Mini Masterclass in how to scale a £100 Million Recruitment Business (Alex Elliot)

Hey guys, welcome back to yet another episode of Top Billers Toolkit, where me and my twin brother Ben interview top billers from all around the globe to unlock the secrets to their success. Today's guest is a bit of a celebrity in the world of recruitment. It's Alex Elliott. Alex founded and scaled his previous recruitment company, Liquid Personnel, to 140 employees with a turnover of £101 million. His knowledge and insight into what it takes to scale and exit a successful recruitment company is second to On today's episode, we're going to be speaking about the 4 components that you need to master in order to scale a successful recruitment company. We're going to be talking about what Alex personally found the most difficult part of scaling his recruitment business, and we're going to be talking about some fundamental skills he's had to master over time in order to be successful. Guys, today's episode is going to be a mini masterclass from an expert on how to build and scale a recruitment business. We hope you enjoy it as much as we did. And as usual, grab a cuppa or a glass of wine, depending on when you're listening to this, and let's get into it, shall we? Hey Alex, how are you, my friend?

I'm very good, thank you. I'm at my mum's house looking out on a gloomy day. Um, but apart from that, it's midsummer, so everything's fine.

Lovely. You are one of the only guests I've had to follow up with about 6 times because you're extremely busy, but I'm so glad I stayed persistent because we finally got you here. So cheering in the background. Yeah. Thank you for coming on, mate.

You're relentless, and I have to respect that. The truth is, guys, it was nothing against you. I did so many podcasts for a point. I got bored of myself, and I said this before, if I'm getting annoyed and bored with my own face, what must other people be thinking? So I kind of just had a bit of a detox from these sorts of things. But it's great that you did follow up, and I really appreciate the opportunity to have a chat today.

Thanks, Alex. And I completely get that. Um, we'll jump into the first question, which is the same question we ask every guest. Um, what is the number one tool in your toolkit, whether it be mindset, strategy, or software? What would you say, Alex?

Always mindset, without a shadow of a doubt. Everything starts with mindset. So look, strategy matters, of course it does. The tools you use and how you execute are important. But if the mindset piece isn't, isn't right in the first place, um, I don't think you're going to do well.

I find— and mindset is probably the biggest answer we get, and it kind of makes sense. Without mindset, everything crumbles. I found there's, there's kind of two different types of people. There's people who are, who are kind of— they have an ingrained strong mindset where they don't have to do much and they just push forwards. And there's other people that need to put strict habits and, and discipline in place to improve their mindset. Which one are you, Alex? Are you one or the other, or you mix in between? How did you develop your mindset?

Yeah, I think everyone's probably a bit of both. I think if you looked at that question, it's kind of like, what are you born with, and then what can you develop from a growth mindset perspective and from a discipline perspective? Um, I think I was really lucky in that I was born with certain attributes which made me suited to a particular career, which was sales and recruitment. So I think I was given lots of good stuff there, which I just got lucky with. But undoubtedly, I also, as time went on, I had to— like, like everyone does, you have to continue working on your mindset and developing yourself. And that comes around, you know, discipline. Discipline leads to— tends to lead to improved results. Improved results lead to the belief that you can get better at something and confidence that you are getting better. And then it kind of turns into this virtuous feedback loop where the better you get at something, the more you enjoy it, the more disciplined you get to do it again and again and again. And naturally then you get better at it. So it turns into this really nice feedback feedback loop.

Love that. Um, I'm listening to David Goggins at the moment, not to, uh, divert the podcast, but I absolutely love David Goggins. And one of his challenges or his rules are— is the 10% rule. So trying to add 10% or improve 10% on everything that you're doing. And I found that a really good kind of tangible strategy. Is there anything like that you have in your mindset toolbox that you use? Is there anything that you kind of default to, or perhaps teach your recruits to to form a better mindset?

Yeah, I think marginal gains is massive, right? And I think especially in a job like recruitment, there is quite a lot of monotony. So you are doing a lot of the same tasks over and over and over and often in the same order, etc., etc. So I think because of that, it's quite easy just to go into an autonomous, not thinking mode and just doing things without thinking about them. I think the key is to challenge yourself and try and gamify everything. And the way that you gamify it is understanding what your base rate is and then saying, how can I improve that base rate? So you have to use data, you have to understand your KPIs, your metrics, your conversion ratios, all those sort of really good, you know, the science of sales stuff. And then once you can understand what your base rate is, you can really sort of drive forward and say, you know, let's try and get my, I don't know, whatever it might be, my cold call to discovery meeting ratio, let's get it up from 1 in 4 to 1 in 3 as an example. And then it gives you a real focus with regards to where you can look at your sales funnels and say, where are my biggest blockages? Where are the biggest leverage points where I focus on that one particular aspect of what I'm doing? And then you can really drive that forward from sort of a coaching perspective. But I used to just try and gamify everything I did because I felt it was a good way to make my life a little bit more enjoyable, especially when I was having a tough day. Um, you know, it really focuses you on mastery rather than just going through the motions.

I love that, love that. And, uh, that's really interesting. So I'm guessing if you've always gamified stuff, you've always been quite good with data, tracking the data, looking at numbers. Am I right in saying that, Alex?

I've got better. I, you know, it's something— I'm quite analytical. I like to think I'm reasonably analytical. So yeah, I like to break things down. I'm I was told when I was very young I was mildly dyslexic, so I think I maybe have a natural way of looking at things which sometimes is slightly different in that I'm just really keen to break things down into their systematic parts and try and understand process because I'm not actually very naturally orientated towards process due to that. I think that maybe there is a little bit of mild dyslexia there, but paradoxically, that made me really interested and focused in on process because I wasn't naturally good at it. So it kind of went from being probably a weakness to something that actually I've got very good at over the years because of the constant focus in on that particular area where I know I'm not very, you know, I certainly wasn't probably when I was younger, very good.

