From Start to Sale: Insider Secrets for Building, Scaling, and Selling Your Recruitment Firm with Serial Recruitment Entrepreneur Mike Ames

Intro [00:00:00]:

Welcome to the elite recruiter podcast with your host Benjamin Mena, where we focus on what it takes to win in the recruiting game. We cover it all from sales, marketing, mindset, money, leadership, and placements.

Benjamin Mena [00:00:19]:

I am excited about this episode of the elite recruiter podcast. I have my special guest, Mike Ames, to talk about how he has grown and sold 2 staffing companies. And now he's a consultant helping other people do the same, but we're gonna dive in and talk about the stories of, like, What he did, how he sold them, and lessons that he, like, wished he'd learned or wished he knew way back when. So Really just this journey is about helping you guys that have I know some of you guys have told me about you guys looking at, like, selling a staffing company. Mike Ames is the pro when it comes to this. So, Mike, welcome to the elite recruiter podcast. Thank you for having me on the show. Benjamin, it's a An absolute pleasure to be here, and I hope to be able to help your listeners in some small way as they build their business and head door to sale. So let's just jump in. So two staffing companies who've grown at all.

Mike Ames [00:01:10]:

Can you talk a little bit about those? Sure. I can. I'm even going to try and convert the numbers from pound sterling into dollars. So let's see how we get on with that, I think. Okay. So, originally, I started in IT. So it took a degree in computer science from an English university and then started to be a programmer so on and so forth. And I won't bore you with the full story, but I was offered a job at Reader's Digest in Upstate New York in Westchester. and we were very excited to transfer and live in America. But for one reason or that didn't happen, and, always, it's a bit of a loose end, really. You know, You're excited about doing something, and it doesn't go off. It's like, oh, yeah. There's a big gap in your life. And so I was a contractor at the time. Free My agent said, well, hey. You know, you should try recruitment. I think you'd be okay at it. And I was so desperate. I said, yeah. Okay. Then I'll do that then. So I took a 50%, five zero percent pay drop to do it. I went to work with him at the company that he worked at. We stayed there for 6 months. and then someone said down the pub. Do you know what? We could do this. How far can it be? And we left, set up our 1st business in April 1989, and I was in recruitment.

Benjamin Mena [00:02:26]:

That's a go, really. Wait. So you stumbled in recruitment. because a a job didn't work out. They recruited you to their position. In 6 months in, you're like, you know what? I can do this for myself. Yeah. Yeah. Well, I think

Mike Ames [00:02:39]:

I suppose if I'd known then when I know now, I wouldn't have done it because I'd have been frightened to death. But I thought how hard can this be really, you know, I've been a freelancer for so long and worked for agents. So it's seen them kind of do my end of the business, find me jobs, that kind of I had no idea how difficult it was, really, to build a scalable recruitment company and keep it shape as it grew and all that stuff. So no clue about all of that. I just thought, well, it'll be a bit of a wheeze, really, so we did it. You know? So off we were just but, unfortunately, the so there were 3 of us involved. And we we started April 89. And then November 6 1990, the senior guy, the guy that That really my boss who I've gone to work for that had offered me the job in recruitment that knew every and everything about recruitment. He was killed in a car accident. He was only 38 when he died. And, I mean, You know, it was a horrendous time personally because I'd really love the guy. And then he was family, got a young family, and But, also, I've got this whole personal grease thing going on. But, also, I thought the business would go bankrupt and I'd lose my house and It was horrendous. So all of this was going on, and that was the worst, I think, 12 to 18 months following his death that I could possibly imagine. I can't remember most of it. You know, Benjamin, it's blocked out in my head. Few flashes of things. I'll tell you this, I said and did some things that that I deeply regret saying and doing that because I was just a bit I don't know whether this translation to an American, do lollipop. madder snakes. I wasn't thinking properly, but but that process sink or swim completely changed me. Completely changed me because it was single slip. And and I wish Mike hadn't died. I wished he hadn't gone through that, but he did. And I'm glad that I managed to get through it with my team and with my family and everything else. You know, the support wasn't just me. But that was and so that's really how How I became the MD of the business in the end, which isn't isn't particularly nice way to do it, is it, really?

