We don’t need to tell you that contacts are a big part of any successful recruitment agency, and it’s common for one or two big clients to form the cornerstone of an agency’s early years – and to be the foundation they build on for continued growth afterward.
While it’s important to diversify so that if anything happens to those cornerstone clients, your agency will survive, it’s also worth keeping an eye on your big sources of income to see when new opportunities will come your way.
Backing the Expansion
Many of you reading this will remember having been delighted by the announcement that one of your clients was opening new premises and would need to recruit heavily, or that a new division was being added to the company. This is almost always great – except…
Expanding Horizontally… Literally
One of the goals for many businesses is to eventually expand overseas. Making this work requires serious investment. That means plenty of new jobs, both abroad and at home, doing the work and overseeing it – and usually, a company which already has a trusted recruiter will turn to them and ask for support.
For most expansions, TBOS immediately advise our clients to back their biggest customers and focus on the boost it’ll give their own bottom line. But here, we have to recommend carefully thinking it through first.
Look After Your Bottom Line
Suppose you have a good reason to think finding contractors will be easy.
- Would it make you any money? Can you even break even on the deal? Do you know?
- You can’t bankrupt your agency for your clients. Before you give them an answer on whether or not you can support them, check and double-check your liabilities.
- Will you be able to set up invoice finance with a good return?
- What tax exposure are you looking at?
- Are your contracts compliant with the laws of the other country as well as your own? (Probably not – and the lawyer to change that will cost money.)
- Is this a loss-making venture?
As a back office support company, TBOS has seen the results of agencies failing to ask these questions in clear and full detail all too often, and even through services like TBOS Complete and TBOS Freedom we can only help so much once a bad decision has been taken.
Expanding overseas can be very profitable, especially as part of an established strong working relationship. But it’s a risk – and you need to have measured that risk.