Rob Sheffield Director and owner of Nakama Global
In London there are over 150 creative services, marketing and digital recruitment businesses, these range from 1-person organisations to companies that number up to around 80 people. Very rarely do they go beyond this, largely due to the fact that the market sector they operate in is smaller, more bespoke and specialist than their larger more traditional recruitment counterparts and a focus on agency clients rather than building a robust mix of clients across sectors.
A lot of these businesses in existence today carve out successful niches for themselves but struggle to grow after the first 18 - 24 months. You tend to end up with a large number of businesses numbering 5 - 20 people. Having interviewed around 50 people in the past year for various consultant and management positions in our business I was struck by the fact that they were all educated and capable people but even at management level none of them had been exposed or had the guidance around the commercial aspects of growing their business and business sectors. The mantra seemed to be more sales equalled more billings. All well and good but if your going to ask people to grow your business it makes sense to give them some insight into the type of thinking required when looking at growing a business. This can be applied to all aspects of a recruiter’s job, not just management and business owners.
We had a reasonably successful 1st year trading and I was asked by one of our team what we based our growth predictions for year 2 and 3? and how we expected to achieve those. My response (below) was to talk to her about the thought process behind how you grow any business, to take this and apply your market knowledge and to constantly review and assess.
We talked about a couple of key focus points. There is a plethora of crap on business growth and how to achieve results. In terms of achieving growth year 2 we agreed we had momentum, a bigger brand and more business so a level of natural growth occurs there, after that its a combination of factors:
More sales, more profit if your margins are right and better/more people and better processes. That's the standard response from most of the people we met over the past year. If your working in a business, managing people, being managed or running a business you need to think beyond that and it has amazed me how many people in our sector don't.
So when we set the budget for this year we asked ourselves several questions:
Where are we now? , What is our potential to grow the business? , Where do we want to go? , How are we going to get there? And What do we need to do?
We then looked at measuring current performance
Financial performance is a consequence of marketing and staff performance - in our business that is selling (consultancy and being more like an account manager for us) (another post on that later), and delivering creates the money, so focus on the financial figures but look behind them.
In our Business we look at:
Financial performance, Revenue, Profit (not GP - OP) and Cash flow
Marketing performance.
Operations performance.
We then Measure the capability of the business itself, potential of the business for future development. What are our key resources (people, intellectual, financial, technological) our controls and systems (they give us the information we need to make the best decisions). Making sure we have experience appropriate to what we think we are trying to do, at levels of the business. We are always looking to our staff, external resources and the market for ideas and innovation (processes and the way we present our product) and leadership (how clear are we about where and how we are taking the business).
Where do we want to go?
So, where do we want to be in three years’ time (Turnover? Profit? Employees? Product lines? Number of customers?) Because if we know where we want to be in three years time then we know where we want to be in one year’s time. And, if we know where we as a business want to be in one year’s time then we know what we need to do now!
How are we going to get where we want to go?
Strategic planning is fine, this should always fall in line with a focus on what it is we want the business to become. So we take a look at the following:
What do we want the business to be?
What is our vision?
How will we know we are there?
What are the numbers, the targets for turnover, profit, staff, number and size of clients
How are we going to do it?
What’s the ‘strategy’? Are we going to be cheaper, faster, higher quality, employ/acquire the best staff, buy out the competition, focus on small contracts or what?? In our case the primary focus is on quality, delivery and superior staff.
What are the steps and hurdles on the way?
What are the major obstacles on the way that we need to do before you can move on?
What and how will we be measuring to assess our performance? To often in recruitment the focus revolves around just the numbers, forgetting that good staff development plans, giving people autonomy and support enables them to grow and in turn the business.
What things do we need to measure on a day-to-day basis… targets that will mean we, as a business will achieve success.
What do we need to do?
When we started we knew we would need a system to measure how we were doing; a system that measures the key indicators so that we could focus on the big stuff. Hence why in recruitment we look at results, figures, activity but people rarely focus on staff turn over, development and culture. These are equally important if not more so because they enable the people you have to grow. Very few businesses that get this right don't grow their revenues and profit.
The key to growing any business is down to motivating staff, a great product and thinking innovation, yes businesses do not turn profit, grow and continue to exist if you are not looking at the numbers, at the heart of the business needs to be numbers. Everything should be tested and measured so that you know what works and what doesn’t so that you can systematically think about how you can do things better. Another area recruiters in our industry take to far with KPI'S, weekly reports and micromanaging productivity out of people.
You need to know how the 80:20 rule works in your business. 80% of profit comes from 20% of customers. Do you know who your best customers are? These never the big one off accounts, they are the regular, loyal and trustworthy bill paying kind. Where can you find more? And what about your worst customers, the customers from hell, who make you no money and are a pain in the backside? Why do you keep them? What would happen if you got rid of 50% of your customers!
