10 Questions to Ask Before Starting Your Own Recruiting Firm (Part 1)
As a result of the recent and prolonged economic crisis, the idea of a job-for-life has almost evaporated and the concept of job security has been severely diminished as firms outsource, offshore and streamline their operations and start to move to an increasingly contingent labor model.
What we are left with is a climate where people are starting to view employment as no longer safe and possibly even less safe than the self-determining, self-employed life. The figures back it up as reports from NBC News and the BBC show that the recession has boosted self employment in the U.S. and UK, respectively.
And where the market goes recruiting will follow, which means that many of you may be thinking of taking the plunge and starting out on your own. But, how do you know if the time is right and whether going it alone is right for you?
Below are the first 5 of 10 qualifying questions you might like to ask before taking the plunge into a self-employed recruiting venture:
1. Are you doing it because you want to earn more money?
Be careful. If your motivation for starting your own recruiting firm is more money, then think again as BusinessWeek outlined several robust studies, which shows that the self employed make no more money than waged employees and sometimes less. So, why do they do it? Well, it seems that the self employed value the autonomy and flexibility.
2. Are you doing it because you are simply upset with your current job?
Are you really committed to going it alone, or are you just at a job or career low and perhaps the grass just seems greener on the other side? If you are not sure of your motivation, try developing a detailed business plan and you will soon realize if your motivations are impulsive. A failure to complete a diligent business plan is an indicator that you may not be truly committed to self employment.
3. Are you self motivating?
Take an honest look at yourself. Has your life and career been full of drive and ambition? What major goals have you set for yourself in life? Have you achieved them, or do you lose interest and give up? Do you stick things out? Working on your own will mean that you have no boss to drive you, or peers to compete against. If you cannot motivate yourself from within, a career as a self-employed recruiter may not be right for you.
4. How will you fund the practice/agency?
You’ll need to funds to cover start-up capital costs, marketing costs, running costs and to pay your bills until the revenue starts rolling in. It could be six months before you finally break even. It is no surprise then that many recruiters who choose to strike out on their own may do so on the back of: a redundancy payment, a large bonus, inheritance, large personal savings pot, or some other lump sum they been the beneficiary of. You could, of course, take the lending route, but as we know it’s not the optimal climate for operating on credit. Other options are to continue working for your current employer at reduced hours to keep the money flowing and then starting up in a sector that does not compete with your employer. Alternately, take a second job to supplement your income or lack of. There is no shame in this. A second job is a great way to self fund your entrepreneurial initiative.
5. Have you prepared a full business plan?
I know this is obvious, but this could not be a serious recruiter’s entrepreneurial guide without explicit reference to develop a business plan. Your final decision on whether or not to strike out on your own as a recruiter should be made after preparing and considering your business plan. This should include full financial plan, marketing plan, staffing plan and, in particular, it should factor in the effects of any non-competes you may be bound by, which could prevent you from operating in certain sectors or regions for a period of time.
So, if you are finding that after asking these first priming five questions you are still in the game for going it alone, please read part 2 of this article to understand the other five key questions you should ask before making that final jump into the world of self-employed recruiting.