8 Reasons Start Up Recruitment Agencies Fail

21 Dec 2021

Starting Your Own Recruitment Agency

It’s a sad fact that so many startup recruitment agencies fail.

But why?

Read our article below to find out, and make sure your startup recruitment agency doesn’t fall into any of the traps:

1) Failing to Plan

It’s tempting when you’re starting a recruitment agency to just jump straight in and start drumming up business.

Yet you need to remember to have a plan in place.

Lacking a plan means you don’t have a clear vision of where you’re heading, so you could end up veering off track.

2) Lack of Experience

As we’ve covered in our blog before, it’s completely possible to start a recruitment agency without any experience.

However it is definitely more challenging!

Without a grounding in the industry or a wealth of contacts to draw on, then making a success of your business is much more challenging.

3) Excessive Overheads

There are a number of costs involved when it comes to starting your own recruitment agency.

And things can quickly add up!

Spending too much and making large financial commitments puts a great deal of pressure on you when you’re first starting out which puts your company at risk.

4) Weak Branding

Recruitment is a crowded marketplace but if you’re considering starting a recruitment business you probably already know that!

Standing out therefore is absolutely essential.

Not having a clear vision of your brand or not knowing your values means you could end up getting swallowed up by recruitment agencies doing the same thing.

5) Ignoring the Needs of the Client

Of course as a startup recruitment agency you’re bound to put the needs of your client first, but are their needs truly at the heart of your business?

Running a customer-centric recruitment agency has a wealth of benefits.

Working hard to understand the challenges and needs of your client, and building your business around them, is a great approach for startup recruitment agencies.

6) Committing to One Big Client

Landing that one huge client is such a thrill, especially when you’re just getting started.

However relying on just one or two big clients can be risky.

If you’re not careful they can swallow up all your time which leaves nothing left for business development. Then if they decide to work with another recruiter, you’re left high and dry.

7) Busy Back Office

You can never underestimate the number of back office functions required to run a recruitment agency, particularly one that specialises in temporary recruitment.

It’s another job in itself!

You could commit to hiring someone to take on the load for you, or reduce the risk by outsourcing your back office functions to a specialist like New Millennia.

8) Poor Cash Flow

Cash flow is a challenge for any startup business, but particularly if you work in recruitment.

If you’re paying out and waiting months and months for money to come in, it puts pressure on your growing business.

Luckily you can improve your cash flow by accessing recruitment funding via New Millennia, click here to find out more.

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