Very interesting. Just on that kind of younger previous topic that you were speaking about, there's a lot of podcasts that you're on that I've seen, Alex, and I might have missed some of the, some of them, but we speak about strategy heavily, and we're definitely going to get into that. But I kind of want to know more about Alex the person and like what drives you. You've had a lot of success, and we're going to go into the numbers in a second, but I'm always fascinated what drives a human. And typically, if we look back to certain events that happened maybe when you were younger or, you know, back in the past, you can kind of see where the trigger points are. Are there any points for you, um, if we go back to maybe younger Alex, of those key moments that help drive you and, and, and, and helped direct you today? What would you say?

I think there's definitely— if you look, look, there's two things probably, isn't there? There's your internal DNA, that's what you— there's what you're born with, and then there's your environment in which you grow up in. Um, that, like, I think a lot of people talk about, you know, that they have these amazing backstories about things that happen to them and their environment, and I'm sure there's truth in that stuff. Um, but, but I think people miss sight of a lot of it's just luck. And, and referencing what I was talking about earlier, you know, I inherited certain characteristics from different members of my family, which I think just made me really, really suited to some things and really, really unsuited to other things. So, you know, I like psychometric profiling and all that stuff. I like to really dig into psychology and why. And I've looked into that sort of stuff before. And if you look at your personality type, you know, a DISC profiling, I'm a high D, so I'm reasonably unusual. Only 8 or 9% of the population are high Ds. Super task-oriented, super goal-oriented, very competitive, very intrinsically motivated to do things. So I was just quite lucky in the sense that I think I was born with a certain type of character which made me the way I was. And then that competitiveness came out in my environment because I had a really comfortable lifestyle, but I wasn't born into money. So I was competitive. I wanted to achieve things. I was very naturally ambitious and goal orientated. And I also wasn't handed things on a plate. So although I was very comfortable and I had a really nice comfortable lifestyle, my parents really looked after me. It's not like I was flying on first class planes and doing the sorts of things that maybe you see other people out there doing. So it gave me that motivator to be able to really drive towards having the same comparable things and lifestyle maybe that I saw other people having. That, you know, although mine was amazing and really, really comfortable and I never wanted for anything, I think my environment did play a part to a degree. But I was also born entrepreneurial, you know. I, it was just, it just, it just was who I was.

Great answer. Thank you, mate. Um, you are— a lot of people know who you are and know your success, um, Alex. I probably don't need to say the figures, but I'll just say them anyway because it's, it's fun to say them. Um, you scaled your recruiting business to $101 million in revenue— correct me if I've got any of these numbers wrong— and you built it to 140 heads. Again, a lot of people know this data, but what I would love to know is what was the most difficult part of the whole journey for you when you think about that period? Was there one thing that was really annoying and difficult and something you had to overcome?

Yeah, I think, um, I think there's an awful lot, by the way. Like, it was constant problems and constant challenges. So I think you could answer that question in a multitude of different ways. But the one thing that I consistently see as a theme, which certainly I experienced myself, was developing a leadership team. It was, if you want to scale a recruitment company, you can only do so much by yourself, and you will, you will hit a certain point where you are maxed out from a resource and from a time. Anymore. And if you look at how a recruitment company scales, they scale by having managers and associate directors and team leaders and directors and all these different sort of layers within the organogram. You can either hire inexperienced managers, which is a suitable thing to do but can be very, very difficult to do because just like with all experienced hires, if someone's really, really good, You know, you can get lucky sometimes, but why would they want to leave Recruitment Company A where they're already really, really successful and hopefully the business is doing well and they want a growth trajectory to success? It has to be quite unusual from my experience sometimes to be able to find that absolute superstar who you can get, because the reality is they're probably doing really, really well in their own organization already. So I think it's really important to be able to develop your own leaders. And develop— identifying the right people and then developing them into— from high potential into really competent, self-sufficient, high skill, high will leaders is so hard. It's really, really difficult because there's just not— again, the truth is there's not that many people out there who have the right attributes for what you need to be able to build a high performance culture and effectively hand the reins over culturally and also from a technical perspective for those individuals to be the one that scale your business because that is them that scale it. If you hire 6 consultants and you've only got 1 manager, you probably can't hire too many more consultants at that point. So unless you have the ability to be able to identify and attract high potential leaders as well as good billers and then actually put them through a program where a high enough ratio of your new hires go into leadership roles and go on to be really successful, because there's so many reasons why you get it wrong. The person might not be suited for whatever reason, they might not enjoy it. Though, if those ratios of manager to consultant start to fall apart, your overall productivity and effectiveness of your sales organization, the engine going on in the background, is going to start to crumble. And on top of that, you lose the ability to continue scaling. So a long-winded answer to say I'd suggest developing leaders for me was an area that, you know, it is very difficult and we scaled really fast. So it's not like we did a bad job at it.

That's really interesting. So getting on to the positive, there must have been maybe a few key things that you did put in place, Alex, that made the biggest difference to that ratio, that conversion rate.

Do you—

can you let us know, were there any particular things that worked really well?

