Mark Neilan - Exiting a recruitment business and becoming a recruitment entrepreneur investor

Welcome to the Recruitment Rollercoaster Podcast. My name's Hishem Azzouz. Today I'm very excited to be joined by a chap called Mark Nealon, who actively invests in recruitment startups and is on a mission to help 50 recruitment entrepreneurs maximize their potential. And previous to Mark doing this, Mark was one of the owners of Indy James. Mark, thanks for joining me.

Hello, thanks for having me.

And for those that can't see, Mark, you're wearing a fruity, nice fruity shirt, mate.

Well, you know, it's not quite a beater, but that's what I thought. I'd bring a bit of a beater to your podcast. This is what I would wear in a beater.

Look, let me just start with how, um, how have things been for you over the last couple of months? What's been going on in your world? How have things been?

I'd say all right now is the short answer, you know, with a lot of touching wood. Just mad, you know, I think there was that crazy bit at the start where lockdown came in and everybody had to deal with that very, very quickly. And so there's the getting over the shock myself, to begin with, but then helping the people I invest in to— funny enough, I can't— maybe a story around that. Get off the beach was kind of the tagline.

Get off the beach.

Yeah, yeah. Right, do you want a story straight away?

Yeah, let's go, let's do it, let's do it. Get off the beach, talk to me.

All right, so anybody I invest in will know what get off the beach means, right? So that's— I like, for my sins, I've always liked military history, so love reading about D-Day. I've been over to Normandy only a couple of years ago, and there's a fella, there's a guy that I'm not sure— have you ever heard of a guy called Norman Cota?

No.

General Norman Cota. All right. General Norman Cota sprang to my mind the day after lockdown because he was in his late 50s and he was the highest-ranking general that actually went in with the troops, with the Americans, onto Omaha Beach. And he was in the second wave, but so by the time he got there, you know, very, very bad situation, people getting wiped out all over the place, and basically the American GIs were pinned by, you know, just kind of hide behind anything, anything they could find, and they were all basically, you know, just terrified and not moving. So what does he do? He gets there, I think 3 people got wiped out as he got off the landing craft, and he's basically just stood up, basically walking around, and he was basically— what was the quote that was attributed to him? "Gentlemen, there's only 2 types of men on this beach: those that are dead and those that are about to die, so get off the you-know-what beach." And that was the reason why that sprang to mind, and how, like, we were talking about that a lot, myself and my investees, in the early stages of lockdown. Is because when something that crazy happens, shock kicks in. So I think what you can either do is you can either freeze or you can keep moving. Yeah. You freeze, you're dead for sure. If you keep moving, you know, at that time none of us knew what, what, you know, what was in store.

That's a good analogy.

Yeah. So it was get up, it was just keep moving, get off the beach.

Get off the beach.

And, you know, and they did.

They did that very, very—

you know, I'm— obviously I work with a lot of early-stage smaller businesses and just couldn't be more proud of them.

Amazing. Love that, Mark. Straight in there. Military story. I think no one's ever started this podcast with a military story analogy. Awesome.

Yeah, well, welcome to my mind.

Awesome. But look, how I always like to start this show is, yeah, how did Mark Nealon enter the world of recruitment? Let's just start with that story.

Okay, I answered an ad— well, my mum was sick of me living with her and paying no rent in my early 20s after uni.

And where did you live?

I now live in Disbury, South Manchester. Then it was also South Manchester, a place called Heaton Moor, with me, with my parents. And it was an advert in the Manchester Evening News. Very small advert, and it said, honestly, something like, do you want to earn loads of money? You might be good at football. If so, call this number. That was it. So there you go. They'd kind of hired the— they'd identified the competencies that they wanted. And yeah, applied to that and fortunately got hired. And, you know, that was the first of two jobs I got sacked in, in the first year in recruitment. Before I ended up at Finley James. You mentioned them before, they're reasonably well known. To start with, I was the guy making the brews.

Really?

Yeah, the guy making the brews, and you know, one or two things happened, ended up owning half the business and reasonably successful. But yeah, unemployable is probably one of the words you would use to describe me.

Okay, let's unpack that then. So got into the industry, which you've now been in for what, over 20 years? Yeah, around that. Yeah. So enter the industry. So yeah, what, ended up not keeping the two jobs, the two first recruitment jobs?

No.

Ended up at Finney James, and we're talking— obviously, so I've had, obviously, as I was saying, I've had John Gorham a couple of times that people should know and associate with Finney James, and So what I saw online, just to frame up for context, is you worked at— was at Finney James for 13 years, it looked like.

Yeah, yeah, yeah, yeah.

So it's a really long time. So let's just unpack that a bit. So firstly, when— so when you joined Finney James, so did you actually join them as a consultant then, or what was the—

yeah, so, um, my first job there, I guess, was, um, it was business development, you know, 100 calls a day, done all that. Actually love all that, still love all that, that little bit. Yeah, yeah, love the business development side of the game. But that's, you know, that's—

what did the business— just talk, give me a— paint the picture quickly, like what did the business look like at that point? So we're talking, what was it, like 2003? 2003, yeah. What did the business look like? How many people was you with? What did the business look like at that stage?

There was myself and John and then 1 to 2 other people.

Okay, it's a really small business.

Yeah, yeah, but the business, it was backed initially by a VC, didn't get off to the quickest start, and then for one reason or another, what ended up happening was he kind of pulled out All the people left and it just ended up being myself and John owning half the business.

Okay, cool. So what did that journey entail then, Mark? Because that's where it started, right? But by the time you left, just to help people understand listening, by the time you left, 13 years down the road, what business did the— what did Finley James look like when you left?