Benjamin Mena [00:04:54]:

It's not. But, I mean, we I think every successful person that we brought on this podcast, they've had that moment where they had to either sink or swim or choose to dig down and dig deeper. And, you know, most of them kinda, like you know, I I wanna say, like, you know, cover the topic a little bit, but, like, you had like, you have how many people are on your team at that point in where you were forced to. When he died,

Mike Ames [00:05:19]:

I think with ground quite quickly, there was probably 8 or nine people in the firm.

Benjamin Mena [00:05:24]:

So you're you have the responsibility of, like, those people. Yeah.

Mike Ames [00:05:29]:

I remember the first time. Actually, died. I went Complete clarity on that first day. I went to the office. I haven't slept very well all night. On the way, you know, I was crying in on the way to work. I just couldn't stop. Right? I got there, and partly I was crying for him, partly I was crying to myself, you know. You know what I mean? because I didn't know what to do. Got there. Everyone had come in. to the officer all there. And I had no clue what to do at all. And do you know what the first decision was I made? My PA used to be Mike's PA, but now my PA bought in the post, you know, the mail letters and things. put it on my desk, which had been Mike's desk. And I said, right. Well, the first thing we're going to do is we're going to collect stamps for charity. So in the UK, you can collect stamps, postage stamps, and they send them off and you and they they get money for charity right. That was the very first decision I took. And the only reason I took decision was because I could. I it's something I could just do that. And that silly little thing was the turning point weirdly mentally for me. It's like, well, okay. How hard can this be really? You know, and it took some time, and there was a lot of support. But eventually, we kinda turned the corner. And and the other thing goes interestingly, There was a lot of loyalty for Mike who died from our client base and our contractor base. We provided contractors into it, miss. You know? And and so they they saw us through. They gave us a little leeway, I think, as we were trying to stumble through and find our position. But it was the start of a a whole new adventure, really. And then that took so that was took a year really to get through all of that mess. We started up what in the UK is called an RPO company recruitment process at. We started one of those in the UK, which was one of the first start of those kinds of companies in the UK. And then we started a software house. So we wrote computer programs and managed businesses, and it was that portfolio of of products that we sold to what was MODIS which was an an American staffing business, which I think now is owned by Deco, actually. I think it still exists. I'm not sure. Not as an entity on it, so I think the brand still exists. who we sold to Modi said November 7th, the day after Mike's anniversary of his death. 19 98. And at the time, we were doing our revenues for about £40,000,000, which is about probably today's money about £70,000,000, which is probably around about $90,000,000, I would think, around about that kind of figure. And the profit, EBIT, is that thing EBITDA, do you use that word? Oh, yeah. Yep. Okay. Oh, yeah. The EBITDA was probably, in today's money, would have been about 4 or $5,000,000,

Benjamin Mena [00:08:16]:

I suppose, somewhere in that neck of the woods. I guess. Nice. And how how big was the company when you sold that 1? Like, staff staff size. About eighty six people,

Mike Ames [00:08:26]:

about 470 contractors, freelancers. Okay?

Benjamin Mena [00:08:30]:

Yeah. Done for that company. What were some of the the most important factors that you guys figured out to scale it successfully.

Mike Ames [00:08:39]:

That's there there's an interesting thing there, which I see a lot in growing recruitment firms. When so okay. So there's the rule of 34 and 8 when it comes to growing recruitment companies. Right? So it takes 3 years to establish a viable recruitment company. By that, I mean, got some clients, got a few people, got a few processes in place, got some money in the bank, You know, kind of got a viable business, really, but it's not scalable. So you may have broken the link between How hard you work and how much you earn as the owner, but you still need to be there that the business isn't integral on you. Right? It then takes 4 years to make yourself scalable. In other words, to to make no part of that business depend on the named individual for its success. including the owner. So it took me 7 years. After 7th year, it didn't matter whether I went to work or not on a day to day basis. Right? And and that's how long it takes to build that scalable business. And then it takes 8 years after that to become wealthy, whether you sell or whether you don't. If you run a business at that size for 8 years, and take the money out and invest it, you become wealthy enough to retire. Right? So it's at 3, 4, and 8. So we came to the end of that 3 years. That 1st 3 years, we had a viable business. But we weren't scalable. So I was involved in everything. Most decisions went through me. To begin with, I was at at an absolute benefit to the business, an asset. And then it switched and I became a liability because I was at saturation points. You know, I couldn't do anymore. But because everything was wrapped around me, the business started to grow. And in the UK, there's a term called a yo yo company. It means A company that grows in their drinks and then grows in their drinks. It's very, very common in recruitment companies because they don't get past this stage They shrink because that's the only thing they can do. People leave and clients leave and service levels drop and profitability drops, and then people start again. What you have to do and what we did, we hired a consultant to name was Anne Marie Hanglong, and she came in and told us how to be scalable. She was very good. And she was with us about 18 months, I think. And she came, and many of the changes that we made I still use today with my clients. But, really, what it did, it started us on a journey to scale. So it took us 5 years 5 years to get to £5,000,000. And another 5 years to get from 5,000,000 to £40,000,000. So you can imagine what the growth curve was. That is a great curve. That was because we became we became scalable. Took us probably 2, two and a half years who didn't take a full 4 years. Took 22, a half years, I guess, to make that transition. Very happy to explain what that means in a second if you want me to. It took us that time to transition to be scalable then pretty much we could have made it as big as we wanted, I think, because the foundations were in place to make that switch. But it's because of her, she she started that process, and then we carried it on. And it didn't you know, this this idea of scalability, a true scalable business. is not dependent on named individuals. That's its definition. So if someone leaves okay. Whereas a viable business, if someone leaves, well, that could really hurt. And so you need to get out of that space to make yourself safe and secure, and then you don't yo yo. Your business keeps growing and growing growing, which is what most people want.

Benjamin Mena [00:12:07]:

Awesome. So you sold that business. You grew it, scaled it, sold it. Yeah. And then you started all over again.

Mike Ames [00:12:14]:

Yeah. I signed up. With them, I didn't want to leave. My other business partner left, and he didn't want to stay. That's fine. So he went, and he's not worked since. He's you know, that's fine for him. But I wanted to work. I like work. So I wanted to stay and I wanted to stay with them. But then the two people who'd been instrumental in the purchase Both left. They were based in New York. I liked them both, respected them both. They both left. And I had a new boss who It wasn't a I disliked him. He didn't share the vision that the original 2 people had had. So that change was pivoted direction. It wasn't a direction I wanted to go in. So and at the same time, this is 2000. At the same time, the economy in Britain plumitted because of the year 2000 IT just went to the full. Everybody had spent all this money to try and keep her the lights on from January 1 2000. and they've got no more money to spend or anything. So so that we weren't gonna hit the deal out targets. We did the 1st year. We did half the 2nd year. We weren't gonna get the 3rd year. So I said, look, you know, I think I'll leave. And they said, yeah. Yeah. because they helped me responsible for the state of the economy. It's like, What can I do? Anyway, I left and didn't do anything for a while. It was the weirdest of things. Right? I've never been so wealthy. Didn't need to work. I'm so depressed to have to have a counselor, had to have therapy because I was so depressed. I was just at wit's end, really. And I don't know why that is. Obviously, I've been in therapy, and I can't understand it. But at the time, it was real bad, you know, and what happened was Couple of the people that used to work for me. Regional managers came to see me, and we were at city my living room here and my lounge that you would say perhaps. And I said, look, you know, we're we're gonna leave the old place, and we we're gonna do it on and run. We want you to come with us. So inside, right, ongoing. Yes. Yes. Yes. But outside, I'm playing it cool. Yeah. Well, hey, maybe maybe I'll do that then. But before I could say anything, my wife who is there, who told me to get a job or get out. I said, yes. He's available. He can start Monday. I'll get the survey. And that was that, really. So Crimson was born then. Now Crimson was a slightly different kettle of fish because he didn't grow as big. It was 24,000,000 quid, which In today's money would be I better be printed

Intro [00:14:39]:

40 35,

Mike Ames [00:14:40]:

maybe £1,000,000, which is about $45,000,000, I guess, revenues. But he made the same profit as the first one pretty much. The EBITDA was pretty much the same, so it's a much more profitable business It was a Microsoft Gold Partner as well, which is handy. And we did a mix of work, and I left there I became a sleeping partner. Does that does that translate? Yeah. Yeah. So I owned the shares, but it didn't do anything in the business from 2010. and then we sold it to a UK listed company called Harvey Nash in 2017, and they've kept that going, the brand, the Crimson, brand, you can Google it. The Crimson brand still exists, and it still edge weird because our gutters tell you this. So when you sell a business, you sign, like, all sorts of darkened threatening documents. NDAs and all sorts. Right? Can't say anything to anybody, and it's like, I'm really scared. So I said to my wife, don't say anything about anything. Nothing. Don't okay. And then the day after the sale, I wasn't there. I was in Spain at the time. We had an apartment in Spain. I was in they get this message from someone who I knew said, oh, so you sold the business great price too, Mike. How do you know that then? Oh, because Harvey and Ash had put it onto their website. All of it, it's still there. You can Google it right. All of it, how much we sold for the the fold is a nightmare, really. But Hey. You know, it was done. So I took the money and looked as happy as I could, I suppose.

Benjamin Mena [00:16:05]:

That is great. That is awesome. Yeah. No. That's I I absolutely love that story, and, you know, this time, after your second sale, did you actually enjoy it a little better? It did it had no effect on me. Because the money was nice. We sold it firm. The first business we sold for £24,000,000,

Mike Ames [00:16:20]:

which in at that time would probably have been about $35,000,000, I suppose. The second business was sold for 15,000,000 headline these are headline prices. Right? Mhmm. 15,000,000 quid, which would have been on

Intro [00:16:33]:

20, $22,000,000

Mike Ames [00:16:35]:

I suppose. So it didn't make a lot of difference really on a day to day basis, to me, specifically. I was glad to get rid of it. And weirdly, I think I'd be kept it.

Benjamin Mena [00:16:46]:

Now we were significantly more weirdly, but, you know, it's more to life than money isn't the Benjamin. There is. So I wanna ask you a few questions on this. So looking back at, like, you know, selling both of those companies,

Mike Ames [00:16:58]:

is there anything that you wish you knew before selling? your first company and your second company. Good. Yeah. Oh, man. Yeah. Loads of stuff. Weirdly, I just did I just did a webinar on this very thing, really. with a corporate finance company. They asked me the same questions. I think I tell you the big thing, the biggest thing which cost me several £1,000,000 or $7,000,000. off the sale price was. There's a perception that you don't need to think about your exit until you go to exit. And that's what we did in the first business. So My partner now went out for Christmas lunch, which we did every Christmas, the holiday period, and got pretty spannard, quite frankly. Right? And couldn't really speak properly. I think someone said, oh, man. You know, I've had enough of this. I really wanna get out to whoever it was, we can't remember. The other person said, oh, so please you said that because I wanted you know, we started the sound process there that this is the wrong thing to do. Right? because we no. The best time to start thinking about the exit from your business is the day you start your business. The 2nd best day is today. Right. That's what I would say. You cannot start too soon to prepare for that exit. Don't do. Oh, I'll blow the business and think about it. New new new new new new. No. Be utterly clear what you're building, what it looks like, and be conscious of what buyers find attractive and what they find less attractive, what's gonna pump up the price, and what's gonna suppress the price. And we were organized in a way. So KPMG did the sale for us. And the guy that ran it said, he said I've done some sketches. If you'd started this process 12 months ago, you'd have got an extra 3,000,000 quid for it. So that's my big advice. I wish I'd known that. I wished. I'd just be more aware that it exit as a shape. And and you can build that shape if you want to

Benjamin Mena [00:18:48]:

or hopefully just discovered by accident, which is what we try to do. Lost a lot of money because of it. Well, outside of preparing for the exit early, is there other things that recruitment business owners should be doing and thinking about? if they want to sell down the road.

