James Blackwell recommends the book Small Giants by Bo Burlingham and argues for deliberately keeping companies small-but-great rather than pursuing scale for its own sake. He contrasts Bo’s small-giant idea with Jim Collins’ Good to Great (flywheel/top-line focus) and applies the concept to recruitment agencies: focus on profitability, niche specialization, lean overheads, and micro flywheels (tools/technology) instead of chasing headcount. He also discusses exit realities for recruitment firms (few trade sales; common exits are MBOs or private equity) and financial hygiene advice (build a "war chest" with milestones like £100k→£250k→£500k→£1M).
Hello everybody. James Blackwell here in today's video. I wanted to share a book that I would highly recommend and it is called Small Giants by Bo Burlingham. In this book, Bo talks around why it is sometimes good to have a small company that just choose to be great instead of big. And I thought it was really relevant to share this book with you. If you're looking to grow your recruitment agency or recruitment firm and you don't have a desire to take it to 50, 100, 200, 1,000 employees, then this type of book will actually start to make sense because Bo talks around thriving companies that are great and he bases his hypothesis on Jim Collins book Good to Great. So it's another book that I would highly recommend and Jim Collins talks around the flywheel effect there and how you actually get from good to great and you focus on one thing, one market, and be the first and second key business within that sector. But what BO talks around is around like how it is actually good to be a small giant and you don't always have to take investment, have big desires to grow to a PLC organization and thinking about the top line, which he talks about, big companies always think of the top line which is revenue growth. So year on year growth, can we increase headcount, can we increase revenue? When really in reality, when you focus on the bottom line, that is your billings and revenue minus operational expenses and the cost of goods sold, etc. Or your cost of your services, your net profit is the key that you should be focusing on. Because when you get profitable over time and that has a consistent effect year on year and you reinvest your profits, yes, you can get big, but unless you're actually going to sell one day. So if you're focusing on your business to sell, great, like hats off to you, brilliant, like enjoy the ride and go for it. But there's so in terms of recruitment, like there's a small, small amount that actually sell. So there's probably a few management buyouts. So another term for that is MBOs, where, where actual the managers within your business will actually take over the business. So that's normally one way to exit. Another traditional exit is to get private equity, take that investment, then you still have to work on that business for another three, four years in the hope that it's going to sell again and do an earn out or just be a small giant, be highly profitable if you focus on your micro niche, as I always say with niche within a niche and really carve out that market, really be lean in terms of Your overheads and costs. So not always just hiring headcount for the sake of it. Can you use micro flywheels in your business like I teach in my program, leveraging tools, technology, etc. That's really hyper focused in order for you to be highly profitable as well. And keep that war chest keeping, keep, keep that war chest tight. I always say first get to 100k, then get to 250k, then can you get your war chest to 500k and then can you get it to 7 fig? Can you have a million pounds or million dollars in the bank at any one time within your business? Because that gives you big balls in the market and it makes you feel a lot more comfortable when adversity comes or recessions take a dip, et cetera. But when you're building this, what Bill calls a small giant and he talks around this in his book, he gives, I think he's got about 10, 12 different studies of different companies from around the world that didn't take investment, didn't decide to go on the stock market or get listed, and were happy just being the best within their niche, niche sector without taking investment. So check that book out, it's by Bob Burlingham. And a theory that I want to leave you with is it is still good to be small, but you can still be great and you can still be highly profitable. And to be highly profitable, you don't need a lot of clients as well. So if you do the good things right within your agency and you can have 10, 15, 20 paid clients that are either retained or exclusive that over time when they grow, you grow as well, you could easily get that to a high six, seven figure agency, bolt it on with your micro flywheels that are working for you as well to leverage more time, more freedom, more autonomy, you can enjoy the good life. Like you don't have to stress and bust your balls to grow a business one day in the hope that you're going to sell. Because there's a lot of companies now that have ploughed all of their profits in year on year. They haven't been left in the bank with a big war chest. And those companies are struggling now because they've had to let go of a lot of the staff or put a lot on furlough. And the chances of them selling that business in a year's time, two years, time is a lot slimmer now because the market's changed. So have a think around how can you create your business to be a small giant like what BO teaches in the book. Check the book out, Highly recommend it, and I'll catch you on the next episode.