Yeah, multiple offices, doing business internationally, 40, 50 people. You know, successful, successful business, left a successful business, still a successful business, when that was from two blokes and a couple of phones, essentially, in a very great way.

Why do you think it was able to sort of, up until you left, why do you think you was able to do that? Because a lot of recruitment businesses don't get to that point.

Yeah, I believe somebody told me this the other day.

I can't remember what the exact number is, but it's something like 80% or so, uh, sub-10 staff.

That's it. Yeah. Um, I, I think, I think it's people. It is people, drive, teamwork. Um, um, I think, I think drive has a lot to do with it, you know.

What, your own personal drive as a leader, or Yeah, yeah, okay.

Yeah, you've either got that or you haven't, haven't you? I think that's, that's a, that's, I think that's a blessing and a curse at the same time, and it's something you've got to harness and control, you know. Even, um, you know, when you start off, there's something great about wanting to rule the world, you know, metaphorically. Um, you've got to do that in a safe way.

Right, or what are you talking about, preventing sort of burnout, or—

yeah, yeah, but yeah, the whole burnout thing, I've, you know, I've done that, mate.

Drive, people.

Yeah, try to see, you know, you need good people, uh, drive, um, I think a lot of it, that's, I, it, it comes down to mindset. So, um, I've learned this probably, I've probably learned more about this since leaving Finley James than, you know, while she was there. Yeah, yeah, I think, I think you, I think a lot of leaders have great natural mindset, and I think part of that is you've either got that innate drive in there or you haven't. But I think also when it comes to the culture of your business, mindset is still underrated. Yeah. And I think that's for leaders and for the people in recruitment businesses. I think if you've only got to look at what's happening now, you know, all of a sudden there's a lot of people, you know, really focusing on mental health, and resilience is a buzzword. Something I've talked about a lot recently, which is you know, should resilience be something that is just expected, or, you know, can, can you— can we do it? Yeah, yeah.

What, um, what were some of the sort of biggest learning mistakes that you went through at Phineas James before you left?

Uh, oh, I mean, you just, just name all of them, really.

But what comes, what comes up for you though when I ask you that? That you think no doubt other people would have to go through or can expect?

I would say that you need to have a really good plan and you, before you just go for growth, have a really good plan before you take shitloads of action.

Yeah, I think a bit more strategy.

Yeah, otherwise you can end up going for growth and then what can happen before you finally get it right is you get the whole deck of cards, it can implode, implode before you, you know, but that's, that's part of the learning process, isn't it? It's only about breaking things that you end up getting it right. Yeah, in the end.

Okay, and what did you, did you seek any like Did you receive any good advice while she was growing a recruitment business, out of interest?

I'd say a lot of it, for quite a long time actually, was done on a self-taught basis, really. Towards the end, we did have a non-exec, someone helping us, and that was great.

Why was that great?

Because You can take shortcuts. So you can— I think that's the benefit of good advice, is you can either spend ages working it out yourself, or you can go to somebody else who has paid what I call the entrance fees. Yeah, and just, you know, I'd rather— as much as I will say that mistakes are good and that it's only by making, you know, you You never lose, you either win or you learn. As much as you learn from your mistakes, I'd rather not make them if somebody can tell me, look, do that and that's going to cost you 20 grand. And I know that because when you do that, this happens and this happens. I'd rather learn from other people's mistakes and not make them. Yeah. And then go and you know, do it the noble way, make the mistake myself, lose 20 grand and all the rest of it. So I think that's what a good advisor will do. They will, they'll help you benefit from either their mistakes or just things that they know won't work. And, you know, that can accelerate your journey.

Pay the entrance fees. I like that.

Entrance fees, mate.

Yeah, I like that.

I've paid a lot of them. In fact, most, I think most things of the things that the people I help get value from are probably stories of things I've done wrong.

Done wrong. Interesting. Okay. Really keen to talk about your journey in sort of backing recruiters and sort of the common things you've seen, etc. But how hard was it? Just talk a bit about how hard it was, because I think people can relate to this. Like, how hard was it for Mark to leave a business that he dedicated a lot of time to, no doubt meant quite a bit to you? How hard was that, making that decision for you personally?

Yeah, it was incredibly difficult and at the same time easy, you know. So the, you know, I think anybody who's invested, you know, over a decade of their life into something and you've got, you know, relationships and bonds and all the rest of it, you know, it's really difficult. You know, if you're somebody who puts the heart and soul into something, then, you know, if you leave that, then that's going to impact you. And it did. But easy in the context of when you just know, when you know, you know, you know, when it's time to kind of get off the bus and go somewhere else, it's time. So you've got to— yeah, I think so.

There's that friction though, isn't it? There's that— but yeah, what you're talking about, that friction between, you know, but also I put a lot into this.

Yeah, it's, it's how much you trust your instinct and how much you back yourself, isn't it? Yeah. You know, and I think, I always think, don't have any regrets. And, you know, I'm really big on, like, purpose and, you know, aligning to that kind of higher purpose, vision, whatever you want to call it. And, you know, if it just don't feel right, you've got to go and you've got to keep moving. You've got to go somewhere else.

It's just a matter of time, isn't it, before it boils over or before you get to a point where you may even be more unhappy than where you was. 6 months ago, 3 months ago, if you don't listen to that and try and bottle it up, that sort of innate, yeah, sort of voice in your head from your stomach, whatever it may be, going, Mark, I'm not sure this is right.

Yeah. Okay. The voice gets louder, right? There'll be people listening to this now who aren't happy. Yeah. And if you know the reasons that you're not happy and you're the really strong you know, you know, they're kind of not going to go anywhere, nothing's going to change really, you know, they're really strong feelings, then most of the time the thing that stops us from acting on that is fear.

Yeah.