You need to streamline and have systems in place so that you don’t keep making things up as you go along. A common problem for new businesses and in my opinion especially in our recruitment sector.
Think about what you have to put in to get how much out? You must look at every step of your sales process ( we are always focusing on quality of our networking and referrals this generates more potential leads and business opportunities than asking people to make 30 cold calls, I cannot remember at any stage setting cold call targets in our business) , and make improvements at every stage… get better at spotting and converting your opportunities, keep customers for longer, they will spend more if they feel the relationship adds value, delivers quality and is valued by you.
Use more ways of reaching potential customers. Most businesses use two or maybe three of the possible fifteen or so available channels only and ignore the rest. Your brand, growth and success depends on you getting to as many people as you can in the right way with the right message so consider all avenues: word-of-mouth, networking, advertising, PR, banner ads, referral systems, seminars…
Going back to looking at growth any business owner, manager, leader will state: really great businesses are obsessed with three things:-
Where are we taking this business? (While being aware of the outside environment) (Strategy)
How are we going to sell our product? (Marketing in all forms)
How can our people get on better? (Teams and people)
More importantly, and something I think we have become good at and why we are looking to develop our staff and is the big issue for owners, have we got the bottle to overcome some ‘owner fears’? Often its owners themselves that hold back the growth of their business because they are:
Frightened of letting go of financial control – sharing ownership with others, taking external funds to fund and fuel the growth
Frightened of letting go of management control – sharing power with others (delegation)
To grow a business, any manager or owner needs to recognise that they cannot do it all themselves. We have people in our business who are much better than my self and my business partner when it comes to certain aspects of the business. Secondly always bare in mind and that you will probably need some more money quicker than you think because growing a business is like haemorrhaging cash.
Day to day we never forget the following: How we follow up on all leads, other complimentary things to sell to existing customers (our fixed cost production model). We check every step of our customer journey – how can we make it better for them as well as checking every step of our delivery and sales function – how can we improve the results that you get as potential customers head towards being customers.
A lot of these businesses in existence today carve out successful niches for themselves but struggle to grow after the first 18 - 24 months. You tend to end up with a large number of businesses numbering 5 - 20 people. Having interviewed around 50 people in the past year for various consultant and management positions in our business I was struck by the fact that they were all educated and capable people but even at management level none of them had been exposed or had the guidance around the commercial aspects of growing their business and business sectors. The mantra seemed to be more sales equalled more billings. All well and good but if your going to ask people to grow your business it makes sense to give them some insight into the type of thinking required when looking at growing a business. This can be applied to all aspects of a recruiter’s job, not just management and business owners.
We had a reasonably successful 1st year trading and I was asked by one of our team what we based our growth predictions for year 2 and 3? and how we expected to achieve those. My response (below) was to talk to her about the thought process behind how you grow any business, to take this and apply your market knowledge and to constantly review and assess.
We talked about a couple of key focus points. There is a plethora of crap on business growth and how to achieve results. In terms of achieving growth year 2 we agreed we had momentum, a bigger brand and more business so a level of natural growth occurs there, after that its a combination of factors:
More sales, more profit if your margins are right and better/more people and better processes. That's the standard response from most of the people we met over the past year. If your working in a business, managing people, being managed or running a business you need to think beyond that and it has amazed me how many people in our sector don't.
So when we set the budget for this year we asked ourselves several questions:
Where are we now? , What is our potential to grow the business? , Where do we want to go? , How are we going to get there? And What do we need to do?
We then looked at measuring current performance
Financial performance is a consequence of marketing and staff performance - in our business that is selling (consultancy and being more like an account manager for us) (another post on that later), and delivering creates the money, so focus on the financial figures but look behind them.
In our Business we look at:
Financial performance, Revenue, Profit (not GP - OP) and Cash flow
Marketing performance.
Operations performance.
We then Measure the capability of the business itself, potential of the business for future development. What are our key resources (people, intellectual, financial, technological) our controls and systems (they give us the information we need to make the best decisions). Making sure we have experience appropriate to what we think we are trying to do, at levels of the business. We are always looking to our staff, external resources and the market for ideas and innovation (processes and the way we present our product) and leadership (how clear are we about where and how we are taking the business).
Where do we want to go?
So, where do we want to be in three years’ time (Turnover? Profit? Employees? Product lines? Number of customers?) Because if we know where we want to be in three years time then we know where we want to be in one year’s time. And, if we know where we as a business want to be in one year’s time then we know what we need to do now!
How are we going to get where we want to go?
