. This consistency means that you can handle extra volumes in the most efficient way, and that the customer gets the same experience (hopefully a great one!), every time they do business with you.
  • Building products and services that are matched to clearly defined target clients
  • Understanding strategic v opportunistic business opportunities.
  • Establishing a remuneration model that rewards the culture you are seeking to build. Your staff are your largest expense so the remuneration model needs to reward the company before it rewards staff, not the other way around.
  • Establishing legal documents that protect you with staff, candidates and clients.
  • Choosing technology platforms that will grow with you in the medium term, not just chosen because you have used them in a past job.
  • Consciously developing a brand that accurately reflects your business and assists your marketing and sales initiatives.

Most importantly, small businesses are about good cashflow management. You may not be an accountant, but you must have an overwhelming interest in the numbers side of your business. You don't have to create the reports - outsource by all means - but you definitely need to look at your cashflow, budget and profit and loss on a monthly basis. And if you don't know what it all means, get your bookkeeper to sit with you each month and explain your financial position. Getting this right requires some disciplined procedures and is aided by a strong understanding of risk.

Being a business owner is not for everyone, but the recruitment industry provides a wonderful platform and environment to test if this is your calling.  Do your homework, manage your ego, learn to listen, don't bite off more than you can chew and enjoy the experience.

Originally published in Recruitment Extra 

Categories: Consulting

Tags: Strategy, Recruitment, Staffing, Leadership, RIB Report, Technology, Nigel Harse, Recruitment industry

Picture of Rod Hore

Rod Hore

Rod is a 35-year veteran of Australian and international IT and corporate advisory organisations. His executive-level credentials traverse many segments of the staffing and recruitment industry and include corporate advisory assignments, mergers and acquisitions mandates, and C-level advisory to multinational and other public and private organizations. Located in Perth, Rod founded HHMC to provide local industry acumen and global knowledge to Asia Pacific recruitment agencies. HHMC’s innovative business strategies and well-grounded guidance result in clients realising their personal and corporate goals.

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