Throughout my entire career I have never seen the job market change so rapidly from “the sky is falling” to “more business than anyone can handle!” Many of you are hiring because you realize the revenue your business is losing by not filling a higher percentage of business written. However, as you grow and hire, protect yourself and your business. If you hire right, the person should pay for themselves within 90 days!
When you review a P & L Statement of a Staffing and Recruiting Firm there are usually one or two sources of revenue and a much larger list of expense items. It’s important to have a precise exit plan in order to make appropriate decisions today.
The most common exit plans for our profession include:
- Selling your business to the highest bidder
- Selling your business to your employees or setting up an ESOP (Employee Stock Ownership Plan)
- Investing your profits and eventually close the door
I often receive calls from stunned owners who attempt to sell their business and realize their business has little or no value. If you are your business, if your business is 100% direct placements or you’re a sole proprietor; it will be difficult to sell your business. Or worse, the amount you’re offered will be much lower than anticipated.
If you have employees but your production accounts for more than 35% of your sales, you will also find it difficult to sell. If you do sell, the buyer will want you to stay with the business for a specific timeframe.
Actions you can take:
1. Replace yourself as the top producer of your business
2. Add additional sources of revenue:
- Contract staffing
- Direct hire
- Affiliate income
- Unbundling your services
- Investing in passive sources of income
3. Create a specific exit plan
- All decisions made align with your plan
4. Set up your business like a franchise
- Create and implement systems and processe
5. Get organized – Prosperity is not attracted to disorganization
6. Realize there are riches in niches
- Conduct Revenue Modeling
- Target 85% of marketing and recruiting at best business
PROTECT YOURSELF AND YOUR BUSINESS
You must protect yourself and your business and can accomplish this by implementing the following:
1. Never allow one client to represent more than 15% of your revenue
2. Have multiple contacts at each client
3.Build teams around your big billers – they do not supervise the group
- Big Biller
- Recruiter who only recruits on their orders
- When they attain specific goals – add a second Recruiter
- When these three attain a certain level add a sourcer | support person
The recruiters also have contact with clients which would protect you if you ever lost a big biller.
4. Place your assets in an irrevocable trust – own nothing, control everything. Assets placed in a Will end up in probate and your heirs will lose at least 1/3 of your assets.
5. Take 5% of cash-in or GMP and place it in a reserve fund targeting passive income opportunities
Implement these ideas and you will increase the value of your business while you protect yourself and your business.