And I'd rather— there must be so many people out there who don't do anything about it. I think a lot of the time it's because they're, you know, same old reasons, isn't it? It's money. 'You know, I'll do it when this happens,' or, you know, kind of bat it, kick the can down the road. But I reckon that's more dangerous in the long term because you're going to end up eating you alive. It's going to gnaw away at you and you're going to end up with regrets. So I'd rather always just think, you know, go my own way, listen to— it's more than just instincts and gut feeling, it's things that you've learned. You know, we know as recruiters, don't we, that you know, things like, you know, counteroffers. You know, once you want to leave once, you're probably going to want to leave again. So once that genie— once you take the lid off the bottle, you know, you kind of got to do something about it or you'll end up more unhappy if you don't. That was my way of thinking about it anyway. So it was very difficult, and yeah, it was quite scary at the time, actually.

Yeah, I can imagine. So Just for context then, Mark, final bit of context really. So, and then, and then how long, how long has it been since you left Finley James? Um, it was about, about 3, 3 and a half years, 3 and a half years. Yeah, cool. So let's just talk about those first 12 months after leaving, because no doubt that was difficult, right? Because what, as you said, decade of your life, you knew what you had to do every day. You have certain people in your life for the last 10 years, all those things, and all of us obviously out of choice, obviously. And we're talking about why it was important for you to make that choice and make that jump. But yeah, how was that first year for you? Like, how difficult was it to get out of that? Because I think that's, again, we're talking about the part that people are fearful of. So what was that first year like?

Uh, in the end In the end, it was all right, but I, you know, I probably got pissed for about a month. I told the story a few times, you know, and then I think I stayed in my bed for about a month, you know. That's the thing, I was literally, yeah, you know, it's weird actually because—

Why?

Oh, I just got really you know what, there's so much stuff going on in your head, you know, you can't do anything because you, you know, you— that's basically what you agree not, you know, you agree not to do anything. I didn't know what I wanted to do, to be quite honest with you. At that time, um, I thought me and recruitment was done, you know. And, um, uh, yeah, just, just feeling—

because how old was you at that point?

At that time, I would have been 38.

Yeah, exactly. So that, I think that's part of it as well, right? 38 years you've been on the planet by that point and you ended up getting, yeah, drinking, leaving obviously the business that you're a big part of. And it's like, fucking hell, I'm 38, what the fuck do I do now?

Yeah, you know, I'd done all right out of it, but you know, this is the way I left the business. It's just not the way you leave a business. It was like, fuck this, I'm off. Basically. Yeah, yeah, yeah. And so that would be another tale that I would tell any other people I help. It would be like, listen, this is how not to do that. But that's life. And it's like, you know, everything, like, I'm honest to God, I'm like, so at the time it was, I was just really struggling to process things. What I realized looking back is I wasn't educating myself enough because I've become kind of sick of the world and sick of this and sick of that in one way or another. I wasn't developing, you know, probably for the past few years there, as is my normal way. And that's actually what ended up kind of getting me moving again, is just going back to basics. And rebuilding myself really, and just learning this, that, and the other. And, uh, yeah, um, not— I'm really grateful for that time in my life now. And now, now I look back at it and it seems like, what was a— what was I bothered about? Why was that? But yeah, but at the time it was all-consuming. And, um, so how did you get your head above the water?

Because I feel like people can relate to that and may even find themselves in a position now, Mark, where been on furlough for the last 6 weeks, 12 weeks, and they've just been told, hey Mark, unfortunately there's not gonna be a job for you. Whatever future you had, unfortunately is not there. Wherever it may be, right? I feel like people may be in that position or might find themselves in that position. So I guess obviously you said around what helped you was recognize, like you just started to spend time on yourself, which is something that you lacked, but What helped you, sort of looking back, what really helped you overcome that?

Right, I'm going to write a few things down now so I remember to say these, because there's a few things, there was a few things, right?

Let's do it.

A few things, right, okay, that one, that one, that one, okay, right, so I'll start with my mum. So very, very lucky. So, uh, support network. Yeah, but like you wouldn't believe. So people think now, oh yeah, you know, Mark invests in recruitment businesses. What they don't realize is that started with me and my mom, and my mom saying, come on, mate, you can do this. What's up with you?

That's amazing.

Yeah, where's me boy gone? You know, and that was— and, you know, if it wasn't for her kind of saying, look, believe in you. Yeah, yeah, that. So I think we all need a kind of— we all need someone to kind of remind us that we're all right, you know, and to keep going. The other stuff was kind of some technical stuff, some stuff I did instinctively, which was good, which was I just, I unfollowed everybody within the network that had anything to do with the company that I left.

So you controlled what was entering your world?

Yeah, yeah.

So that you recognized was ended up sort of triggering thoughts or bad things?

Yeah, yeah. I realized that, look, that's nothing against anybody. No, of course not. I just had to look after my own space.

Yeah, of course.

You know, I left a good business, but it's no good to me seeing how well they're doing every day and lunch clubs and all the rest of it. That wasn't helping me, you know. So I employed everybody, including my brother who worked there, you know, when I left. And, uh, sorry, I unfollowed everybody, including my brother who worked there when I left. And that was a really clever thing that I did, actually. That helped me just start putting one foot in front of the other and get moving again. And, you know, I'm trying to think, you know, what else, what else did I just— I just started like, I started surrounding myself with other really positive people, and I just focused on filling my mind full of positive things. And I was on, um, um, uh, Dr. Hannah. Have you ever heard of Dr. Hannah? I think it might be Dr. Hannah She's brilliant. She's a psychologist that helps one or two of the people that I help, and she was good enough to go on a webinar with one of my investees the other day. And what she was talking about was how to pull yourself out of a negative brain loop, actually reminding yourself that, you know, you've been in scrapes before and you didn't quit. And that's the advice I think could be helpful to anybody now, is just, just think about, you know, you will have been in a tough situation before and you've managed to get through it. And it's like, it's not, it's not helpful in the same way that— it's not helpful to hear it'll be okay and just pull yourself out of it. It's more helpful to look at something you can do about it that's proactive. So that's where I got to reading, but just reading books and just try to be careful what was letting in that was negative, and to try and drown out the negativity with positivity from, you know, some pretty well-known books. And, um, just resolve, just remember that you've, um, remember that you've been in a bad place before and you found a way to keep going.

