Down but not out! Diary of a recruitment entrepreneur Pt 5 (Yr2)
So welcome back & at the point of writing Happy New Year 2018 🙂 It’s been ‘both’ hands to the pump in Macstaff recently, as I’ll explain. hence the absence. but now I think there’s a new tale to tell!
My diary part 1 covered the leap of faith into my great recruitment unknown, part 2 was a celebration of the ‘firsts’ of Macstaff, part 3 was pushing through the daily grind. Part 4 was my obsession with scale-up. Now this part 5 is dealing with set-backs, and how in 2017 I was down but not out!
So flushed with early success and celebrating Macstaff’s first anniversary, things looked pretty good. The order book was full, regular customers were putting more business our way and I was considering accelerating my scale-up plans. Growth is after all preached at pretty much every seminar, expo and business coaching exercise. Conversely, my close personal advisors, especially family, and especially those from the generation above, advocated patience and caution which I didn’t frankly like the sound of!
In the end I had no choice but to stall the scale-up …
I completed my first years taxes in conjunction with my accountant feeling pretty proud of myself. It was good news … BUT it was good news & bad news. I’d made healthy profit BUT was going to pick up a tax bill much larger than I anticipated … AND apparently you can’t be late paying ‘the tax man’. Hmm, I had thought that having an accountant was pretty much like having a magic eraser for tax. but apparently that’s not the case. In recruitment there isn’t too much purchased e.g. tools & raw materials etc. as we are a service industry. Therefore, there are relatively few costs to offset against revenue to reduce the profit number to reduce tax burden. Yes, as usual I hadn’t crunched the numbers in detail in advance and was caught by surprise. Thinking back this scenario rang a distant bell from a guy called Peter, a fellow recruitment business owner who gave me an excellent pep talk before launching Macstaff. He’d told me to make sure I put 20% of earnings to one side in a separate account as you go along. When you’re running a desk, you can live in the here and now, or at least in the short term. Note to self … when running a business, you need to think strategically and on a year on year basis.
Oh well, no problem, all the future deals I had lined up, (through blood, sweat and tears), would easily fill the gap, right, and I’ll save as I go along next year I promise! 🙂
That’s when things got really tough. As Mike Tyson said in one of my favourite quotes, everyone has a plan, until they get punched in the face! My punches came in the guise of candidates pulling out of jobs they were due to start. 3 in fact. 3 in the space of a couple of weeks. 3 with the same client. Oh No! Each scenario was different and unrelated, and there wasn’t much I could have done. It was just terrible luck.
However, a key account and a favourite client was not happy AND this was going to cost me ~£20K that I kind of needed for HMRC! I could go back to my angel investor for more money, but I didn’t want to do that. I could look into a bank loan to bridge the gap but I didn’t want to do that. … I couldn’t now in good conscience hire staff. Damnations!
This was certainly a low point, so I stressed out for a bit and wracked my brains for a quick fix. However as usual none was to be found and I resolved to do what I have done many times before, just get my head down and do the work!
I did a UWCB (Ultra White Collar Boxing) charity boxing match in 2016. To carry on Mike Tysons metaphor I actually felt my back hit the ropes at one point in that fight as I reeled from punches landed by my opponent. At this point I gritted my teeth, literally bounced back off the ropes, threw a few counter punches of my own, dug deep and fought back. That was what I had to do with and for the business in the summer. Literally for the back half of 2017 I was back to basics, keeping the values in mind and working diligently, honestly and enthusiastically on the journey to put a key client relationship and the company finances back on track. This path was walked one candidate at a time, one job at a time, one placement at a time.
A great lesson, but we all want to learn ‘the lesson’ without going through ‘the pain’ right?
So, was 2017 a bad year? Is Macstaff to be forever a one-man show? Absolutely not and no!
Year 2 should be roughly 50% up on Year 1 when the beans are counted in April!
Also, we will exit 2017 in better shape than coming into 2016 due to a series of business improvements, for example:
For more information on these favourite vendor partners, feel free to give me a shout. I’m always happy to chat and share advice … plus I’ll get a referral bonus if you go on to be a customer! (We have to look after each other right) 🙂
And as for scale up. It will 100% happen, and I now have a lovely office new in the chew valley, south of Bristol to accommodate people. BUT I’ve learned the patience lesson now. It has to be the right people and in the right situation. In fact, with REC now having an approved Recruitment Apprentice certificate, I may go down the apprentice route, but more on that next time and bye for now!
If myself & Macstaff can be of excellent service to you as a client or candidate feel free to give me a shout anytime, at coordinates below.
Likewise, if you are interested in joining the Macstaff mission as a full timer, part timer or freelancer, I’d be happy to discuss a proactive move!