Business Planning Critical For Success
Recruitment leaders have been getting better at producing a budget for the new financial year, but to bring this to life it's also critical to craft a business plan with key actions and milestones, says an industry advisor.
Recruitment companies are becoming "a lot more sophisticated in their budgeting and are getting a lot more help from external sources", says Navigator Consulting MD Tony Hall.
There's been a transition away from "suburban accountants" to more specialised advisors on the accounting front, and this is helping recruitment companies "focus on the business of recruitment and not get too bogged down in the financial aspect".
But although having a budget in place is important, the next step is to ensure it goes hand-in-hand with a business plan, he tells Shortlist.
"In simplest terms, what are the really critical actions that the business needs to do over the next 12 months to be able to achieve that 12-month budget?"
Especially during good times, leaders might lump in their business plan with their budget and think that it will take care of itself, says Hall.
But a business plan doesn't need to be complicated and time-consuming to draw up, and it should have a focus on the organisation's "big goals".
"If an owner or a director sits down and really thinks about what the bigger plan looks like, how many people are in the business, and what level of performance each of them needs to be doing to reach that budget, then they can manage that budget better.
"It's no good having a budget and then at the end of the year not making that budget and wondering why."
Hall recommends leaders tie in their personal goals to add an extra level of motivation to ensure the business performs.
"What's the owner trying to achieve personally from the business? And then make sure that that personal goal ties into the business goals."
The next step is to work out the main ingredients of activity that are going to help achieve that plan.
"What sort of metrics need to be in place? How many placements need to be made, at what average fee? How many consultants are going to be billing X-dollars to contribute to that business goal?"
Hall also recommends keeping an eye on how many good quality candidates are being placed in front of good quality clients. "How many of them per week, per month, per year will achieve a really good result for your consultant?"
Mini business plans
Ensuring consultants are involved in planning for their own desk is an effective way to help them achieve personal and business goals, says Hall.
"I like to have a mini business plan for each consultant. Make sure they're really clear on what their personal goals are, and then how their goals at work will tap into that personal goal.
"They might want to buy a house, for example. How much do they need for a deposit? What are they going to need to bill per year, and what commissions do they hope to earn so that they can afford to buy a house?
"Then every day when they go into work, they are hopefully going to be very motivated to execute on that mini business plan and achieve their personal goals as well as their work goals."
In order to avoid distraction, consultants need to be "very clear" on the critical activities they need to be executing daily, he notes.