Yeah, good anchor point to have, isn't it?

Or to anchor to that Yeah, yeah, and, um, yeah, resolve to come back stronger.

Amazing, love that. Thanks for sharing.

It's all right.

So then you ended up investing in people, well, recruiters.

Yeah.

How did that come about?

And that came about because, uh, kind of quite accidentally really, you know, um, you know, one or two people, uh, that used to work for me you know, for some reason wanted something to do with me again. So, you know, I kind of thought, all right, let's just try and help some people out. And one thing led to another. I realized I had more to offer in that regard than maybe I realized. Quite enjoyed the coaching side of it, and it just felt right, you know, it felt like step forwards for me really at this time. Teaching people to do what I've done type thing, you know.

Yeah, for sure. And how— so how— just for how long have you been doing that for now?

I've been doing that for 2, 2 and a half years, say.

And how many people have you got involved with?

Uh, I think there's currently 7 investments, but about 1 or 2 other people in slightly different ways. And There was one that I invested in that didn't, didn't work. Hey, that's what you learn from.

Yeah, exactly. So let's just talk about this for a second. One thing that I'd be really interested in, which is no doubt something that you'll continuously learn, but obviously got quite a bit of experience now. But what are the typical qualities you look for when selecting someone or thinking about or getting to the point where you're like, right, Hishem, you're someone that I want to be involved in. What qualities do you look for, would you say?

All right, well, somebody— for me, well, make this what you will. So yesterday somebody approached me with a person as an introduction, and my first question was, are they a nice person?

Good question.

Right, so that's it. So, um, I can't be arsed dealing with tosspot. Yeah, life's too short. Yeah, I work with people, you know, the way it's set up at the moment, certainly the next— the people I work with now, work with very kind of closely and intensively, you know, I'm all in with them. And, uh, that's going to be the way and the case for the next— let's say it's the next 5 people I invest in. So I'm going to— you know, we all— one thing's for sure We've only got one life, and so I, you know, the people I invest in, I have to share it with them. So I can't be bothered dealing with idiots, you know, people just aren't nice, you know. That's the first thing. Then they need to be intelligent, they need to be coachable.

What makes someone more coachable?

Um, can you, um, imagine yourself Starting thinking one thing and being able, based on knowledge and fact, to change your mind. Can you change your mind? Because if you can't change your mind, if you're just going to blindly dig your heels in, then, uh, too much pain for me and for them, probably more for them. Um, but, um, I want to work with people who want to find the, uh, the, the best way of doing something, not just their best way of doing things.

I like that. Intelligence, coachability. What else?

Nice person. I mean, we talked about resilience there before. Um, think about resilience is resilience. I think you— best way to get it is on the job. But what we've got to do, we've got to look for people who understand the amounts of pain that will be involved if they set off on this path. And that's if they want to scale a business, right? So there's no— I sent something out to my investees this morning, which is basically like, look, you know, for you guys to realize your potential, you're probably going to need— you're probably going to have days when you're going to lose 6 figures worth of deals in one day that you were expecting to get. You're probably going to lose your best biller. You're probably going to have a situation at some point where your best biller is going to basically set up against you. You know, there'll be betrayals in there. People are going to let you down. People are going to be doing all sorts on Christmas dues and You know, you're gonna guess another thing you're gonna get is you're gonna get more recessions. It might not be a pandemic, but you're gonna get loads more. So if you're gonna go and set your own business up, you need to realize that loads of shit is gonna happen. And that is how you get— well, it's a combination, you know. Like, bad times shows who you really are. Yeah. But in, but in this, in the same way bad times make who you are even better, right? So I think what I'd say is, it's like everybody wants the baby without the pain, right? Everybody wants to be the entrepreneur, right? Anyone, so many people can do it that might not have. In fact, some of the people I help now, some of them didn't think they could do it in the first place. Loads of people can do it if they're willing to have the courage and give it a go. But you've got to know You've got to be, basically it's like you're going to sign yourself up for a serious amount of pain, but the great news is you will be a better person, not just a better professional, you'll be a better person for it. So I'm a big believer in that. That's part of the reason why I'm doing this now is because I know for me to execute on what I'm trying to do, I need to be a better person than I was at the start of this journey to make that happen. You know, so I think some people think it's a good idea to stay in the employed ranks and think that's safe. I think another thing, that is whether people like it or not, it is true. Is having a job really the safest thing? Your destiny in somebody else's hands completely and utterly? I'd rather be captain in my own ship, thank you very much.

Yeah, nice. It's an interesting point you made that, because I've felt that for over the last year, business of just me being only going for a year, but the last 3 months have really sort of shown that to me, that actually being a small, agile, one-person small business, whatever, is actually a really strong position to be in, in times of real adversity. And then at the same time, being captain of your own ship but having a lot of people on that ship, that's a whole different— that adds whole different challenges, but again, you still have control, right? Which is what you're talking about, and with full responsibility.

