With the work landscape changed probably irretrievably over the last 12 months, creating new revenue streams is perhaps on many owner’s minds. We’ve put together a roadmap to help you do this, which includes an overview of the options, where to start, and who to involve – both internally and externally. We’ll look at the opportunity costs, the benefits, and the milestones you should use to assess progress and plan for that crucial first 100 days.
DETERMINE YOUR DRIVERS, DECIDE YOUR ROUTE
It may sound obvious but get clear in your mind the reason behind why you want to start this journey. Is it because you need to do something different to survive? Or are you looking to build and grow your business? The answer will help you decide which route to take.
There are various ways you can diversify. You can work with your existing business model, the type of roles you place and sectors you work with, but take them to a new geographic territory – whether that be regional, national or global. Or you can look at new or a different level of roles and take them to your existing clients. The third and possibly most challenging route is to take new or different levels of roles into new markets and sectors. In all cases, focus on leveraging your existing strengths and resources – your staff, candidates, and clients, your product knowledge, and connections – to reduce your risk.
HOW TO GET STARTED
Once you’ve examined options and got some clarity on your route, you need to make a start.
The first thing is to do some analysis. Examine the target market and look at the activity in your chosen sector. It’s important to do a competitor review by examining their websites and job boards and checking what seems to be working for them. It’s sometimes a good thing to follow in others’ footsteps as you let them make the mistakes and find out what works, then you can emulate them but add in your own USPs.
Look at the product knowledge within your consultancy, and decide which roles are similar in their needs and candidate profile – in other words, what’s your transferable product knowledge. See if your current clients can introduce you into new areas that they may work in or whether your team has previous contacts or experience that can open doors for you. Engaging with all your contacts to find out if they can help is a great starting point.
WHO TO INVOLVE
This is such an important issue. It’s really important that any change in direction is owned from the top down by every board member. One member of the board should take responsibility for the project, but we also recommend the appointment of what we call a ‘plus one’, a strong, trusted operational person around whom you will build your team. This position is critical, so do make sure it’s someone who has proved themselves.
You then need to consider what the experience is that is going to be able to deliver the new revenue streams. What gaps are there in the knowledge and skills of the current team? Invest early in the process in the people you need to fill those gaps; consider a non-exec director or board advisor, someone who has been there, made the mistakes and learned the lessons. Moving into new areas is almost like a start-up situation; you need to look for entrepreneurial spirit and understand the drivers for the key person you choose to operationally grow the new revenue stream and who you’ll build a team around.
Also, think about how to reward these people, and this goes back to your objective – do you need a lot of action fast in order to survive, or is it a longer-term project? Structure your rewards accordingly.
Once you’ve decided what you are doing, it’s really important to communicate clearly to your team what your plans are and why. Your best chance of success will be with your people behind you, fully understanding the direction you are heading in.
Change involves opportunity costs. As any economics graduate will tell you, an opportunity cost is the loss or benefit from not choosing an alternative use of a resource. You constantly have to evaluate; if I am doing this, I’m not doing that. Where will you see the best return – that’s the place to start. If you are in survival mode, spending 100% of your time transitioning to the new project may be the best course of action. If not, you may want to allocate a percentage of your time and other resources, with the balance spent on your existing business model. The decision should be a conscious one that is thought out, targeted and reviewed regularly.
WHAT DOES GOOD LOOK LIKE?
Measuring progress is crucial. We’re not talking about KPI measurements but key milestones based on achievements rather than activity. So rather than just putting a number on candidates, you might set a milestone, for example, of X new candidates qualified in the next three months. That’s having spoken to and qualified the right client contacts and found out all their relevant information, e.g. How big is their remit, how do they work and who do they currently use, how they recruit and what they like or don’t like about current recruitment partners. Of course, you will need to choose what milestones are relevant for you, what are the key building blocks for the new part of your business, they are likely to include some financial milestones around revenue, ROI, and EBIT.
BRINGING IT ALL TOGETHER
Once you have thought through all of these issues, you need to bring everything together and commit to paper in a structured document. You can use bullet points, but it does need to be detailed.
Your plan should define your target market by sector and roles, along with your marketing activities and media use. Lay out the responsibilities of who’s going to do what, what are the roles needed, and what training should take place? Who do you need to bring into the business, and by when? Agree on a schedule of milestones, particularly for the first 100 days and review it every week to see where you are on the journey. At those meetings, re-assess and, if necessary, make any changes. What are the rewards internally for the business and the individuals involved for success?
Change won’t happen overnight, but if you want it, you need to be planned, and you need to be bold – who dares, wins. Enjoy the process and the resulting success. Do feel free to get in touch if you would like to discuss anything in this blog in more detail.