The thought ‘I will need funding’ is often at the top of a budding recruitment entrepreneurs mind when they make the decision to go ahead and start up their own business…
There is a very good and quite obvious reason for this, even the simplest and leanest of businesses is likely to need some funding to get off the ground and survive the first few months. This thought is often followed by a mild panic about how to fund the business and the question ‘where do I start’?
To be totally fair, new business owners have never had to find funding before, and even seasoned business owners hardly do it day in and day out. Funding tends to be a one-off or rare requirement, so naturally, it’s not going to be something you can do quickly and without a little bit of effort.
Let’s start with some ground rules
1. Get a good partner to help you sort your funding – Well, as a business who primarily works with funding recruitment businesses, we would say that, wouldn’t we? But, the fact that this is our area speaks volumes about how true our first statement is. We built our very successful business on providing a service that really works to a sector that really needs it. Getting the right advice in the first place is more than half the battle, which brings us neatly to the next point.
2. Have a business idea that stands up to scrutiny – One of the things that often causes the request for funding to fail is a recruitment business based on desire alone. Passion for what you do is important, but alone it isn’t enough. Make sure your business idea is fleshed out and makes sense as a proposition for funding.
3. Translate the idea into a business plan that will also stand up to scrutiny – Having a great idea for a recruitment business is sometimes easier than making it a reality. A business plan will show that you understand what your business needs to achieve and, just as importantly, that you understand what is needed to get it there. The investment in a business is also an investment in your ability to lead it.
4. Get some reality glasses to look at your business through – Be sensible, be realistic, be honest, be open and be flexible about your potential growth and opportunities. Everything we have been talking about so far is working towards getting a positive decision and the funding you need. The truth is that the purpose of lending money to a start-up is to see that business reach its potential. Enthusiasm and a confident, positive attitude should certainly be part of your approach, but transparency and having your feet on the ground show you know what you need to do and that you can do it.
There are a few principles that you should utilise to underpin the business idea. If you keep these in mind you will find translating the above into a sensible proposition that will be acceptable to a funding process will be much easier.
1. Be flexible enough to adapt to new advice and guidance.
2. Get mean and only spend the money you need to spend. That way you will only ask for the money you need.
3. Be clear about what your business will need. Don’t be so wary of spending that you underfund and find yourself struggling later. Forgetting to budget enough for marketing or premises may mean going back for more money later, and that is much harder to do.
4. Talk to experts as much as you can. Don’t fall into the trap of guessing or assuming you know everything. Don’t be afraid to ask them, most people love to talk about their work.
5. Don’t let the plan go stale. Revisit your plan as often as needed.
In the final analysis, if you go for funding with a solid idea, a good business plan, a sensible approach, flexibility and a realistic understanding of what you can achieve, and what you need to do it, you will probably be running your own recruitment business before you know it… Actually, let me correct that, you will know exactly when you will be running it because you will have planned for it properly.
We offer a free start-up guide, and a series of videos that expand on the ideas in this article on our website and, of course, you can always arrange for a chat with us to discuss your options.
Guest Blog written by Paul Dewick, Managing Director at Boomerang Funding.