Yeah, I mean, I like the businesses I invest in. I want them to go for growth, right? And I like to think that the businesses I invest in, you know, they'll be great businesses to work for, and there'll be compelling reasons to stay there and be retained. Uh, I think my point is a lot of people won't go and start their own business because of fear, most common there being fear of failure. But people will put excuses out there, you know, and yeah, there are excuses. People will say things like, you know, it's safe, I've got more job security. Well, I remember talking about this in the financial crisis. You haven't got job security. How much job security you really have gets basically exposed in a crisis whereby if you work for a bigger company, one move, loads of people get cut, you know, and you've got no control over that. So I think it's taking a stoic and a balanced view of job security. If job security is the reason for not going and doing it on your own, well, how secure is it really when the going gets tough?

So the common fears that you see then is job security, fear of failure. Anything else you think that sort of you've noticed is common or from the conversation you had that have really prevented people from taking the leap?

Fear, mate.

Fear. Just fear.

Yeah, it's fear, and that's dead normal. It's really, really, really, really normal. But I mean, I've talked about this quite a lot. I mentioned the word there, stoic. I love reading about the Stoics. You know what I mean? People— there's a couple of great books on that, but people, you know, are looking for a crystal ball. What's going to happen?

Yeah.

What do we do about it? Actually, one of the smartest things you can do is look 2,000 years that way and look at what people like Marcus Aurelius were talking about, which is let solid principles guide your decisions. Go back 2,000 years ago, same shit was happening. People were terrified of change, right? And that's the reason people, you know, people, uh, are more— unfortunately, as human beings, we're more motivated by what can go wrong when our threat system gets activated than what can go right. And, uh, Tim Ferriss, he's a big fan of it.

Yeah, he's awesome.

Yeah, yeah, he's a big fan of the Stoics and and he looks upon decision-making, he talks about making your decisions in a stoic way. And stoic, people think it just means stiff upper lip and all that stuff, but it doesn't. It actually means making a balanced decision. So when we look at maybe starting our own business up, what most people will do is, oh shit, what can go wrong? Do you know what I mean? That's what everybody does. I bet you did it, I did it. I know I did that, you know? It's like, oh, and you're terrified about what can go wrong. But actually, especially for recruiters, the way it's been advised to me that you should be— the stoic way of looking at that is, all right, look, if it goes wrong, what are the chances of it going wrong having a permanent negative impact on your life? With the keyword being permanent, because most good recruiters, if it goes wrong, you're not going to struggle to get another decent recruitment job, right? And but then what you've got to do is, after asking that, is you've got to ask the question, if it goes right, What are the chances of it having a permanent positive impact on your life? And I think there all you've got to do is look at all the people who, people like yourself, people like me, you know, as we discussed before, I'm completely unemployable anyway, so I've got to make this work. But the permanent positive impacts, you know, sure, you've got the financial gear in there, but it's also the sense of pride you have in what you're creating and what your family feel about that and you know, if it goes right, the likelihood of that having a permanent, permanent positive impact on your life is really, really high. So actually, when you balance up in a Stoic way— yeah, permanent negative, permanent positive— more often than not, it's worth going for it.

Yeah, no, I like that. So let's just get into a few more sort of granular things. What would you say, from what you've seen, the conversation you had, would you say makes a market or a business person more attractive than others?

Talent short. Talent short niche market.

Talent, what do you mean talent short?

Availability of talent, so there needs to be a shortage of candidates in that area.

Okay, for you to go, yeah, there's a good opportunity here, why does that make that more of a better opportunity? Ah, right, sorry, I thought you talked about what market the recruiter would be focused on. Oh no, sorry, so what I was interested to get your thoughts on is like what makes So you've got two recruit— two guys speaking to you, or ladies going, hey Mark, thinking about this. What do you think? What would make one more attractive than the other, do you think, typically?

Just the person. Just the person. How kind are they? How driven are they? Are they smart? Do they understand what they're letting themselves in for? And is it somebody that, uh, want— is it somebody who wants to, wants to learn? You know, if you've got all that, you've got the full You've got the full deal. And also, other things you have to check, you have to check on other things like mindset when it comes to money and things like that. That's another way people blow their own legs off, especially recruiters, funnily enough.

What do you mean, mindset to money?

People, a lot of— oh God, you're getting on this. This is— I feel quite strongly about it. I don't know if it's controversial or whatever, but a lot of recruiters have terrible money mindset. A lot of people would love to hit the big time, yet will struggle because of what I call lifestyle inflation. So the more they earn, the more they just crank up their own overheads. You've heard the concept of delayed gratification?

It makes sense in my head when you say that. Okay, so against the whole instant gratification, which is more of the world that we're in.

Right, instant gratification, delayed gratification. So this is something I'd say to anybody who's thinking about going for it. It's like, uh, you know, adhere to— I love principles, you know. I love like the principles that, again, it would have been principles 2,000 years ago. It's like, guess what? Spend less than you earn. How's about that for a principle, right? Put money aside for a rainy day so you don't run out of money. You know, again, that's really— people who've done that now are going to be in a better position based on everything that's going on. But if you can delay gratification and you're prepared to work hard enough for long enough, you will get there. If you are not, if you want it all too quickly, then you might just be— if you're not willing to invest in yourself and in growth, then you may never hit the big time. And where I find that's interesting is I think a lot of the time, you know, I wonder if recruiters are sometimes intentionally bred to leverage themselves up to get the bigger car, to get the bigger house. And look, big house, you know, reasonably nice house, whatever you like, you know, I believe in thinking abundantly, go and get it, that's what drives you, go and get it. But I just wonder sometimes whether people are led down that path and encouraged to over-leverage themselves so that they're on the hook and have to keep billing to that level to make the boss more money, right? And whether that gets you into really, really bad habits, whereas actually You know, if you look at, um, people to achieve their true potential, very often they need to be working towards a big, big purpose. And very often that's more than just money. Money's often part of it. Money's important to me and everybody else. And why not? You know, you want money, you could do something, gives you more choice, you can do more with it. But like, I think there has to be a point where you Very often to get a business going, you have to invest in it, right? You know that with your business. You know, you have to sacrifice. You know, you don't just very, you know, a lot of the time you don't just start your business and it's, you know, it's at optimum success level from day one. Very often, you know, I remember when I first started Finley James, me dad lent me 3 grand. I think it was 3 grand. Now, I had him paid back in a couple of months, And but I wasn't earning that much to do it. I was willing to delay my own gratification and not go out and get the car and all the rest of it to allow myself to keep investing first in myself, then in my business. And then before you know it, you're up, off and away, and people will come say, oh, you've done all right, mate. But some people don't put it together, really. It's like you've got to be prepared to sacrifice and delay your gratification if you want to hit the big time. And I think a lot of the time, and anybody who's willing to do that and take pain and take the hits, you can do it.