Mike Ames [00:19:03]:

Sure. Yeah. Several things. And many of these things are important even if you don't sell. There's a thing in England called a Cash Go Lifestyle Business, which means that you grow the business to a certain size, and then you just make it more and more profitable. Whereas most scale for sale businesses by business you currently sell, you spend a lot of money on growth. Gross is expensive. constantly buying in people buying extra things and growing into it's very expensive, and it will affect your profitability. But if you reach a certain stage and then you freeze that growth or slow it right down, suddenly become massively profitable, particularly if you can get your team if you get a stable team. You know? Higher for show retained for dough as we say. So once you get your team to be stable so that you don't have comers and goers, Suddenly becomes massively profitable, hugely so. I mean, three times as much in some cases. I just finished a piece of work, which you can see the interview on my on my YouTube channel. And this this guy had reasonable profits anyway, but trebled them. Just by changing the the makeup of his team and making it less volatile in terms of comers and go. So I think that's really important. You've gotta decide whether you want to to scale for sale or become a cash cow lifestyle business, but the advice I'm gonna give you now works for both. So you don't have to worry too much about that. First thing is avoid becoming a yoyo company. It's not good. It's You you grow your shrink grow your shrink. It's not good for your profits. It certainly doesn't look good if somebody wants to buy you. It's like, well, You you can't control your growth. Can't you, really? You can't forecast very well. And then you can't meet those forecast because I'm sure you was gonna do that, but you ended up doing that. So So and the way to avoid becoming a yoyo company, 2 big things really. Firstly, I don't know whether this translates into an American. 360, do you have 360 recruiters? Yeah. Oh, yeah. Yep. Well, that that's dreadful. Still cleaner of 3 sixties, man, because, damn. You know, when they go, they're gonna take a big chunk of your revenue with you. You know that. And if you are sitting in your office and you're looking at your top 360 villa, almost certainly, you're looking at your future competition right there. Because at some point, they're gonna realize they could do it themselves like we all did, and they're gonna go, and they're gonna take a big chunk of revenue with you. So steer clear at 3 sixties. Go the layered route. Layered fulfillment is the way forward because it's it's you're actually losing a a function if somebody leaves. You're not losing a revenue stream. So that's the first thing. The second thing is to take real control of your client estate. They put them so the mix of clients that you have. Too many people don't think about that. They just do business with who they can. This is not good. You need to make sure that you've got a good mix of large clients because they're very efficient, but not too large that the margins suppressed. A good range of medium sized clients where there's potential for growth because potential purchasers like to see that. And a few small ones kicking around the edges that potentially grow as you work with them. But you do that on purpose, and that's really important because put those two things together, no 3 sixties, A good handle on your client to stay, and you won't be a yoyo company, says the ball. Number 2 is related to that. And it is You the way which you win clients, the way which you add clients to your client estate, and the way which you maintain those clients to look after them when you have them in there is crucial. What most recruitment companies do is rely on individuals to do that. So you got the new business person that goes on Windsor business, and you got the account manager looks after them. the business. Again, this is not good because a a scalable business doesn't have those kind of dependencies in it. So what you need to build It's a system. And I'll be very clear what I mean by that in a minute to show there's no doubts, but a system to win your high value new clients. and a system to manage the clients that you have. We call it Apex client care because if you do it properly, you can become the Apex supplier. It stood properly. Right? And that system is made up of processes. We're not overly bothered about processes because nobody sticks to them, not even you, and I don't either. Right? But you gotta have them. Right? Tools. Really keen on tools, man, because, hey, a tool like any tool, it simplifies things. It standardizes things and it speeds things up. So the more tools that we got I don't mean software, by the way. But the more tools that we have in the business, the better I like it. Dashboards tell you what the heck is going on in your business. and people. So you got those 4 things. That makes an ecosystem, and you can point that ecosystem for winning new clients. And you can point a different ecosystem made up of the same things at maintaining clients. When you do that and if you do it properly, That's the main reason that we went from 5 to 45,000,000 in 5 years because we had a system to win high value new clients and a system to account to them. Right? So, again, a buyer's really like that. When the Americans came to look at our business, they really liked the fact that we had those systems in place land business. They know they're buying hot air, but, actually, they're buying the system, not a person. Last thing is the management team. It's very important to lock in a stable management team. They don't have to be outstanding. because when you think about it, you know, the Again, in in American, in England, it's called a bell curve. It's statistical curve that goes like that. Right? Right. So the majority of recruiters are average. They have to be. So you have to build a business that generates extend outstanding results from average people because the majority of people you go to employ are gonna be average. Right? So you have to do that. And systems will do that well for you. But when it comes to the management team, it's going to be the same. You can have some good people and some average people. You know? So So what you must do is build an environment for them to be able to contribute to the business, manage it, take responsibility for various things, but without being fantastic at what they do and then lock them in. Do you have share option schemes or share ownership schemes? in the US where employees can own some of the shirts in their business. There are per there are programs where you could do that. Yeah. Okay. Yep. Well, in the first business, I paid out £3,000,000, probably 4 and a half to $5,000,000 to the stock. In the second business, it was a 1,000,000 quid, so I guess

