It's January and if you are like many owners you probably don't have a business plan done yet for this year. The good news is that it is not too late! 2011 will show significant growth compared with 2009 and 2010. ALL of the recruiting firms I coached showed dramatic increases in their 2010 revenues from 2009, some even had their best year ever! One of the key reasons is that we created plans with specific benchmarks that allowed them to see significantly better results than the industry on average.
Most firms are seeing nice increases in the flows of job orders, first time interviews, etc. So NOW is the time to put the ,pedal to the metal” and begin to invest in your growth. 2011 is still a blank slate ready for you to create your master work. Don't let fear drive you, the water's fine; it's time to come on in! This doesn't mean take any risk without having a plan. It does mean that if you do have a plan and if you can learn from the experience over the past 2 years the economy will support the risk you take in growing your business.
First, let us talk about what a good business plan for a recruiting firm owner is NOT. It is NOT the sum total of all the goals your recruiters have set for themselves. My experience with these types of plans is that they are out the window by February. Why? One, because you accept your recruiters numbers without challenging them, so they probably won't happen. i.e. Your 2 year tenured recruiter who billed $80,000 last year sets a goal for $300,000 next year and you don't ask him how many interviews he has to arrange to hit that number and you don't ask him what will be different. Most recruiters do NOT know the answer to these questions, yet the 1st time interview to placement ratio is the best metric that accurately predicts revenue.
The second reason these plans don't work is that the owner/manager does not have regularly scheduled meetings with their recruiters to make course adjustments early on in the year to help keep them on track.
The third reason these plans don't work is that they are generally just "feel good" exercises done during the holiday season and are simply statements of intent of a wish of what the recruiter would like to make and they don't contain the specific activity targets and time frames for execution. Just like New Year's resolutions, they are forgotten early in the year.
Now, if you are serious about creating a strong plan that has a chance to survive for the duration of 2011, here are some components that need to be in place as a MINIMUM:
- A defined and specific revenue target that is NOT contingent on any individual recruiter. It is a revenue target you will manage the office to. This means if someone quits you replace them. You should plan on 20% turnover of your existing team at a minimum.
- You should know almost exactly how much you will keep as profits if you hit the revenue target. This might seem pretty obvious, but you would be shocked how few owners that I encounter know what their profit margins are. In addition, you should know exactly what you are going to do with those profits.
- How much will be reinvested in new hires, new office equipment, computers, etc?
- How much will be reinvested in hiring and growing your team?
- How much will be reinvested in training for you and for your team?
- You should have specific goals for the disposable part of your income after covering your bills at home. How much will you spend on vacations? How much will go toward retirement? Debt reduction? Etc.
- The more specific you are with each of the above elements the greater will be the likelihood of you achieving them.
- If your office goal is $1 million you need to take your average fee and figure out the exact number of placements you need to make. Once you do that, you need to figure out how many first time interviews you need to arrange. i.e. if your average fee is $20,000 your firm needs to make 50 placements this year to hit your goal. If your interview to placement ratio is 8/1, your firm needs to arrange 400 interviews this year or 7.7 per week to hit that target.
- You should identify your offices weaknesses as specifically as possible and then identify strategies, that over time, will correct those deficiencies. Examples of this could be, marketing technique, closing technique, recruiting technique etc. Once you identify these what trainers products can you invest in? Then place the training on these techniques in your plans and on your calendar.
- Are there new markets you want or need to develop? When exactly will you start? What are the strategies to get you there? i.e. ,I will hire someone from the insurance industry to establish a new insurance desk with a target start date of 6/1.”
- Review the list of companies your firm made a placement with this past year. Which of these could you target to make them key accounts? What ways can you add value to them to make you irresistible as trusted partner?
Ladies and Gentlemen, you are running a BUSINESS. It is shocking to me how many of you do this without so much as an outline of objectives never mind an actual plan! The above 6 components give you six easy steps and represent the basic outline of a sound plan for your firm.
I challenge you to invest an hour a day over the next week to engineer a plan for your recruiting firm this year. Spend one hour on each of the above 6 components. You don't need an elaborately long document, but do have specific, measurable objectives with established time frames to accomplish them.
If you have struggled following through in the past, consider a professional business coach to help you establish your targets and work with you to insure they get accomplished. Determine to be outstanding this year. Don't leave your success to chance. PLAN for it!