Yeah, no, honestly, I completely get it. And it's something that I always try and encourage people to speak about on this because I think it's really interesting what you say, because I think like way more recruitment businesses will talk to their employees about what they can spend their money on in terms of the material things, etc., rather than how they can invest their money in to make them have better financial quality long term. Right. And I think, yeah, it's come up quite a lot on this podcast, Mark. So I'm glad you brought it up, that how many people sit down with you once you've got that biggest paycheck you've ever got to say, hey, Mark, I'm not the guy to tell you what to do with your money, but this is what I learned when I blew my money. And that this is something to consider, right? And, uh, what's even— to sort of go a bit deeper on this— and what's even more interesting about this, I think, and spoken about this podcast a lot, is that what you find time and time again is that when you do, uh, get to that point where you can afford that car or whatever it may be, that actually you feel empty and it isn't as good as you hoped, or it only lasts for a day or whatever. And then as you said, you're then in that loop of chasing the next thing or whatever. And that's why it's even more important as well, because if you're then always chasing the material thing, the external thing, and then not feeling fulfilled, you're in even more trouble, right? So I think there's layers to it, and I'm really glad that you spoke about that. So delayed gratification is important if you're serious about growing a real recruitment business. Yeah, absolutely love that. Um, Just so, like, what I wanted to say was how important then, on talking about this, like, how you mentioned with your journey with Finney James, but how important is it for sort of recruiters to have a pretty solid business plan when going out on their own? How important is that? How important is that to you when you're looking to get involved and back people to go out on their own?

Yeah, yeah, I mean, often, yeah, I'd say very important if they're not— if people aren't capable of, um, but I don't think it's as important that you go into the micro in terms of, you know, knowing to the nearest pound what, you know, a LinkedIn Recruiter license will cost, but I think it's not that difficult to project forwards what you're going to do month-on-month sales, and you want to see ambition, you know. 3 words that are in my mind that I'd say a lot to the people I help at the moment: what is possible? What is possible? I think very often what we'll do when we're putting those business plans together will, you know, will put limit— our own limiting self-beliefs or our own fear of failure will be reflected in that business plan as people look to play it safe. I like, I like, um, there's a couple of ladies I've invested in recently, and honest to God, I just love their ambition. I just love it. We're gonna go and do it, you know, working— you've just started up in a fucking pandemic, and they just love it. That's how much they love recruitment. And it's like, you know, there at the start, it's like 'it's a bit tough at the moment,' you know, 'don't care, let's do it,' and they just absolutely love it and they're really ambitious and they're not letting external circumstances beyond their control impact their plan and they're going for it. And I just think that, you know, they're looking to find out what is possible as opposed to restricting themselves with a plan. So business plan, really important, and I like to speak—

yeah, but don't feel like— yeah, don't feel like you need to be bogged down in the micro. It's more about the macro and just be smart with where you want to be, the vision, and obviously the core things that I guess are going to contribute to you. How can you get there? What's going to make you different? Those things that are important. Okay, so you've mentioned it a couple of times around you want the people that you get involved with to have the mindset of wanting to grow their recruitment business. Obviously not every recruitment business has to have that mentality of growing, but the ones that you've ended up involved in do, or that's something that you look for. Let's just talk a bit about how— what do you think has been the sort of common— what's been one of the common things that you've seen in the people you've got involved in that has helped them grow more effectively, quickly than others, do you think?

Drive and learning ability. And, uh, yeah, that's, that's, that's the key. For me, that's the key thing, is how quickly can people learn and how driven are they and can they take the hits and keep moving.

Okay.

Because the hits are inevitable.

What do you mean by hits?

Those things where you're gonna get people leaving, you're gonna get deals dropping out, you're gonna get, you know, that's the thing that never ceases to— I forget about it, you know, it's like, you know, you forget that when you're helping a person who has not run their own business before, you know, when you're talking about them making an investment, uh, you know, if I say to them, right, go and deal with Hishem, Hishem costs X at the start, that a lot of them are still in the mindset that's like the price of a holiday. It's not like that. It's like value tokens, you know. It's just what you do, just go and do that. So it's basically thinking like a boss quickly. As opposed to with an abundant mindset. So that's part of it, it's people who can do that quickly. And taking the hits, it's, yeah, you know, everything is exaggerated when it's your own business. So if you get a deal, that feels better, but if a deal goes the other way, then that feels a lot worse. So it's been able to basically, yeah, I think that's probably the key thing actually, it's that It's that balance of— it's the emotion, it's the emotional regulation. So if you're too, you know, if you're too kind of woohoo, you know, where you get the deals coming through, if you're getting, you know, carried away, we all need a bit of that, but if that's too much, then you might well find that your low is too low when you get a dropout or you've had a bad month. And from my point of view, when I'm working with people You just want the balance, consistency. You want to celebrate every little win, you know, but you don't— I don't want to be picking people up off the floor every time a deal doesn't go the way I want.