Intro [00:25:26]:

1,600,000,

Mike Ames [00:25:27]:

1,700,000, I guess, to the staff. And that was one of the reasons we had a stable team. because everybody was waiting for the payout. Right? Who's gonna go and lose their shares, man? because if you leave, you can't take the shares with you. You have to sell them back to us for the teeny tiny amount that we paid for them in the first place. No one's gonna do that. So to have a stable tee, not going anywhere, You can trust them. They deliver. It works. And I think those three things in particular would be the 3 biggest pieces of advice that give anybody who wanted to scale up their business.

Benjamin Mena [00:26:00]:

I I love what you're talking about giving some sort of ownership to the people that, you know, are working with and growing their organization because 1, that creates incredible stickability. And 2, at least in the US, most people know somebody or they've personally helped build up somebody else's business. that got sold, and it was 0 equities. So they're like, alright. Yeah.

Mike Ames [00:26:20]:

But the other thing is, right, I mean, you're absolutely right. But the other thing is when When both sets of buyers came to look at us, and we said, well, look, the management team are tied in for the earlier period like we all. He changed the negotiations because had we not had that, they could have just left and probably would have done. But they were tied in for the same amount of time that we were. because they wouldn't have got their money otherwise. So it's a really cool thing to do for people, but it's a really cool thing as well when you come to to sell the business for the buyers to see that and think, oh, wow, yeah, I've got a stable team and I'm gonna have a stable team for the earnout period.

Benjamin Mena [00:26:56]:

For each for looking at both of these sales, is there any mistakes that you made?

Mike Ames [00:27:02]:

All plenty. I mean, we gonna go? Are we gonna push on through till tomorrow morning? Because I'm gonna need that much time, man.

Benjamin Mena [00:27:10]:

Yeah. Let's just go with top 2. Okay. Right.

Mike Ames [00:27:14]:

Well, I mean, lots of mistakes. I mean, I made that mistake, a trusted mistake where I thought the business was all about me. It isn't. You want the opposite. You want the business not to be about you. There's an American retailer called JCPenney. And I love that quote that he said, you know, the most seminal moment in my business careers. When I discovered I couldn't do it all myself. Yeah. Well, yeah, you can't. So the sooner that you learn to delegate, the sooner that you learn to bring in people, give them authority responsibility the more your business will grow. Right? So that was one mistake that I make, and I see that a lot. The second one is certainly around preparing for the business out too late. That's another one. And the other one is is as we talked about, if you said it goes too much reliance on individuals. You should rely on systems and processes and tools, and the people just use them as opposed to the person is the new business developer. Do you not see it? It's it's very prevalent to the Ozy Kingdom. Where oh, well, we we need some new clients. Well, why don't we hire a business developer? Let's get a business developer in. So that's the answer to all the questions when he isn't. A, because they're like Ken's teeth, they're incredibly rare. And b, if they go, You haven't got a business development function anymore. So I I think yeah. I mean, you build a business, be proud of the business that you build. Being for the long term, 3, 4, and 8 is 15 years. And at the end of that, you can be wealthy if you do the job properly. You scaled it properly. It's easy.

Benjamin Mena [00:28:42]:

Well, and then this kinda goes into, like, another question. Like, where do you even find a buyer for your recruiting business?

