5 ways to make your recruitment business attractive to investors
Whether the current fragile economy is a positive or negative for your recruitment agency, you might be considering seizing the initiative by expanding. Of course, quite frequently when we’re considering a cash injection to bump start growth in our businesses, the fly in the ointment is capital.
Here are some tips on how to make sure your recruitment business is in top shape in the eyes of investors such as banks, venture capital (VC) and angel investors.
Before you pitch your business at an investor try to understand the background to the individual or business. If they are experienced in the recruitment sector then respect this and avoid obvious basics; if they’re new to the sector don’t miss out basics and translate, or better still, avoid industry jargon wherever possible. Whatever their background, all will want to see solid financials; don’t get caught in the Dragons’ Den without the right answers to the obvious questions…
Try to be realistic on the worth and potential returns investors can expect to see. One of the easiest ways of looking like a bad investment is to overvalue your business or make exorbitant claims on financial performance and returns that investors are likely to receive. Crowdfunding is proving to be a useful tool for the purposes of market validation.
The chances are investors have been burned in previous investment projects by risks that were understated or not disclosed to them. Naturally when considering new investment propositions this makes them wary any time they detect any opaqueness around the question of risk. Sharpen your objection handling strategy and put the risk upfront. Honesty here can pay dividends!
Demonstrate your management team is multi-disciplinary and integrates complementary skills and expertise. Strong recruitment expertise, great commercial and business skills and solid financial management are three key areas to concentrate on. Investors may be reluctant to put cash into a business where they perceive holes in management capability.
In the desire to impress and secure investment it’s sometimes easy to emphasise the solid financials while forgetting about the customer focus of the business. Make sure the benefits that make your services truly compelling to your customers are clearly communicated to investors. The people with the money always need to understand why their investment is going to be a winner.
Running your recruitment back office is time consuming, complicated and admin heavy. ETZ saves a lot of this hassle, time and money with our powerful software. ETZ automates and streamlines back office processes delivering cost and efficiency benefits while making timesheet, invoice and payment processing easy.
To find out more about how we help recruitment firms like yours to increase back office efficiency by up to 85%, get in touch today.
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