What about, just a bit granular here, but it'd be good to get your perspective on this, just because it's come up a lot on the podcast. It seems to be really common in recruitment businesses at scale, and reading a really good book at the moment that sort of drums home this message called The E-Myth, which is like a proper renowned business book, which is great. And what I wanted to get your perspective on is, because something that I've seen and always spoke— ended up speaking about is those businesses that end up growing, end up scaling profitably in the right way, they approach sort of how they— what they invest in their business in terms of processes, maybe even people, in a way where they're thinking about They're investing in things now before they get there, if that makes sense. So like, if I know I want to get to 20, 25 heads or a certain net fee income, and I know to get me there I need an operations person or I need to document each process or whatever, instead of having the mentality of I'll do that when, or I'll do that when I get to this point or whatever, people that end up scaling their business do it today. And they— does that make sense? I don't know, what's your views on that?

Well, you know my views on that, you know, my startups are getting loaded into you, don't they? So I'm a big— but you know, the thing is, I think I can't be arsed anymore messing around. I paid my entrance fees, you know, what we were talking about before, and I'd rather pay a bit of money to save time, especially when paying that money is getting best-in-class people like yourself. To help support that aspect of a business. So, yeah, very, very on board with all of that. What I try and do is I'll try and make sure they've got the best tech stack locked and loaded day one, you know, and they've got the best experts, whether it's, you know, the sales consultancy or the branding consultancy, or, you know, my guys will get assistance, they get a PA day one, You know, people actually have more support when they come and start a business with myself than they had working for a bigger recruitment business where they were sharing one marketer amongst 50, the other marketing consultant as well. So I'd like to give people— what I remember with that, you see, I was always a fan of— I'm a Manchester United fan, so I'm sure that won't appeal to everybody, but anyway, I remember Alex Ferguson. Talking about how he looked at his best players almost like thoroughbred racehorses, and what he wanted to do was give them everything, everything they could ever need, so there's no excuses, just like a thoroughbred racehorse that basically live like kings. And I wanted to try and apply that approach to— my thought was, well, if I can get best-in-class people, no pressure, Hishem Azzouz, to support them with those aspects of their business from day one, then surely they should go further faster, you know. So, uh, yeah, spend a couple of quid, get the best people.

And just quickly on that, because I think it's really valuable, always like to go into particular things, but just a quick one, like, what are the sort of non-negotiables for you? If I had limited resources, limited money, and you was to start a recruitment business tomorrow, what would be like the non-negotiables that you would invest in that sort of you're taking that mindset of like, I want the best, I want the things now because I know it's going to help me in a year's time, 2 years' time or whatever. So what would be your non-negotiables? Would it be, I'd have to get the tech stack right and then I'd look to build on that? Would it be that I want to get the tech stack and the PA support? I don't know. What's the sort of non-negotiables for you, do you think?

You know, the tech stack's taken a little bit of time actually, you know, still working on that and refining it, but it's refining it now as opposed to The start where I just didn't know what I was doing. Marketing is the short answer, mate.

Really? Yeah. Okay, all right.

Marketing is the short answer, and I'm not just saying that to give you a big up, but—

No, that's interesting. What about how important are processes? Because I think that's something that stands out for me, because if I think of my recruitment journey, joined the business of 8, sat down with the owner of the business, Hishem listened to me on the call for a bit. His, do you know what I mean? I think again, time and time again, those businesses that ended up in 40, 50 plus, they documented each and every process. And like, how important is that?

Well, look, I should caveat, of course, everything I've just said there that, you know, I'm taking it, it's an assumption that you're an amazing salesperson because everything is about the hustle. So I'm looking at making, giving you some extra stuff to make you an even better salesperson, get you more leads and all the rest of it. You know, but the systems part of that, yeah, it needs to be repeatable. 100%, 100%. Otherwise, what you— so what you want is— you can chat to somebody about this recently— what do you want? Do you want rainmakers or do you want systems? You kind of want both. So you want amazing salespeople You, uh, the machine operators who are part of an amazing machine. For me, that is optimum. So if you want, like, uh, one of the things I have absolutely— I must say this, hopefully it's coming through— I love what I do. I look— because I just genuinely love helping people. But also what I love doing is I'm on— I feel like it's been great going back and rolling the sleeves up and getting back involved at the real kind of startup on the ground, what's going on, you know, small recruitment company and going back through these processes and systems. I've loved it to find out what is the best way of doing this. And I've not got the answers yet, but there are certain—

I think that's the key point that you said, it's about making things repeatable. Because I think that, I think if you think early on, And you, I'm sure you've seen this when you're early on in a business, when you're early on in your recruitment business, it's so easy to let those things, um, what's the word, like just let those things go and not think about them because you think now like I'll just, you know what I mean, it's so easy to not document your processes, not do those things, you're like no, I'll just, I'll do that later or do you know what I mean. And I think that, that's the part that's one of the most important things.

Yeah, that I keep getting from people Well, that's really interesting, and that's the thing you've got from my point of view, especially if I'm putting money down, it's a tricky balance that because I want my money back, you know, to get a return on investment, I need to get the investment back first, and you've got to be conscious of if you just, you know, what you wouldn't want to do is have somebody in a classroom for a month solid and interrupt the sales flow. They should know how, a recruiter should know how to, with a bit of support, you know, should know how to go and get some deals in. But on the same level, yeah, if people want to scale a recruitment business, so what do you say, is it 10% or something?

Like, I know like 80% of the different, different sources, but you're looking at a good 80% of recruitment businesses are sub-10 staff in the UK. Yeah, cool.