Strategic planning is fine, this should always fall in line with a focus on what it is we want the business to become. So we take a look at the following:
What do we want the business to be?
What is our vision?
How will we know we are there?
What are the numbers, the targets for turnover, profit, staff, number and size of clients
How are we going to do it?
What’s the ‘strategy’? Are we going to be cheaper, faster, higher quality, employ/acquire the best staff, buy out the competition, focus on small contracts or what?? In our case the primary focus is on quality, delivery and superior staff.
What are the steps and hurdles on the way?
What are the major obstacles on the way that we need to do before you can move on?
What and how will we be measuring to assess our performance? To often in recruitment the focus revolves around just the numbers, forgetting that good staff development plans, giving people autonomy and support enables them to grow and in turn the business.
What things do we need to measure on a day-to-day basis… targets that will mean we, as a business will achieve success.
What do we need to do?
When we started we knew we would need a system to measure how we were doing; a system that measures the key indicators so that we could focus on the big stuff. Hence why in recruitment we look at results, figures, activity but people rarely focus on staff turn over, development and culture. These are equally important if not more so because they enable the people you have to grow. Very few businesses that get this right don't grow their revenues and profit.
The key to growing any business is down to motivating staff, a great product and thinking innovation, yes businesses do not turn profit, grow and continue to exist if you are not looking at the numbers, at the heart of the business needs to be numbers. Everything should be tested and measured so that you know what works and what doesn’t so that you can systematically think about how you can do things better. Another area recruiters in our industry take to far with KPI'S, weekly reports and micromanaging productivity out of people.
You need to know how the 80:20 rule works in your business. 80% of profit comes from 20% of customers. Do you know who your best customers are? These never the big one off accounts, they are the regular, loyal and trustworthy bill paying kind. Where can you find more? And what about your worst customers, the customers from hell, who make you no money and are a pain in the backside? Why do you keep them? What would happen if you got rid of 50% of your customers!
You need to streamline and have systems in place so that you don’t keep making things up as you go along. A common problem for new businesses and in my opinion especially in our recruitment sector.
Think about what you have to put in to get how much out? You must look at every step of your sales process ( we are always focusing on quality of our networking and referrals this generates more potential leads and business opportunities than asking people to make 30 cold calls, I cannot remember at any stage setting cold call targets in our business) , and make improvements at every stage… get better at spotting and converting your opportunities, keep customers for longer, they will spend more if they feel the relationship adds value, delivers quality and is valued by you.
Use more ways of reaching potential customers. Most businesses use two or maybe three of the possible fifteen or so available channels only and ignore the rest. Your brand, growth and success depends on you getting to as many people as you can in the right way with the right message so consider all avenues: word-of-mouth, networking, advertising, PR, banner ads, referral systems, seminars…
Going back to looking at growth any business owner, manager, leader will state: really great businesses are obsessed with three things:-
Where are we taking this business? (While being aware of the outside environment) (Strategy)
How are we going to sell our product? (Marketing in all forms)
How can our people get on better? (Teams and people)
More importantly, and something I think we have become good at and why we are looking to develop our staff and is the big issue for owners, have we got the bottle to overcome some ‘owner fears’? Often its owners themselves that hold back the growth of their business because they are:
Frightened of letting go of financial control – sharing ownership with others, taking external funds to fund and fuel the growth
Frightened of letting go of management control – sharing power with others (delegation)
To grow a business, any manager or owner needs to recognise that they cannot do it all themselves. We have people in our business who are much better than my self and my business partner when it comes to certain aspects of the business. Secondly always bare in mind and that you will probably need some more money quicker than you think because growing a business is like haemorrhaging cash.
Day to day we never forget the following: How we follow up on all leads, other complimentary things to sell to existing customers (our fixed cost production model). We check every step of our customer journey – how can we make it better for them as well as checking every step of our delivery and sales function – how can we improve the results that you get as potential customers head towards being customers.
Try and measure and test everything it gives you standards to evaluate performance. We ask ourselves can we and all our staff identify and deliver to a client, employee, someone that wants to work with us information on what we are and what we stand for? Can they identify and recognise a problem or opportunity, can they deliver or sort it out for themselves, do they understand the benefits of doing being able to do this?. Our reality check is why should people bother to work for us, buy from us if we are the same as the competition? Is this a good industry to be in? What do our customers think of us? And what do we need to do differently from other businesses?
I think all of the above should and can be applied to any business and job but it just seems that within the creative, digital and marketing recruitment sector that it very rarely is.
I think all of the above should and can be applied to any business and job but it just seems that within the creative, digital and marketing recruitment sector that it very rarely is.
Most of the recruitment companies supply both executive and non-executive recruitment companies for equally long lasting and contract roles.
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