Well, the first thing is to have exceptionally high hiring standards, first and foremost. If in doubt, There is no doubt, you know, you've always got to be looking to up the average of your sales floor. So I always suggest from a hiring perspective, if you don't believe someone has the potential to be a top quartile performer on your sales floor, don't hire them. Because if you're always going for just the average, guess what? When you hire people, how often do they turn out as well as you'd hoped? They do sometimes, but I think my mindset was always, if I only try and hire people that I believe could be top quartile performers, if it turns out that they're an average performer, that's absolutely fine, that's okay. But if I hire people who I think might be an average performer on my sales floor, the downside to that is they're going to be a below-average performer. And all sales floors are like a bell curve. If you think about it, your job as a sales leader is to move that bell curve from left to right, from a, um, from a revenue generation, from a profitability perspective, or from a billing perspective, whatever it looks like. So I think hiring standards is incredibly important. Um, and sorry, I've forgotten what the— what, how did you frame the original question?

Yeah, no worries. I was just saying, because we were talking about what was difficult, and then you said my question was basically around increase, improving those ratios. What were the key things that you did?

And then I also, I also figured out that, um, I think I made the same mistakes. I say I, we, you know, myself and my business partner and everyone else involved in the business. It certainly wasn't me just doing this stuff, but I think we figured out the same thing that everyone who's trying to grow a recruitment business for the first time figures out: big billers are often the worst possible people to put in a management role. And we definitely made that mistake a few times repeatedly. So I think it's really, really important to be able to identify what a great leader is versus what a great biller is. And the most simplistic way that I describe that is I say that most big billers, a lot of big billers are selfishly productive, whereas most great leaders are selflessly productive. So look, they're both productive in their own ways, but actually the ways that they're— the way in which they're productive are kind of diametrically opposed. And great billers usually aren't intrinsically motivated to coach and develop and work through other people. Great leaders always are, you know. You— I, I don't know many great leaders who aren't natural coaches, because if you can't coach and develop your people, you are— and you're not genuine. If you— if strengths are two things— people think someone's strengths are just what they're good at. I would disagree with that slightly, and I'd say, look, there's two things that are important to think about from a strength perspective. One is what you're good at. Two is what energizes you. So if you miss the what energizes me bit, it's not going to be a strength forever because you'll get disengaged, you know, you'll lose energy doing what you're doing. So I think a lot of people go into leadership roles and yeah, they can coach, they can develop, they themselves are exceptional billers, but it doesn't energize them. They don't enjoy it in the long term. And then guess what happens? Their focus and energy moves away from the most important bit, which is coaching and developing your team and getting them to the same sorts of standards that you're at. Um, again, another long-winded answer, but that was really that, that kind of like shift in mindset for me, that shift in understanding the difference in the two roles— completely different jobs. Um, I think that then gave me a better understanding of the type of individuals we wanted to be promoting into leadership roles and those that we wanted to encourage going down a slightly different career path, which was more based around really about them being, um, individual contributors rather than, you know, team drivers.

Yeah, that's really fascinating. Um, correct if I'm wrong, I feel like it's easy, like, for a, for a top biller, it's quite easy to see if they're doing well or not. You just, you know, I guess you look at their revenue, you look at their numbers, you look at their metrics. They're either hitting those metrics or not. If you're hiring for a leadership position, how do you know if they're doing well? Like, what metrics or what standard are they up against, if that makes sense? How do you know if they're succeeding or failing on a leadership role?

Yeah, I think it's more the behavioral stuff that matters for the leadership. So again, just go back to that previous point. I think a lot of, like, if you look again, think about your performance levels in a business, it's often the performers who are, you know, average from a billing perspective who have got amazing leadership potential. You don't have to be the biggest biller in the office to be a great leader. Quite the opposite. Sometimes it's often your most, you know, average is a bad word, but I can't think of a better way to describe it. It's your middle-of-the-road billers who got the right behavioral traits and drivers, they're the ones you want to be promoting into the leadership roles. What you don't want to be doing is promoting your best biller just because they're the best biller. You think, oh, they can teach everyone else how to do it, but if they're not intrinsically motivated to coach and develop other people, well, that's not going to work. So you're again, like, being able to do it and understanding a process are two different things as well. So, you know, a big biller might be unnaturally charismatic, they might have incredible executive presence, they might— all of those things, their X factor, which make them really, really good. But great coaching and development is more— for me, it's more of a science than it is an art. So you want to find those people who, although maybe their performance standards weren't quite as amazing as your absolute top, you know, performers, they have the right behavioral traits which are going to support them to coach and develop based upon science and process and all that good stuff, which which helps other people ramp really quickly.

Interesting. Love that. Great answer, Alex. Absolutely love that. Um, we're gonna get into a bit more about the 4 most important areas that you said on another podcast, uh, in terms of scaling a business. You already mentioned one of them, leadership. But before we get into those, I just want to ask this question: what did you enjoy the most about scaling a business? Like, because there was so many— there must be so many fires you have to put out, so many problems, businesses and naturally just solving one problem after another. But was there one part of scaling that business that you enjoyed the most personally?