Mike Ames [00:28:48]:

One of the things that I would recommend people to do is to build a network of contact outside of people you want to sell to. So, obviously, you're gonna build a network around prospects that you could sell, you know, your services to and make them clients. Yeah. Of course you are. An intermediaries, perhaps you could introduce you to potential clients. Yep. There's a whole bunch of people out there that are neither of those, but are very useful people. And we started entering competitions So I can't remember the exact date. I think 1996 or something. We were the 27th fastest growing private company in the United Kingdom. Right? because we were in this competition that told us that I don't know whether we were or not, but that's what they said. Who knows? But because of that, we got to meet people. We got to meet people at KPMG and PWC. We got invited to things. So When we decided to sell? I said, well, we'll go and see the people that we know. So we went to see p w c. We went to see KPMG and ended up going with KPMG. And, of course, you you know, I would this is a this is a very important message now right for you guys. I would have sold that business for half as much as we actually sold it for and been happy with that. 10,000,000 quid. Definitely, you know, I've been well up for that. And we'd agreed this, me and my business partner. KTMG came within this massive figure. Why? Because they're in touch with the market. They know things as an average recruitment boss. Doesn't know. They've got contacts, so they found the original buyer was a company called Dimension Data in South Africa that wanted to move into Europe. and they found them. And then someone from KPMG New York must have said, oh, they must have some internal network or something they said, oh, we're looking for people wanting to buy UK Recruit companies anybody know anybody. We do. Yep. We do. Yeah. There's no way you could do that without a corporate financier. So you get the right advisers, and they will find the buyers, and they will manage that buying process for you because you're gonna need it.

Benjamin Mena [00:30:49]:

Wow. Is there anything else that you'd love to talk about with the process of building, scaling, and selling recruitment businesses before we move on? Yeah. One big thing as well. Recruiters

Mike Ames [00:31:00]:

tend to have a characteristic where they are very transactional. We call them end of the month warriors. So they've got their targets for the end of the month. So if they hit their targets, they get the commission payments, and they keep their job and everything. And And so they're very, very, very, very focused on the end of the month. They're transactional. And so their idea of business development is either ringing up potential clients and saying, have you got any vacancies? We call it vacancy scraping. Or they're ringing up potential clients and saying, Hey. You've got this great candidate. Are you interested? We call that specking. So they're they're basically going around ringing, hopefully, can reach somebody who just happened to observe vacancy. Prepared to give it to somebody they don't know or don't know very well, haven't got an existing agency they can give it to, and they're gonna give it to you. Good luck with that then, I think. It's because they're transactional. They need something to work on, and they're gonna work on it now. Now there's another kind of business development called strategic business development, which is effectively back in the day used to be called relationship selling. And, essentially, we're not interested in vacancies. It's like the conversations look. I'm not interested in getting the vacancy on this call. If you're gonna give me 1, that's fine, but that's not the point of it. In the UK, we have a term called the flavor of recruitment. and this is quite important as well. Do you like ice cream, Benjamin? I do. What's your favorite flavor? Is it some obscure Ben and Jerry's thing that I've never heard of? It's It's not that obscure. It's the cookie dough 1 is my favorite. Oh, man. Yeah. That's mine as well. Oh, yeah. And rum and raising, I like a lot, actually. Okay? Right? But all ice creams, if you look at it, are probably at 98% the same. You know, they got water and milk products and various fats in beer. What makes us choose one over the other is the 2% of flavorings, currings, and additives. That's it. 98% of the same. Well, recruitment is like that. 98% of it is four boxes on a whiteboard. Get vacancy, find candidates, qualify candidates make placement. Okay? So what we're looking to do when we talk to potential clients is talk about the 2 or 3% that's different. Our flavoring So when were relationships selling? What I'm doing to you, if you're a potential client, I'm saying to you, well, look. You know, the the point of this call is to explain what our flavor of treatment is. And if you like that flavor, it's to your taste, then we'll wait whether it's 3 weeks, 3 months, or 3 years. Doesn't make a difference. because I know an opportunity will come up, and I'll be there waiting to pounce on that opportunity. If you don't like the flavor of the the recruitment that we have. Fine. Just say so. We'll go our separate ways. You go and find somebody more suitable to you, and I'll go and find somebody. more suitable to me. Now that is not a conversation they have with many recruitment companies. I tell you that. Because they're too transactional. They want the work now. So as soon as you start talking about, no, I'm not interested. I just wanna know whether we got a good fit. Are we I might go to win a client, or am I gonna win a vacancy? because I want to win a client because I get lots of vacancies there. If I go vacancy scraping, I get a vacancy I work on it, then I gotta go vacancy scraping again. It's a world of difference. Now when I started in the eighties, pretty much most BD was relationship driven as it was called that strategic because it's called that. because we wanted to win clients, high value clients that would keep giving us vacancies, and that's how you make a lot of money. But it just drifted, I think, into this tactical transactional is a job. I've got this great candidate. Do you want them? And that's a mistake. So My advice and that's quite long winded, but it's such an important point is stop being so transactional. Stop being so transactional. Don't worry so much about the end of the month. worry about the end of the year or the end of next year. Only where the next really big valuable client is coming from. The what why you're never gonna get through to them on the telephone because they've gonna Would you say gatekeeper? Would that be a thing that you would say, yeah. Yep. So they've got a gatekeeper. They they don't listen to they don't answer their mobile phones. Someone listen to the messages for them. They don't they don't look at their emails. You're not gonna get to these people in the normal way. Right? So how are you gonna do it? Well, there are ways to do it, and strategic business development is one of them. That's a really important point. It's the most common bear trap, I think, that growing recruitment companies fall into. They are 2 transaction.

