Executive Grapevine | Executive Grapevine International Ltd

5 reasons why recruitment startups fail

Because when they ‘go it alone’ they go alone.
5 reasons why recruitment startups fail


Paul Mizen, Managing Director of The Recruit Venture Group, explains the reasons why some startups struggle to make it on their own…

‘I’m going to do it. I’m going to go it alone’. How many recruitment professionals have said that? Their meaning is clear. They want to start their own business. Fuelled with five years or so experience and the knowledge that running a desk for someone else is pretty much like running a business anyway.

“But, here’s the worrying part – they think they can manage alone. First off, they won’t be. You could launch your business from your spare bedroom and work alone, but you’re going to have a bank manager, some clients and some candidates to keep happy. Or, you could open the doors of a high street office, which means you’ll have staff. Or ‘responsibilities’ as you’ll soon get to call them.

In truth, to make it work, managing your newfound responsibilities and grow a business, you need help. Let me explain.

“You could launch your business from your spare bedroom and work alone, but you’re going to have a bank manager, some clients and some candidates to keep happy.”


You will need finance to launch a recruitment business. Ideally it should come from people who understand recruitment. They should know about its particular cash flow demands and be there to help manage the fledgling company through everything from media costs to taxation issues.


You can write the best business plan in the world, but if you don’t have a sounding board or a mentor you have no way of checking it. You need someone to benchmark your plan and measure your progress. Your bank manager might measure your turnover but that’s as far as it will go. Sound, experienced, advice is essential.


We’re all computer literate, now aren’t we? Well, no actually. Knowing how to drive a PC is a world away from installing fully operational admin systems suitable for a recruitment business. An hour with an Apple ‘genius’ is not going to get you sorted. Neither will that nice bloke from your last company who says he can set you up. You need a back-office worthy of a functioning recruitment consultancy - and you can’t do that alone.


Yes, it’s your business now and you have control. Congratulations. But here’s the thing. You need to be out talking to clients and finding new business. You need to spend time talking to media owners and getting the right deal. You need to be putting in time building the candidate pool. You need to be doing lots of things. And you’re not going to get them done if you’re back at base drowning in invoice queries or fighting for more time to pay a supplier. You might need some help to control the cash flow.


Knowing the recruitment business is one thing, but keeping up to date with new legislation, codes of practice and media rulings is another. When you’re busy starting up it’s difficult to keep up with all of that. Soon, you’re out of touch. And that’s dangerous.

So, as far as we’re concerned, the best way to ‘go it alone’ is to go with us. Because you can’t ‘go it alone’ by being alone.