Definitely the early stages. Like, all of it was good, but certainly the early stages, I think there's naturally more excitement there, isn't there? You're working incredibly hard, you're really irrationally optimistic, but you don't know whether it's going to be— you do know if it's going to be successful, I guess. Of course you do. But, you know, I think early stages, John and my business partner, you know, the first 12 months, we just worked out of a tiny little cramped office. It was a heatwave summer, so we were literally sat in our pants just on the phone for 12, 14 hours a day. That's not even a joke. It was very smelly, that office, let's put it that way. But that was great fun. And then the first, you know, growing the business from there, we moved the business to Manchester at that point and started growing the business out. And we just made loads and loads of mistakes early on like everyone does. But you just have such enthusiasm and motivation behind what you're doing. It's so exciting. We built an initial kind of our initial founding team that once we'd got things working, were amazing as well. We got on so well. It was a real high-performance culture, and there was just a real buzz and excitement about what we were trying to achieve together. So that was hugely exciting and rewarding. It was all good. But the truth is, the larger the business gets, the more you have to remove yourself from some of the stuff you enjoy, the more you have to delegate out, the more your life just becomes sitting in meetings. You know, and that's what you want at the end, right? Ideally, by the time John and I exited that business, we kind of had a board team, a leadership team, and, you know, a sales leadership team who came to us and said, this is what we want to do. Is that okay? Like, maybe not exactly like that, but it was really just, it was about signing off strategic decisions as much as it was being the ones that drove the business. And that's the entire point. That's what you want to get to. And that's what makes your business valuable, but at the same time, you definitely don't have the same involvement and the impact that you did in those early days where everything was your baby. And, you know, you know, so I think you have to have a mindset shift as you're growing the business, that your job is to try and develop other people and get out of their way while at the same time being highly supportive and highly demanding of them to ensure that they're doing things, you know, to the right standards and they're the right people to sort of hand the reins over to.

Did you ever— sorry, Ben, just one last— and me and Ben always butting in for questions, Alex, but did you ever struggle to release control? Was that— because I know that's one of the biggest things that— it's one thing I struggle with in my business as well, which I'm learning. But was that ever a problem for you, Alex, or was that quite a simple thing? Like, no, here you go, there you go, delegate?

No, no, I think it I think sometimes I was good at it and sometimes I was bad at it. So I guess the answer to that question is yes. Sometimes early on I gave responsibility to the wrong people. And also, look, I have to take responsibility. I also didn't give them the support and development they needed. So it was a double whammy, right? It's like, here's all this responsibility. Oh, by the way, I'm not really going to give you a huge amount of support around how to actually achieve these things to the standards that I believe we're aiming for. So I think I mucked up there. And I think that the sales floor was my— it was, it was mine. So we brought in a very experienced sales director in the end who was great because she actually, she was very different to me. So I think one of the things that made that a bit easier was that we kind of built the cultural DNA of the business. But Alison was great and she was very different to me. In the way that she approached things. So in a way, that kind of made it easier because I could see where her strengths were, and they were areas where I felt would really support the ongoing growth of the business. So we took that decision really, really seriously. But, um, I guess in a way it was reasonably hard, but at the same time, my overriding goal was always to, to just build the coolest, biggest, most successful recruiter in our space. That we wanted to be the number one in the world at what what we did. So that was my goal. And if that meant putting someone else into a role and meant me do it, going— I always had other things to go and do, right, within the business. So I just had to learn to be able to delegate and trust those people, but at the same time support them really, really closely, um, and, you know, keep their feet to the fire with regards to what we wanted to do as a business.

Love that, great answer. Ben, you were gonna ask a question? Yeah, I was gonna say, because I feel like a lot of the recruiters we speak to, like, what you've done is kind of the Holy Grail. They say, I want to scale and sell. Not all of them, but a lot of them. I guess there's a lot of lifestyle recruiters. I feel like, correct me if I'm wrong, some of them, I feel like perhaps there's a— well, let me go back to statistics. Another person that has sold their business, I'm not sure how accurate this is, but selling a business I think is less than 1%. It's like, I think the probability of scaling and selling a business successfully is quite low. I don't know the exact probability. But when you have recruiters coming to you saying, Alex, you know, should I scale my business? How do I do it? What's the first step? Is there any kind of words of wisdom you give them to kind of maybe bring them back down to reality?

Yeah, I think it's like with everything, you've got to understand your why. Like, why do you want to do that? Because again, as like a lot of us, especially driven people, they just feel like they've got to do something, you know. I've got, I've got to build and scale and exit. But I think you've got to build a business that suits and fits with, A, your motivations and drivers, but also your lifestyle needs. And anything you do has consequences, and anything you do, any decision you make for the right reasons has sacrifices attached to it. So John and I were, when we started our business, 25 years of age. John was maybe 24. We didn't have dependents. We didn't have anything. We had like serious girlfriends. We had a lifestyle that enabled us to do what we had to do to make growing and developing that business our number one priority. And we had a really, really clear, mutually aligned understanding of what our goals were, what we wanted to achieve in what timeframe. So it gave us like a laser-like focus on what we were doing and why. And And it was our why as well. We did want to grow and scale and sell that business and we were prepared to make all the sacrifices required to do so. I think some people are a little bit naive, like not a very nice word, but I don't think they think deeply enough about the types of sacrifices you have to make first and foremost to grow something really large because you do. And then on top of that, there's a huge amount of luck involved. So I think The one thing I'd also say is don't, don't like aim to grow. We got lucky and we sold our business in the time frame that we wanted to for the sort of money that we were aiming for. Um, but there's a huge amount of luck involved in selling a business, especially a recruitment business, which is so, um, the economy, what's going on in the back, um, background of the economy and the economic cycle and where you're at at that particular point is such a relevant point to whether you're going to be able to sell your business at the right time or not for the type of money that's going to make it worthwhile you walking away from something that's probably generating lots of money on an annual basis. So you can't manage the economic cycle. It's just luck. You get lucky or you don't. And on top of that, you've just got to be in the right place at the right time. Like we were, we, we were the number one supplier of social workers, contract social workers, to the UK. We had something like 24% market share. We were, um, we were, we were, we were the best in the world at what we did. And it just so happened at that time there was a private equity-backed healthcare group of recruitment companies that had tried to get into social work contract and had failed, um, and previously looked at buying into social work contract because it was a really profitable market. It was a great market to be in. And it just so happened at the time that they came along and sort of started sniffing around that we were reaching the peak of where we wanted to be and look to That's it. So look, I'm rambling, but there's just so much luck involved in selling a business. What I would suggest is just try and build the most, um, the, the best possible high-quality business which fits your particular lifestyle needs. And then if you sell it, you sell it and you walk away with a massive cash lump sum, which is lovely. But if you don't sell it, what you'll end up with is a business asset which you're really proud of which you could be involved with as little or as much as you want, because hopefully by that point you've built a really experienced senior leadership team who effectively run the business for you. So who knows, you could be in a position where you just take out £1 million a year. Yeah, if the business makes £3 million a year, take out £1 million, leave £2 million in, and live an amazing lifestyle, but with that business asset still in the background. And also it gives you the intellectual stimulation and you can continue growing it and you can do all other cool stuff. You don't have to sell a business to get really, really wealthy. And I think it is a good thing to do in the sense that you can create like immediate wealth on scale and have it all in your bank account and start doing other things with it. But, you know, there's different ways to get rich. And if that's your ultimate driving goal, it doesn't purely have to be via an exit.

