Part
1
Assess
Viability
Recruitment
Agencies can be very profitable businesses provided that
you are able to deliver high service levels. The
industry is highly competitive as the "barriers to
entry" are quite low. The basic question to ask
yourself is who your customers are going to be. It is
useful to try and obtain prior commitments "in
principle" from a few influential customers in your
region or niche market.
Your
assessment should project how many placements you think
you will be able to make per month. This would be based
on estimates of how many orders your customers will
place with you, what percentage of these you expect to
fill, and your capacity to process the positions.
To
estimate customer orders, ask each prospective customer
how many placements they expect to make each year, or as
a rule of thumb divide their number of employees by 20.
Then assume what percentage of placements will go
through your agency.
The
percentage of orders that you can expect to fill will
vary based on your location, competition, your candidate
quantity and quality, and how exclusive your
arrangements with your clients are. Industry figures
vary from 25% upwards.
Your
capacity to fill orders will often be lower than your
potential since the time spent in filling orders is
often more than initially anticipated. If one takes into
account the time required to process candidate
information, stay in contact with candidates, and
interview time, each agency employee may only be able to
process as little as two placements per month,
especially in the initial period when you are busy with
sales activity and learning the process.
The
main expenditures will be salaries, advertising, and
systems.
Download
the handy worksheet to draw up your initial plans.
