Don't Make This Costly Mistake In Your Agency - Fix It Now

Hello ladies and gentlemen, James Blackwell here. And in today's video, I'm going to be sharing with you the biggest mistake most agency owners are making from hitting that magic 84k a month in their agency. If you scaled your business where it's consistently generating £84,000 per month or above over 12 month period, you've got a seven figure million pound plus a year agency. Now you might have found that journey from 0 to 10k per month actually quite difficult. Then you probably found it a little bit easier to get to the likes of 30k a month. But scaling it beyond that and beyond you is hard because it's normally going to come down to one core problem, a problem you won't know exists until you actually get there. And even then a lot of people don't even realize what the actual problem is. And once you're facing this problem, you'll need to stop, you need to draw back and make adjustments to your strategy. And this problem is actually building a team, delegating off everything that you're doing day to day yourself and actually building out a small boutique type of a player team that's going to start taking a lot of the responsibility from you. And when you do start to do that, then you're going to need more tools, you're going to need more systems in place. And as you start to scale that, the more money comes in, the more money goes out. In fact, your bank balance is probably changing all the time, up and down and you don't understand like why you're not making as much profit as you did when you just tuned 30k months by yourself. And the reason for that is you've taken that strategic decision to scale your business. At some point you're going to have to do a short term sacrifice for the longer term benefit of your agency, your profits. So that's when you're putting that money back in and you're reinvesting it in the business. And a lot of people go wrong with this because you get a little bit worried and concerned because they've spent that time where they've been working hard in their business, most likely a slave to the business, getting 20k months, 30k months, and to get it to 100k months and beyond it requires making sure the business model is right first. So like actually getting under the bonnet of the business and seeing you've got client lead generation, client acquisition, then you've got candidate attraction and then you've got candidate delivery, and then you've got operations and finance that can be Outsourced and we can delegate that for a later date. But really when you at those probably four key pillars, as you grow from 30k months to 100k months, you need more people in the team. And with more team comes more complexity. But however, over a period of maybe three, six, nine months, once that team is bedded in and you've done all of the adjustments, that's when you can take a step back from the business because you start to buy back that time because then that time is just to manage the team. If you do correctly, you'll get a team that can pretty much be self managing if you make the right hires and the right type of a players. But also as your business grows the costs and grow. So there's normally three ways when you're struggling with profits to the business and increase the profits. So the first thing is increase prices. So when we increase prices in a recruitment agency, it's not a case of a cost per placement. We do it as a percentage margin. So say you might have started off just doing maybe 14, 15%. I used to creep it up. So then I would start it at 15.75% and even if it's a 0.75% increase on the rate of the average salary, it's still around about like a 5, 10% increase. And then you can raise it up again to 16.5, then you could go to 17.5, then you could go To 18.5%. These little increments can make a big difference in terms of off the revenue that comes in. Because say if you've got 100k salary that you're recruiting on and you're originally doing a 15% fee, it's 15k. If you increase that to 17.5%, you've got a 2.5% increase which would give you another $2,500 per placement. That's a big difference because that adds up over 10, 20 placements a year. That could be the difference between making an extra 50, 100k a year profit just on those increases in a small boutique agency. The second thing is decreasing costs. Talked about this on a different video about trimming the fat in a business. Are you paying for too many subscriptions? Have you signed up for too many tools, have you overpaid for some of your beers or your people members in the team? There's always different costs that you could look to decrease. And the third and most obvious thing is to sell more, win more clients, exclusive, retained and make sure that each delivery consultant is actually billing more so one thing that I would do is like have each recruiter delivery consultant having at least a marketing source and a veer with some automation. So the outreach for candidate attraction is very, very high. So that means their diaries are jam packed speaking to candidates every day because the more they're speaking to you candidates every day and the more they're selling cvs, getting interviews, they're closing modules and that's the quickest way normally to increase your business profits is by squeezing what you can from the delivery consultants you've already got. Because growing a seven figure agency should still be about freedom, the opportunity to do what you want, work when you want, ideally make as much money as you want because the business should be there to serve you eventually, not you serve in the business. One thing's for sure, you shouldn't be working 10, 12, 14 hour days anymore. Once you get past the 30k months, that's when you can start to delegate. Also, one thing that I looked at when I scaled my agency successfully was we had a lot of repeat business from clients. So when I signed what I would call platinum clients, as such, that meant like I was increasing the customer lifetime value because they were coming back again and again to do more business with us. So it meant we didn't have to bring more leads in and win more clients all of the time. We would do 10, 20, 30 placements a year with some of these companies. It's still with us from a long time. So I've still got clients that we won in our first year and it's year seven in the business now and we've generated probably $1.52 million with some of these companies because we've built a solid relationship with them. And when we started to invest in our marketing channels in terms of generating more candid and doing things a slightly different way, we were able to deliver results with the candidate flow. That wasn't really our niche specialism. So for example, we were recruiting for software engineers, but then we would also do product owners or project managers or different areas like testing. And we were able to deliver them with our key clients because they knew they know us, they like us, they trust us. Those three pillars, you cannot grow to like a level six of your business when you're still at a level two. What I mean by that is you need to upgrade your mindset and your environment and all of these habits daily because if you want your business to be here, but you're at a level two, you, you need to raise those standards and you need to start Making adaptions to your daily habits, your rituals, your mindset, the people you hang around. That's very important to make sure that you can reach up to that standards of the business that you want to create. So just to round it up, like two things are going to happen as your business grows. Number one, you're going to have more expenses, but don't worry, it's part of growth. Number two, your profit margins are going to get thinner. And the best way to overcome this is to have solid systems, a solid blueprint of knowing the foundations of what type of business model you're building and the right strategies that you can implement to make sure that every single client that you've got coming in, you can deliver on the back end with the candidate. And the next thing that you need to do is make sure you're delegating all of the low income generating tasks, creating a solid, robust sourcing machine. So it's sourcing candidates 247 for you. So the more candidates that are booked into yours and your team's diary, the bigger chance you have a success. Create a sourcing machine. So making sure that you've got a sourcing machine that's booking in candidates directly into yours and your delivery consultant's diary. So that's going to give you a better grounding to make sure that you can make more profits and do more deals. Then also making sure you have SOPs in place. So like standard operating procedures to onboard every delivery consultant, onboard every va, onboard every marketing sourcer, how you do everything in your business, systemize it and create SOPs, and then making sure you've got a solid client system because once you make sure that you can deliver more candidates, you're going to still need more clients. So having both a new funnel to get new leads in, but also one that's going to keep the current clients that you've got and being able to diversify within that client base to deliver more roles for them successfully. I hope you enjoyed this video. My name is is James Blackwell and I'll catch you soon.