Great answer, man. Absolutely love that. Love the luck bit as well because I don't feel like— I feel like that's not spoken about enough, Alex, in terms of the luck involved. I feel like— and a lot of people have said that, that there is, you know, highly successful people, it's obviously hard work, it's obviously intelligence, doing the right thing, but then luck plays a part in it as well. So thank you for sharing that, mate.

It's the butterfly effect as well. And I'll give another shout out to John. John and I were so lucky to meet each other, um, because we, we had shared vision, shared values, and a really good complementary skill set. So we came together and 1 1 made 3. And we were both in our own rights, we were both really, really good at what we did. But you know what? That combination of the two of us together was super, super valuable. Again, that's luck. Without John, I wouldn't have been able to achieve what I did and vice versa. I'm sure John would admit the same. He better do anyway, otherwise he'll be in trouble. But I'm sure John would admit the same. We came together at the right time and it was just this beautiful symmetry of two people who worked really well together. Who were really tight, who complemented each other in so many ways. And again, that's what's so hard to find, right? The right business partner, the right person who complements you in that way. And that was pure luck. So anyone who's honest, who has had success, they know how much— if they're genuinely self-aware, they know how much luck was involved in them getting to where they got to.

Really fascinating. You mentioned, and you might have already covered a bit of it, Alex, but you mentioned that, um, there were a few key mistakes that you made early on in the business. If you were to go back now and look at younger Alex, um, a younger Alex Elliott, and say, hey Alex, don't do these things, mate, I promise you if you don't do them, you will, you will grow 50 times quicker, or, you know, you'll make your, you make your journey scaling a lot easier, what were those key mistakes do you think that you would go back I think hiring is always the best decision, pretty much always the best decision you'll make, and also the worst decision you'll make.

So I think although we were good at the beginning, I think we got really good as time went on with regards to our hiring standards and the type of people we're bringing into the business. I think we mucked around trying to diversify when we didn't need to. By the time we exited, we had an allied health professional division which was strong. We had a nursing division which was strong, perm nursing division, which was strong. And we also had what was really strong was a consultancy division. So we effectively went into councils and managed large-scale projects on behalf of councils. And that was like really, really attractive, as it turned out, to our, to our buyer. So I think we did some things right from a, from a diversification perspective, but we started trying to diversify into the wrong areas too early in the journey. And I, I think I see that a lot. It's like magpie syndrome, isn't it? And you also get a little bit full of your own self-importance and success. Oh, if I can do it here, I can do it everywhere. And I genuinely believe sometimes to scale more aggressively, simplify your business model. What are you doing really, really, really well at? And double and triple down on that before you start looking at other areas of business that you should be going after. So I think that's something that, you know, as time went on, we got better at. But we definitely had that magpie syndrome a little bit as well, and it just distracted us from our thing, which was like— it wasn't exploding, but it was growing fast. And instead of doubling and tripling down, I think we probably got a little bit distracted at times.

Great answer, mate. Absolutely love that. I've got to pause to wait for Ben. Yes, well, I would love to go into— I think you were going on to it, Sam. You said on another pod the 4 most important areas to focus on scaling a recruiting business are winning new business, leadership, good systems and processes, and cash flow. I feel like we've got to start with winning new business because it's just probably the most popular topic, uh, Alex, that we have for other recruiters that we speak to. So what was the most successful method for you guys? What was the go-to method that you would teach all consultants, all recruiters, to kind of start learning straight away, do you think?

I'm so like old-fashioned now and so boring with my answers on this because look, it's like Liquid, it was phone. You know, everything we did pretty much phone and email. So it was really, it was like old school, you know, this, we exited that business in 2016. We grew it from 2006 to 2016. So that was before you had, you know, outreach software coming out and you had even before LinkedIn, you know. So again, it was a very different approach where it wasn't as multi-touch, multi-cadence. I think you've got to think about prioritization from a BD perspective. And I think it's very easy to fall into what's the law of triviality, where it's very, very easy to spend too much time on things that are trivial in comparison to your higher priority activities. And I think that's a natural thing to do in recruitment and sales as a whole because it's a hard job. And like, cold calling is hard and it's full of rejection. And as human beings, we are wired to trying to avoid rejection. Because when we were like in a cave or whatever it was, if we were rejected, we could effectively be, you know, ostracized from the tribe and we'd die. So, or you'd go up to a mate and they'd reject you, and then all the other mates would say, no, not interested in you either. And then you don't get to procreate and reproduce and all that sort of stuff. So I think there's loads of like psychological reasons why we're hardwired to avoid rejection. And I think that makes it so easy for people to avoid getting on the phone because rejection by someone on the phone is an awful lot more painful than someone not replying to an email or someone not responding to your social media message or someone not reading your marketing copy that you've blasted out. So I think it's about prioritization, and I think it's about, especially with AI and automation and outreach, I think cold— your cold calling game or your phone game is going to become even more important as all of that other stuff kind of becomes automated. And also best practice in those areas is going to become so systematic and it's going to be the same for everyone. So the way that you're going to differentiate yourself best again is going back to the phone.