Well, the ones that are above that are the people who who will take systems seriously. And won't look at, that's the thing, isn't it? Everybody, so when I, one of the things that I help the people I invest in with when it comes to their plans isn't just the business plan, is we try and have a look at what their life plan is. And inevitably people want to earn a shitload of money and have a load of time freedom. Both of them need systems. Yeah, so, And the people who scale take that seriously. They realize that and they invest time into it. I can't remember who said this, what was one of the— it might be Deming or someone like that, one of the old, um, founding fathers of data. What did he say? If you don't, if you don't find time to create systems, then you'll never have any enough time. Something like that. I'm paraphrasing.

That makes sense. Okay, so as we come to the end then, Just a couple sort of real, just final granular things on investment, because just keen to get your sort of honest take on this. I think from the lens that I come from, the conversations that I have with recruiters, different people, it seems like there's definitely not the best reputation on people or vehicles or businesses that invest in recruiters, because typically you're hearing the same sentence that they they're there to take all your money or they're there to sort of take most of your company, blah, blah, blah. Right. So just a few granular things, cause I'd love to just get your sort of honest account on it really. Firstly, like how involved do you get in, how involved do you get in with the people that you've, I know it's different, but the ones that you've got involved with the most, like how, what does that actually involve? Like how involved do you actually get with your investees?

Ring me anytime, ask me whatever you want. I'm in there with you. Whatever you need.

Okay. And then how does this typically work then? I know it will vary, but like, are we talking like, what are you aiming to take a decent percentage or what's the typical way of structuring you getting involved with an investee?

Right. Okay. Well, that's my thing. So I only want a minority share of someone's business. So I think that's quite unique. I want it—

and just to be clear on that, what does that actually mean?

Well, everyone is slightly different, but what rough percentage?

Maybe like, so minority shareholder means that one, you're not— yeah, so you're not the majority shareholder, obviously. So, but minority shareholder means that, yeah, you're okay. I just wanted to be clear that everyone knows exactly what that means. But yeah, so that could be what you could earn, 10%. It could could mean you could own 20%, whatever it may be.

Yeah, but they're all, you know, the more, the more money they want will affect the shareholding. But as a rough rule of thumb, if I end up with 25%, I'm happy, right? Uh, and, uh, my idea is that, um, I will work with them intensively to get the foundations in. They can have all the systems, all the tools, all the help And then I end up with a relatively passive state in their business, which I think is better than having your ass owned by ruthless people who, you know, the kind of— yeah, that you're talking about.

Yeah, okay, interesting. And then just a quick one, I know it's like completely subjective, But like, what's your idea of like a recruitment company that's sort of successful turnover profit-wise, would you say? I know it's completely subjective, but like, I don't know, what would you be really— I know everyone's different, but like typically what would you say is a decent— where would the recruitment business need to get for it to be in a decent profitability mark?

I think Yeah, well, a lot of people talk about if they want to get— they want a million-pound recruitment business, uh, net fee income. You know, I think that's, that's a really, really good, um, milestone to hit.

And someone mentioned the other day, net fee income, yeah, is your actual profits after you've paid everything— I've also— you paid everything else.

Yes, and net fee income, you'll typically hear that, or NFI, is Interesting, the point that you've raised actually is you've got— it's just like if it's perm and there's— it's a £10 grand deal, that's £10 grand NFI. But where that becomes useful is you can look at what's the net fee and compare fee as a way of seeing how successful the recruitment business is. So obviously if you've got a million quids worth of sales and you've got 10 recruiters, then that will be £100K net fee income per fee earner. Then that will be a better business than the same business that does £1 million worth of net fee income and has got 20 people, which would be— it's almost a way of like batting average. You can use it to get the batting average.

Yeah, okay, cool. Because I thought— yeah, I just thought when I've spoken about it before and spoke to people, it's— yes, Yeah, if you— I thought it was more about if Mark— so if Mark's a recruitment business owner and you build a million quid, that's your revenue, and then your net fee income is the money that you— like the profitability, or is that just profit?

Profit, net profit.

Yeah, fair, net profit. Yeah, fair. Because I think someone— because I just had someone message me about it recently, it was like, Hishem, I heard this guy say net fee income, like I'm confused if I actually understand what that is or whatever, but I think people use it in different contexts.

We do use it in different contexts, and that's the other thing I'd say to anybody that, like, is interested in starting their own business up, you know, there's nothing conceptually difficult, and don't be afraid to ask what you might think is a stupid question, right? I ask them all the time, stupid questions, and I'd rather just, you know, it's understanding and interpreting accounts and stuff like that is something that I remember when I started can feel a little bit daunting. There's words— well, there's nothing hard about them once you just ask the right person, a patient person who's been there, to spend a bit of time with you and make sure you understand everything in layman's speak.

So look, before I ask you the last question then, yeah, final, final words for people that are fearful of starting on their own. What would you say to those people?

Go for it. I'd say, what is possible? Those three words. What is possible? How are you going to find out? I love that. And are you going to real— you know, are you going to realize you what you're here to do? You've got one life. Are you going to give it a go or are you going to have any regrets? That's what I'd say.

So final question then is, uh, I know you probably touched on it, but, uh, if, if Mark could communicate to every single recruiter out there they'd listen to your advice, they'd take it on and implement it tomorrow, you could sort of say a word, phrase, statement, sentence, what would you say to the people?

The people to implement?

Just recruiters, like if you used to, if everyone could listen to Mark and they'd take on your advice, what would you say to them?

Educate yourself. All the knowledge is out there. Very often it's like a tenner in a book. Someone's complete knowledge is in a book worth a tenner, and it's amazing, you know. So, you know, keep learning, and if you're hungry enough, you'll get there.

Mark, it's been a pleasure.

All right, mate. Yeah, cool. Enjoyed the chat, Hishem Azzouz.