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The Ups and Downs of Recruiting Entrepreneurism – Part 1: Critical Choices
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As recruiters, we are entrepreneurs. Even for those of us who are employees, we are still entrepreneurs. Since our industry is incentivized, we get paid on what we produce: close more deals, make more money. This is what entrepreneurs do. And as self motivated people, we have a huge tendency to always be optimistic as to where and when the next deal is coming from. The ‘what if’s, ‘maybe’s, ‘should have’s, ‘could have’s, and being so close to the deal are the bane of every good entrepreneur’s existence. Even if you disagree that you are this way, I openly admit that I am. Even my wife has been programmed to ask me about the activity level of my staff and myself every few days. And, of course, I am always optimistic. Aren’t most of you?
This, however, is where the problem begins because being an eternal optimist has a way of playing with your head and emotions and ultimately gets in the way of making smart and sound judgments about your business. It certainly has for me, especially since the middle of 2008.This is where the paradox, or dilemma, begins and actually ends for me.
Here is a brief synopsis of my business history. From 1983-2008, my core business revolved around the retail industry. I grew up in this industry and this is what I know, and those who know me also know the retail industry inside and out. In addition to the retail industry, I have always worked in other business spaces: advertising, hospitality, sales, banking, and information technology. My best run in non-retail industry space has been in the advertising industry in which my company flourished for ten years. The events of September 11, 2001 undid those ten years of success pretty quickly. Closing this division was an easy decision. The business just stopped: no openings, no activity, no callbacks, and no emails for over three months. I just walked away and never looked back. Then, in 2004, my daughter joined forces with me to start a technology recruiting firm. She brought with her eleven years of technology recruiting experience gained with two very well-known staffing firms and two of the Big 4 consulting firms. We formed a partnership and before we could blink, we were rolling along and the business doubled for three consecutive years. Coupled with my retail industry division, we were doing a hefty seven-figure business. We employed eleven other people and couldn’t find candidates fast enough. Sound familiar? I am certain to most of you this sound eerily familiar,
In the middle of a spectacular 2007, my office lease was coming to an end. We were crammed into about 2,000 sq. ft. of space with a landlord that did everything possible to not renew our lease. In May we moved to a brand new 3,700 sq ft space with state of the art work stations and a new phone system plus free parking which saved me $9,000 per year over my old building. At less then $2,000 more per month for rent for almost double the space, I would imagine that 99 out of 100 of you would have done the same thing. At the time, it seemed like a no-brainer. Then, as we slid into 2008 relatively easily, and with no warning, the wheels started coming off by early spring.
Now I may be a lot of things, but naïve isn’t one of them. In my previous 24 years, I went through four recessions (or at least downturns in the economy) and it had been around seven years since the last one so I knew we eventually would hit a wall. I just didn’t expect it to be so soon or so severe, and I didn’t expect the wall to be so high. Admittedly, I wasn’t prepared. I know I was in good company, but it didn’t make this pill any easier to swallow…
Ahh, the memories.
I remember 1991 quite vividly. I was down to one recruiter and me, exactly where I started in 1983. Back then, I cut where I could and went into survival mode, and by mid-1992 we were rolling again. However, as we all know, this current recession is vastly different. It looks different, it feels different, and in fact it is very different. (You would have to be on a deserted island not to know this so no revelation here). I thought I went into survival mode two years ago, when three of my long tenured retail industry recruiters retired, rather quickly I might add, thus forcing me to shutter the division almost immediately. Realistically, it was the only thing to do because you might remember that overnight, the stores became ghost towns. So many companies closed so quickly it was impossible to keep up with them all. For me, I was like a baby losing my blankey or pacifier. (I identify with little kids because I have 3 little grandkids now and this seems to dominate my life these days)
This is when I started thinking that maybe it was time to move on, to close up, after a very successful 24 year run. Buuuut…. we were still doing some IT business – in fact, we had some very high profile accounts, we had gotten some really good assignments, and it looked as though we could withstand this downturn. So the entrepreneur in me said, “hang in there, baby!” and we did. We cut more payroll, almost all of it part time, cut our expenses to the bare bones. I was fortunate to be able to lease out 70% of our space to two other tenants, cut hours, and once again hunker down. We made it through 2009 and found ourselves, remarkably, in the office in January, 2010. (Seems like only the day before we were worried about our computers crashing because of Y2K)
New Year = New Start?
2010 started out pretty strong. We closed a few good deals, had much more activity then at the same juncture in the prior year, and we were pretty optimistic. However, we did not count on our fortunes changing so quickly or drastically overnight. After all, we hadn’t had a major snow storm in years in the D.C. area. The snow started, and continued, and continued – and before you know it, we had over 40 inches of the white stuff in the Washington, D.C. area. The metro area closed down for weeks. Since the vast majority of our business is done right here in D.C., our clients and activity shut down for weeks also and we just never seemed to recover the momentum. So what did I do? I cut more expenses and looked in every nook and cranny to cut even more and attempt to save more money. Well, there is no more to cut. Every day I wrestle with the same question: SHOULD I STAY OR SHOULD I GO?
On a few occasions, I actually resigned myself to going. After all, I’ve had a wonderful run. I have kept this business afloat for 26 years, which, as many of you know, is no small feat. As a matter of fact, surviving 26 years in the same small business, with 20 years being fantastically successful is way beyond my wildest expectations and is tied with my 40-year marriage as the greatest achievement in my life. However, I always think of myself as a realist, or at least I thnk I do and all the signs are pointing to this being the end.
Then three weeks ago the flood gates opened up, we got many multiple assignments from previously dormant clients, we have a great deal of activity and optimism is abounding. I always told my mini staff that if we can just get through this exceedingly rough patch, we will reap the rewards of all this pent-up demand.
Is this what I am seeing, or is this like a vast hallucination of a huge oasis in the middle of the desert?
I can’t make up my mind. I just don’t know. Today I feel optimistic again, tomorrow, well, who knows what tomorrow will bring. After all, I AM AN ENTRPRENEUR.
To be continued……………………………!