Interesting. And would you still, because I know you're still around top performers today, would you still default to phone being kind of the number one method Yes. Interesting.

Especially in this market, right? No one likes CVs. Again, all right, let me rephrase that slightly. The structural conditions of the market you're operating determine the best strategy with regards to how to go after and get the best return on effort with regards to your outreach, because outreach is all about return on effort. How much do I have to do to get the best possible return on the time that I'm spending? And then what's the maximum time I can spend doing that to get the most optimal amount in return? Um, previously, CV spec-ins, booming market, here's a CV, I'll hire them. Wait, just do CV spec-ins. Now no one's looking at CV, or, you know, until recently no one's been looking at CVs, no one's hiring, you know, there's freezes everywhere. Well, what good is it then doing CV spec-ins? So I I do see people, there's like, if all you've got is a hammer, everything looks like a nail and every general is fighting the last war. That's another one that I think is really relevant to that. Well, this is what worked for me 10 years ago. It's like, well, it worked for you 10 years ago, but what were the market conditions like at that point, etc., etc.? What was available from a tool perspective? And you've got to be more tailored to what's going on at your particular time. And then you've got to come up with a strategy which is based upon the underlying forces of the structural conditions of the market. You in.

Yeah, that's a really good answer. You were on the sales floor, uh, I'm talking about back in your, um, other company, um, Alex. You, you were on the sales floor, obviously observing lots of different recruiters. Um, what were the top billers doing? Did you notice any particular traits, consistencies, habits, patterns that these top billers were doing that were— that separated them from the rest? Was there anything that you noticed that they did? And maybe still do today?

Well, I think your best performers are high will and high skill, if you break that down. So I think from a high will perspective, you can see the behavioral traits or drivers that make that person particularly good at what they do. So that could be their relentlessness, that could be their work ethic, that could be their grit and their ability just to take shit and keep going. You know, it's that passion and perseverance towards long-term goals is a great definition of grit, I think. It's that conscientiousness, you know, that mindset thing of I'm actually going to do what I said I was going to do. I am going to follow up. And, you know, if I get a job in at 5:00 at night, that doesn't mean I leave at 1 minute past 5 and then come and start working it tomorrow. I'm going to get the ball rolling with that. So again, I think it's about having that professionalism. And then from a skill perspective, I think there's, there's the intangibles such as executive presence. I think that's quite hard to train, but I think there's also charisma. Again, you know, that's not the most important thing in the world. Some of the best builders I've worked with weren't particularly charismatic, but it can be really helpful against something extremely difficult to train and something I wouldn't even bother trying to do personally. I think you've just got to play to people's strengths. But I think one thing from a skill perspective is the best billers are always extremely process and data orientated. Not all of them, but most of the ones that I've worked with, because I'm typically very process and data orientated, and that's therefore part of the culture that we created, was about understanding process. It was about working to an optimal process. It was about continuous review of that process to try and improve it. It was about marginal gains. So it's, again, it's about— and that stuff, if you get into that, it kind of leads to like a mastery mindset because you, you just want to get better and better and better, and you get really fixated and really obsessed by it. And I think that's really, really valuable. Um, and then the data— understanding your data. If you don't know your numbers, I, I like— there might be the occasional recruiter out there who's just that creative artist who can just get what— get through on sheer charisma and skill alone. But the vast, vast majority of recruiters that I've worked with who are top, top performers understand the data, um, because the score takes care of itself. And if you understand your activities, your objectives, your results, you can reverse engineer that stuff, and then you can be disciplined to really follow through and ensure you're doing what you need to do on a consistent basis to achieve the results you've set for yourself. And it's all maths and I am no mathematician, but it's all maths. And as long as the quality is there to go with that, then you've got your conversion ratios alongside the volume data KPIs, you're golden. So again, I think if you can figure that stuff out, that tends to lead to much higher levels of success than someone who's just like doing stuff without really understanding the underlying maths behind it.

Love that.

That's cool.

You have a question? Yes, just going back to the four kind of, uh, most important areas. I feel like we should be kind of talking about good systems and processes. It sounds like, Alex, you were hiring people that were naturally aligned to your way of thinking, maybe already quite analytical, process-orientated, and perhaps drawn to numbers. For people that aren't, which I feel like there's probably quite a lot out there, a lot of people that aren't naturally kind of very analytical or process-driven and have to work really hard to build good systems and processes. Do you have any tips on how they get better at building good systems and processes if they aren't naturally aligned to kind of your way of thinking?

Yeah, I don't know if we did necessarily hire people who were aligned with that. Salespeople aren't. I'm not— I, I'm— I did— I was— maths was not my strong point. If it wasn't for RFD, we would have probably gone out of business if I was responsible the finances. So look, I'm not a math guy, I'm a sales guy. I'm not a math guy. Join an organization where they have strong understanding of the science of sales. Science— sales is a science. I get it. There's a lot of art involved. There's— I think there's more science than there is art nowadays. I really do. But I think join the right organization where you're joining the type of environment where there is a high performance standard. And you can't have high performance standards if you don't have an understanding of what leads to high performance. And how do you get to the point where you understand what leads to high performance? Well, that's about being able to whiteboard what works. It's about being able to break down your sales processes into, you know, A B C D E. What do I do at this point? What are the different scenarios that could happen out here? What talk tracks do we need to learn? What templates or tools are we going to refer back to to do this stuff? Join the right organization. And if the person is coachable and they're smart, they don't have to be rocket scientists, they just have to be smart enough. They will see the beauty of like process. That's possibly the lamest thing I've ever said.

