Writing a recruitment business plan
Your comprehensive guide to writing a recruitment business plan. What should you include and how should it be structured?
What should you include when writing a recruitment business plan?
The first section of your business plan should cover a brief synopsis of the content of your business plan – it outlines your business proposal and is often used by readers to make a provisional judgment of your plan. Ensure when writing a recruitment business plan that your summary is clear, concise and professional.
Begin with the end in mind, what will your business look like in 3 years?
- Staff numbers (internal), Sectors, Geography, Revenue, placement or contractor numbers
- What are your short, medium and long term objectives for the business?
- Here you will want to give some background to your new recruitment business.
You should include:
- How long you have been developing your business idea
- Any work you have done so far on starting your own recruitment business
- Detail of your relevant experience and background – how long have you worked in recruitment, in what roles and for whom, what sectors have you covered. How do you think this experience ensures you are placed for success?
- The proposed ownership of the business – are you going into partnership with someone? Will there be an investor holding an equity position in the business? Or will it simply be you?
- A brief description of the recruitment services you will provide i.e. permanent, temporary, contract, interim, executive search, retained, etc. and what sectors you will cover.
What are your USP’s?
Explain how your customers will gain from your service – you could include here reduced time to hire, provision of high calibre candidates, less stress and work for the client to source staff and so on.
For your market segment cover:
- The opportunity – how large is the market sector, what is happening?
- Include details of any customers you already have lined up i.e. if you are not under restrictive covenants or have agreed with your current/former employer that you can ‘take certain clients with you’.
- Outline and be open about any restrictive covenants that might stop you working with particular customers within your market segment and how you will address this.
Discuss how you can target and win new business during any restricted period and how you will reconnect with customers at the end of your restrictive period.
Management structure
For most new recruitment businesses, the management consists of one person – you! But you’ll still need to convince your readers to have faith in you.
To do that you will need to outline your skills, experience and background. Clarify how you will cover key areas within your business, especially those you are not necessarily strong at, for example, the back office or the legal and compliance aspects. Give a brief description of the processes, systems and procedures you will have in place to ensure the business runs smoothly. And finally for this section, you’ll need to convince your readers of your commitment – just how committed are you to making this work? Do you have the drive and determination to make your new recruitment business a success? Can you weather the hard times (which are inevitable) and come out stronger?
Business Name
Have you thought about a business name? What about a strap line? This may be one of the easier decisions you have to make and you may have had a name in the back of your mind for some time now. Before making a decision, check if it is a unique name and if a suitable web address (URL) is available for that name.
Business Premises
Where will your business be based? Are you starting at home or do you have/require a business premises? Consider first if you really need an office. If not, then this will become an unnecessary expense that you really don’t need. This may be in your long term plan but can you make do with using coffee shops or hired space if you really need an office occasionally.
Competition
This section demonstrates that you have done your market research. Demonstrate there is an opportunity for your new recruitment business and that you fully understand the sector and challenges you may face when starting your new recruitment business.
Who are your competitors?
Include both corporates (Reed, Hays, Michael Page and so on) as well as any independents who cover the same sector and geographical location as your business will. For each competitor, list their advantages and disadvantages.
Who stands out?
You can learn a lot from researching your competitors. By finding out what they do well you will be setting the benchmark for your business. It’s not about copying however, but definitely use what is good and see how you can differ and be better. You’ll establish what your unique selling points are and why customers will buy from you over your competitors.
Target market
Give examples of volume / value of any named clients that you hope to be working with. Are there any of the named clients that you think might not trade with you in first 12 months and potential reasons? How will you attract new customers to your business?
How big is your target market?
What type of companies will be your customers and have you dealt with them previously? Which companies do you expect to trade with in the first 12 months?
Research
What are the latest trends?
This could be understanding the latest technological advancements in the recruitment industry. Software and job boards for instance are always changing and understanding the tools you will need is vital.
You should also look into regulatory changes or changes in recruitment models and keep an eye on industry publications, reports and forecasts to identify potential opportunities or challenges for your business.
A great way to conduct research is to attend industry events, join professional associations or network with other recruiters. Following industry influencers on social media, can also help you stay up-to-date.
Business plan SWOT analysis
A swot analysis is a structured approach to evaluating the strategic position of a business and identify the strengths, weaknesses, opportunities and threats of a business.
Strengths
What are the strengths of your business or your business idea? Some examples are; ‘in a niche market’, ‘competitive prices’, ‘team experience’, ‘existing relationships” etc.
Weaknesses
What weaknesses may you face as a company? For example; lack of experience, difficult target market, market saturation, lack of expertise etc.
Opportunities
How can your business evolve in the future? Opportunities are external to your business, for example, has there been a rise in numbers of your target market in recent years? Is your business industry growing successfully?
Threats
What external threats may your company face? For example; new legislation, increasing number of specialists in your industry, etc. What action will you take to overcome your weaknesses and threats?
Candidates and clients
Advertising Candidate and Client Attraction
What actions will you take in order to raise awareness of your product/service? What methods will you use to advertise and promote your product/service? How often will you use these? (Initially/throughout the year?)
Pricing Policy
Have you considered what you will charge for your product/service? What have you determined your pricing policy will be? (%, flat fee, retained and hourly rate/job rate etc)
Sales projection and history
Projection
Have you considered what level of sales you might achieve in your first year? What do you predict that the sales income will be from your predicted sales numbers? How have you come to this prediction? What contingency plans do you have in place should forecasted sales not be met?
History
What are your billings for the previous 3 years? How many clients did you bill with? Where are your clients based? Are they widely spread or in a small geography? In Percentage terms – how much of your business was done with one particular client? (what was your concentration).
Checkout this link for some great business plan examples.
Starting your recruitment business
Writing a recruitment business plan should leave you with a better understanding of what is required to be successful. Lots of recruiters (or even non recruiters) start a business without proper planning and ultimately fail because of this.
From research, recruiters are 2.9 times more likely to succeed when they partner with SSG. We are recruitment specialists and provide support in every area of both starting and scaling recruitment businesses. We’ll go through your business plan with you and give you all of the necessary expertise to get you started. Once you are live, our business support team will guide you through the processes of making your business work.
We’ve helped over 700 recruitment businesses to launch so far from completely different backgrounds and sectors. Find out if we can help you earn 2 times your current salary owning your own business.
