In the first of a new series in which we talk to entrepreneurs about starting up their businesses, Marc Cohen, founding Director of ConSol Partners, tells us about the difficulties of setting up a recruitment firm in the deepest recession in living memory, why you need to have a roadmap for your business and why it’s important to celebrate your successes.
What does your firm do?
Consol Partners is a recruitment specialist in the Internet technology space. We have made placements in 38 countries and our clients include Cisco, MTV, ITV, IBM and HP.
How many employees do you have?
We currently employ 45 full-time staff, but we expect that number to double over the next two years.
What are your firm’s revenues?
They will be over £10 million in 2012.
How long has your business been going?
We launched on January 1 2008.
Is this your first start-up?
I was a minority shareholder in a previous start-up, which I reached a financial exit from, but this is my first start-up in which I’m a 50-50 shareholder with my business partner Graeme Hubert.
Why did you start your own business?
I wanted to secure my long-term financial independence. I also wanted the day-to-day independence to make my own decisions and to run a business how I want to run it. I should say ‘we’, because I run the business with Graeme, but they are the reasons why I started ConSol.
Has your business plan/strategy changed since your firm began?
We wrote our business plan in mid-2007, when the economy was still growing, but by the end of 2008 the economic climate had deteriorated sharply. At the time we began writing it, recruitment companies were having a pretty easy time, but soon afterwards we were in the biggest recession for 50 years. That forced us to change our strategy, so we chose to focus on recruiting for niche technology sectors that were still growing.
Ultimately a business plan is always evolving, because you’re led by opportunities. If you can hire someone to open a new division for you then you’ll do that, even if it wasn’t in the original plan. Conversely, you can plan to do something, but if you can’t find the talent to help you to do it, then that’s that.
What’s the biggest lesson you’ve learnt since starting up on your own?
To trust my own judgment when making decisions. We get advice from lots of places but I’m accountable for those decisions, so I want them to be based on what I think, not what others think.
I learnt that when we lost two key people a couple of years after we set up. It was a crucial moment for the business and we were given a lot of advice about what to do next. The consensus opinion was that it could be a big threat to our business and that we must respond by making everyone work longer and harder to make up revenue that we may lose from the departure of these guys.
But the advice just didn’t sit right with me. In fact, we did the opposite of what we’d been told to do: instead we reassured our staff that we were a strong business with great client relationships and that the departures gave other people the chance to shine. And they did. In fact, it was a watershed moment for our business: it went from being a small firm centred on a few key individuals to being one where everyone delivers. Out of adversity came a big success for us.
It taught me that it’s better to do what I think is right, than to do something that others told me was right, but my gut instinct told me was wrong.
What’s been your biggest mistake?
Not putting a management team in place sooner. We were focused on maximizing sales, but we soon got to a size where we desperately needed a management structure, but we didn’t have one in place. It took a couple of months to bed one in.
With this in mind we now ensure we take the right calculated risks early. We’ve drawn up a roadmap for growth, so that by planning in advance for the changing landscape of our business, we can stay ahead.
What’s been your biggest achievement?
I tend not to pat myself on the back too much. I just look to the next challenge that needs to be tackled. But if I look back at what we’ve done since we set up then I guess it would be to have grown so rapidly and to have become so profitable in the deepest recession in living memory. We have doubled in size each year, on average, since we’ve been in business. I don’t think there are many other companies that could say that.
If you were Prime Minister for a day, what would you do to help small businesses?
I would create a scheme to offer tax breaks to successful businesspeople if they sit as non-executive directors on the boards of small businesses. Entrepreneurs would love to tap into these peoples’ wealth of experience but they can’t afford to pay for their time.
I’d also change the tax rules so small business owners aren’t taxed so much on taking profits from their own firms. At the moment entrepreneurs are taxed four times: they pay National Insurance on their employees, National Insurance on their own salary, corporation tax and then they pay income tax – often 50% of what they earn. That level of taxes cripples a small business, where money and cash flow is often tight. This acts as a brake on many small businesses expanding, especially as owners know that if their revenues increase the extra tax will eat into their incomes. That’s why 90% of small businesses don’t get above employing five people. Most people can’t afford to reduce their income for any length of time, let alone those who’ve sweated blood to set up a business.
What are the best things about running your own business?
I find it very satisfying to know that my business is giving people employment and the opportunities to improve themselves. It’s like having a family: you see people grow and develop and reap the rewards of their hard work.
In recent years I really enjoy the independence being an owner brings. I can make my own decisions – from which direction I take my firm, to the location of the next office or even fun days out. I think that freedom is really empowering.
What plans do you have for your business in the next year or two?
We’re moving into stunning new offices in November, with double the amount of floor space that we currently have. That will facilitate new growth for us, which is crucial.
Also, we’re starting to see a return on our investment in creating graduate academies, which offer intensive three-month training to selected graduates. They are starting to generate sustainable revenues for us as well as staking their claim to be the next generation of managers who will guide this firm’s future.
What tips do you have for people who want to start their own businesses?
If you’re thinking about starting up on your own then just do it. It’s empowering to take a risk and set up your own business.
Have a clearly defined goal in mind when you start out. Know what you want to ultimately achieve. Plenty of people run their own businesses without having a clear-cut ambition of what they want from them.
Once you’ve done that, set milestones for the business and stick to them. Set targets towards achieving your goal and don’t reset those targets just because something has happened within the business – you still need points to navigate your business towards.
Also, celebrate the successes, because you’ve worked hard to achieve them. It’s something I’m not very good at myself but I’m trying to get better at it. You need to congratulate yourself when you do well because at the end of the day it’s all about your hard graft. If you want to build a business then you’ve got to work relentlessly to achieve that. You quickly learn that there are no short cuts to building a successful business.