No, I love it.

They will see the beauty of process and how like I just figured out what I had to do on a daily, weekly basis to achieve what I wanted to achieve. On a quarterly basis or on an annual basis. And then I did it. And there's something really liberating about that from a motivational perspective. What do they call that? They call it— I can't remember the exact term that is used, but understanding if I do A, B, C, D and it leads eventually to X, Y, and Z is one of the strongest motivational tools there is there. Clarity of task. There we go. If I have clarity of task, I know exactly what I have to do to achieve what I want to achieve. What is more empowering than that?

Yeah, yeah.

Or join our organization. We're a KPI-free organization. Good luck figuring out what you're doing well, what you're not doing well, when things are going right, when things are going wrong. Good luck trying to figure all of that stuff out. Just get on the phone, you'll figure it out, everything will be fine, and we're not monitoring your KPIs. Well, like, that doesn't make sense, and it's bad motivationally as well, especially if you're a trainee recruiter coming in. You need someone who's gonna, like, teach you the art and the science of sales. So again, rambling answer: join the right organization, and I think you'll buy into that stuff naturally if you're smart and you can figure out clarity of task, and that's going to get me where I want to be. And also, you've got those people around you who want to coach and develop you, and you're bought into being coached.

Yeah, that's a really good answer. There's probably a tougher question, kind of what if you're in the scenario where you are that person and so you don't have the option of joining another organization that already have that mindset and/or, um, you know, ability to build good systems and processes? Where do they start from there, you know, if they're not used to that way of thinking?

It's a tough question. I think, like, how did I learn stuff? I read. I took responsibility for my own learning. And the organization I joined first time wasn't like that. So then maybe that's a good example. That wasn't like that. And I figured it out. So what I did was I asked the best performers in the business, pardon me, how do you do what you do? Like, how do you do this? How do you do that? Why did you do that? I'm listening to you all the time. I plagiarized what they did on the phone. I listened and watched how they built a project and how they did their outreach. And God gave you eyes to plagiarize. So I would go in and I would become a pain in the backside with the top performers in the business, and I would figure out how they do what they do. And then once I've got that starting template, which might be an amalgamation of different things in the business who are good at different aspects, I've got a starting point with regards to my sales playbook. And my sales playbook, initially a lot of it's in your head, but as time goes on, if you want to scale a business, really you want to get to a point where I always joke, and this isn't realistic in real life, but what I'd love to be able to do is hire a smart, driven, coachable individual off the street who wants to get into recruitment, and I'd like to be able to give them the sales playbook and say, go away and do that. And I'd like to watch them just do it and be really, really successful. And that's my, like, dream. And obviously that's silly, right? You can't do that. But that's kind of like my dream scenario of what the playbook should be like. It's your blueprint for success. You just have to do this, and it's mapped out in such beautiful, intricate detail that it answers all of your questions. And as a manager, when a consultant comes to you and says, what do I do at this point? What does the playbook say? Yeah, what's the playbook say? What does— and it's not in the playbook, it should be. So again, look, there's an idealized view of that versus what is reasonable and actually what you should do. But, um, that's kind of like the idealized view for me of how to go about building strong sales processes.

Yeah, that's a great answer. Love that, Alex. Um, come to the end of the pod. God, it's, it's, it's gone so quickly. Um, One thing I would love to cover before we, before we end is cash flow. Now, I've heard of quite a few large recruitment businesses and businesses in general, but I guess we'll stick on recruitment businesses that have, you know, 10 offices, hundreds of people, but are actually not making that much profit and cash flow is really bad. Um, from your perspective, Alex, what were some of the mistakes you made with cash flow? And then maybe what were some of the you know, the positive gains you made from increasing cash flow further down the line? Do you mind?

Uh, yeah, back in the day, cash flow was really tough for us because we were 95% to early on 100% contract. So contract sucks up cash. Um, perm is great in the sense that you get big lumps of cash coming through, but it's more intermittent, whereas contract's negative in that you get tiny amounts of cash coming through. Most of it's being paid out as soon as you've got it in, but at least it's predictable with regards to, you know, how much cash you're going to be getting for a more foreseeable time in the future. Um, I think scenario planning is really important. Most— I got to the point at Liquid where I knew with my sales forecasts, knock off 40%. I, I reckon this is what we're going to do, right? Knock off 40%. And that for me was a more realistic budget to work on to then feed through into our cash flow projections.

Interesting.

Now don't get me wrong, we were good at hitting target, but I also knew I was very aggressive and I was self-aware enough to understand my own blind spots, which is I'm like hyperdirect, I'm like really aggressive, I'm like, go, go, go, we will do this, there's no excuse for failure. but things go wrong and there are unforeseeable events which could, which could create you problems. So I think, again, I'm rambling a bit. I think the important bit is there's an element of scenario planning with regards to your sales forecasts where you're not— I just think people are overly optimistic basically with regards to a lot of their sales forecasts. That then feeds into the cash flow. Cash flow looks amazing, everything's going to be fine. Before you know it, you've, you've fallen behind 2 quarters on the bounce. And you're in trouble with cash flow. So scenario planning is really important, not being overly optimistic, having proper cost management principles in place. Like, it's amazing the number of times you go through someone's costs and you say, what's this? And they don't know. And that's weird. It's like, well, what, we don't know what this cost is? Let's just make sure that we've got real clarity that we're spending money on the right things at the right time. Because I think sometimes it's very easy as a sales leader just to focus all of your energy on your sales forecast and your revenue. And lose sight of, well, actually there's another corresponding bit which is purely within my, completely in my control, which is how much money we spend. And then last thing around cash flow, make sure you build in attrition because I've seen, you know, we got good at that, but if you don't build in attrition to your sales floor, that's gonna create you problems with regards to how you then forecast and how you predict cash flow.

