How to Scale a Recruitment Agency from £6M to £10M

Key takeaways

• Recruitment agency owners who personally bring in most of the sales hit a ceiling. The business can't grow, and they can't step away.
• To scale from £6M to £10M, you need someone taking care of the past (finance), someone in the present (operations), and the owner focused on the future.
• Your time back isn't a lifestyle perk. For a £6M agency, it can be worth another £4M a year in new contracts.

The business owner in this article has been anonymised to protect their privacy.

At a recent Business Growth Secrets event, I brought the owner of a construction recruitment agency up into the hotseat.

On paper, his business is a serious success. It turns over around £6 million a year, mostly temp placements with some perm, at a 16% margin. He built it on the back of years spent recruiting in the construction sector, and he's just moved into new offices.

So I asked him what I ask everyone in the hotseat: where do you want to be in twelve months?

He didn't say £10 million. He said:

“I want to go on holiday with my family, and know the ship's still sailing while I'm away.”

He's running a £6M recruitment agency and dreads coming home from a week in the sun. If you own a recruitment business, or any business that has grown around you, this is probably the most important problem you'll face.

Why can't recruitment agency owners step away from the business?

Because the owner is still the agency's top biller. In most recruitment businesses, the founder was the best consultant before starting the agency, so new clients, big contracts and key relationships keep coming through them. When they step away, new business slows down, and the agency can't grow beyond the owner's own capacity.

That was exactly the case here. The owner personally handled around 90% of business development and 90% of sales, all built on long-standing relationships. His consultants were good at delivery, but the new business came through him.

I see this in almost every industry. You were brilliant at the job, so good that you were the most valuable person in someone else's business. So you went and did it for yourself.

Being the best cog in the machine is a completely different skill set from building the machine.

What question should a business owner ask before trying to scale?

Ask “If I want it, why haven't I already got it?” rather than “How do I get there?” “How” pushes you into tactics: reacting, firefighting and adding more to your plate. “Why haven't I already got it?” makes you find the real blocker, which is usually different from the problem you think you have.

This owner had the cash to take two weeks off tomorrow, so money wasn't the blocker. The blocker was structure. There was nobody in the business who could hold what he holds.

Try it on your own twelve-month goal. The honest answer usually points straight at the bottleneck.

What leadership team does a £10M recruitment agency need?

A £10M recruitment agency needs someone taking care of the past (finance), someone running the present (an operations director or COO), and the owner focused on the future. Until each of those is covered by a different person, the founder ends up covering all three, and nobody is building what comes next.

1. The past: finance.

Someone owns the numbers that have already happened: invoicing, credit control, clean-up and history. This agency outsourced it, but the questions still landed on the owner's desk.

2. The present: an operations director or COO.

This person runs the business day to day. They put a proper meeting rhythm in place, drive the consultants, own the targets and watch every profit centre. The owner had already sensed he needed this hire. He was right.

3. The future: the owner.

This is where the founder belongs: winning the big contracts, building strategic relationships and deciding where the agency goes next.

At the moment he's stuck in the past and the present, so nobody is in the future. The longer that goes on, the longer the business stays exactly where it is.

How much is the owner's time actually worth?

For a £6M recruitment agency, the owner's freed-up time could be worth another £4M a year. In construction recruitment, a handful of large clients can change the size of the business. An owner who isn't stuck in day-to-day operations can go and win them.

I asked him to imagine that I gave him all his time back, starting today. The business still does £6M, everything is taken care of, and he doesn't even have to show up. How much more could he make?

My honest view is that he could make another £4 million. He's probably only five or six big contracts away from it. He can't go and win them because he's glued to the day to day.

That's the bit most owners miss. Senior hires aren't a cost you take on so you can go on holiday. They're the route to the next £4M. The holiday is a by-product.

Why this matters to me

I've built three eight-figure businesses. On the first two I made exactly this mistake. One of them was doing over £40 million a year, and I didn't have five minutes to myself. I was stressed all the time.

There is no point having the money without having the life.

It took me years, and some great mentors, to get that balance right. This owner can do it in twelve months, because now he knows exactly what to fix.

How to apply this to your business

• Check who's holding the sales. If you're the top biller, top salesperson and main relationship holder, you don't have a business yet. You have a very demanding, very well-paid job.
• Ask “why haven't I already got it?” instead of “how do I get there?”
• Map your past, present and future. Write down who owns finance, who owns day-to-day operations and who owns growth. If your name is in more than one box, that's your bottleneck.
• Plan in twelve-month blocks. You can control the next twelve months. Five-year plans are dead.
• See senior hires as growth, not overhead. Your time back is worth far more than their salary.

He didn't need to work harder. He needed to change his role, and that took ten minutes to work out.

Frequently asked questions

When should a recruitment agency hire an operations director?

When the owner is still the main source of sales and can't step away without performance dropping. An operations director or COO takes over the day-to-day running of the business so the owner can focus on growth.

What senior roles does a recruitment agency need to reach £10M?

Adam Stott's advice is to cover three areas. A finance lead takes care of the past (historic numbers and cash), an operations director or COO runs the present (team, targets and meeting rhythm), and the owner focuses on the future (strategy, big clients and growth).

How do you scale a recruitment agency from £6M to £10M?

Take the owner out of day-to-day sales and operations by hiring a strong operations director and putting proper financial oversight in place. The owner then spends their time winning the larger contracts that grow the agency.

Why do business owners feel they can't take a holiday?

Because the business depends on them personally, usually for sales, key relationships or decision-making. The fix is structural: give each area of the business its own owner, so performance doesn't depend on the founder being there.

About Adam Stott

Adam Stott is the founder of Big Business Entrepreneurs and a business growth expert. He has built three eight-figure businesses and helps business owners scale through events, training and coaching.

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