Great answer. Absolutely. Was there one thing that you changed that made the biggest difference to your cash flow?

We hired our FD.

Oh, really? Okay, interesting.

So John and I just mucked up the finances early on because we were trying to do it ourselves via an outsourced finance payroll company, finance company, and it was a disaster. So we quickly realised that we were not meant to work in accounts. A financial controller who then was exceptional, Helen, and she ended up becoming our FD. But she, she took over and just managed all of our finances. So understand your strengths, be aware of your limitations, and mitigate those limitations as quickly as possible. Get someone to manage your finances into your company. There's not many sales leaders who should be managing the finances.

And was there anything that you remember that the financial controller came to you in a meeting, said, hey, we need to change this, and this is going to improve your cash flow?

Um, not really. Look, we, we were always growing, margins were good, we, we had, we had a really predictable scalable sales model which fed the unit economics, which meant that everything was reasonably good. But I, I guess we, we grew, we, we, we were growing so fast that caused us problems. Because we were growing so fast. And the problem was at times more money was being sucked out of the business, even though on the paper the P&L was amazing. But as we all know, right, cash is king. So look, I'm doing Helen a disservice there because there was a million and one things she did. She just brought a level of discipline and professionalism to our financial management that just wasn't there. So I think the whole piece, it was the whole thing. More than anything specific.

Awesome, Alex. I'm so glad. Sorry, Sam, I've got one more question. Okay, cool. If you don't mind, Alex. No, yes, I'm curious. I'm just really curious. You probably get so many recruiters coming to you, and I'm sure you have to kind of bat them off on a weekly basis. What's like the most common questions you get asked from other recruiters?

I think, I think the leadership piece is, is probably— again, I've been asked that a couple of times recently, so I'm going to go with that. Again, I think there's a multitude of answers. How do I scale? Should I move away from the tools? Should I be hiring experienced managers in? Should I be developing my own? I think we all struggle with that because— and, and I get it because I genuinely think it's one of the biggest challenges to be able to scale a recruitment company beyond, you know, 10, 20 heads. So I think that leadership identification and development piece is up there because it's mainly— it's a lot of people who are around that 10 to 30 heads that will come and ask me for questions of how do I get to the next stage? And the next stage is typically those 4 things you have to think about. And the one which is the hardest nut to crack a lot of the time is the leadership one for me.

Interesting. Love that. Thanks, Alex. And I just got one— I know you have to go soon, Alex, and I've got one last question, just one, and it's around your, uh, use of social media and copywriting, because there's not many recruiters— I say recruiters, you're, you're more than a recruiter, business owner, entrepreneur— but there's not many people writing content, doing good content, and getting lots of traction on their content. What, what are you mainly using your content for now? Like, what's the biggest asset that social media brings for you and your business? What's the reason why you continue to do it so consistently?

I've started up doing it. I kind of had a year off actually, because I'd been doing it for about 9, 12 months and it was, it was, it was, I was enjoying it. It got some good traction. But again, like everything, it's about prioritization. I had other things going on where I had to spend my time, so I kind of stopped doing it and I've started doing it again a bit recently because my time, certain elements of time have been freed up a bit more. But the reasons I do it from a brand perspective, A, it's really— I'd like to think it's good for the companies that I invest in. If I've got a strong brand and hopefully, you know, people will get some value from some of the stuff that I post, I think that's going to add a level of credibility to the companies that I'm investing in. I can also explain the reasons why I invest in those companies and effectively tell the market, this is why you should be looking at this, because basically this is why I invested in it, because I think it's really cool. And it's going to be massively beneficial to people in the recruitment space. Check it out and go and have a look. So hopefully there's some value there. But also advisory work, you know, I really enjoy recruitment. I, I really enjoy— I think you've got to be able to give back a little bit. And, you know, I had some people help me out early on in my career, give me good advice, which put me on a good sort of track with regards to getting where I got to. So I think that's quite rewarding. I get paid well for it as well, which is always nice as well. So it's good to get that validation. Um, but I, I think there's a number of different reasons, and it increases deal flow as well, because the more recognizable you are within your particular vertical, the more people come to you with potential investment opportunities. So again, from a deal flow perspective, it's really valuable. Um, and hopefully it means I get, you know, favorable terms as well if I ever do invest in stuff because of what I can bring other than purely money from an investment perspective. So Yeah, lots of reasons why I do it, but hopefully that sort of covers off most of them.

Love it. I'm so glad I hounded you for months, Alex, and I'm so glad you came on today because I found this not only just enjoyable to meet you— I think you're a lovely person— but also extremely valuable. So thank you, mate. I really, really respect and thank you for coming on and sharing your wisdom.

I've enjoyed it, chaps. I've been sniffling the whole way through. I've got like a strange layer of sweat all over me.

It's me.

I'm about to go and get in bed. No, no, I'm not. But I've really enjoyed it and thank you for hounding me. As I say, it was nice to come back with a bang and do a really good podcast. I really appreciate it and thank you for thinking of me.

Cheers, Alex. Hey guys, thanks for tuning in to this episode. If you enjoyed it, please don't forget to subscribe on YouTube and Spotify. Tune in for another episode next week and we look forward to seeing you again very soon. Peace out.

Love.