Benjamin Mena [00:35:22]:

I absolutely love that. Every single search firm owner, every single big biller that we've had on this podcast and I'm friends with. They talk about the a, b, and c clients. And I the scraping is typically the c c level clients. The a clients, the ones that bring in, they good chunks of revenue for the business or for that big biller are very relationship driven. Yep. And it takes time for, like, You know, maybe a c can become a b, but it takes time depth for something to become that a client. It goes,

Mike Ames [00:35:52]:

you've got to build confidence and trust and clarity So people understand why they should have you. You know, if you're not different to the to the agencies, they currently have their incumbent agencies, why would they choose you? Certainly not because you're the cheapest. I mean, we don't wanna get an out route. That's their life is disaster, doesn't it? A bankruptcy. So so that you have to build this flavor, god stress, how important it is to have a flavor of recruitment because most big billers sell themselves. It's what they do. Right? Again, Big billers tend to be very talented, but you can't grow a scalable business on talented people. You have to grow a scheduled business on average people as most of the people you're gonna employ are gonna be average. I mean, this will all come it's a little different. But as you get bigger, if that's the way it is. So You can't build a business depending on big billers because what happens if they leave? So -- We're crazy, doc. Exactly. You're you're, you know, you're you're the the shizzle hits the stick. So so you you really need to think about how you're going to use tools particularly tools and processes and and the people that you do have to achieve these great results even if you're not a big pillar. So get away from selling yourself and start selling your flavor of recruitment because people like it, and they like it a lot. Awesome.

Benjamin Mena [00:37:12]:

Well, we're gonna jump into what we call all the quick fire section afterwards. So, you know, a little bit gonna give you a question, explain your answer. So When it comes to a new recruiter starting in the industry in 2023, what advice would you give them for their entire career? Well, the first one would walk back to don't be transactional all the time.

Mike Ames [00:37:32]:

That, you know, don't do that. Begin to build a network. Networking in the UK has got the it's turned from a noun to a verb to go networking. and it just means going to places and trying to do a bit of business with people. No. A network is a group of people who are willing and able to help you in your personal and professional life. That is the definition of a network. Networking is building and maintaining that group of people. So as a young recruiter, I would begin to build my network because that's how I started back in the eighties up what everyone did in those days. But that network will do the work for you. Right? Or you can just be transactional all the time. We work very hard until you burn out when you're about 40, your choice. Alright. So

Benjamin Mena [00:38:18]:

The next question, I'm asking it for senior recruiters and not search firm owners. I mean, we also have for firm owners. But for a experienced recruiter, it's 2023. What things should they be doing for continued success?

Mike Ames [00:38:31]:

Well, depends. If they want to continually boost their revenues, they've got to build a team because there comes a point where a person can only do so much on their own and have a life. If you want a good lifestyle, then you have to get other people to do the work. So to do that, you must learn to delegate. I know it sounds easy. But you know, in my experience, the worst managers are the best bidders. They They don't get management at all. Why why aren't you like me? Why don't you work as hard as me? Why aren't you as talented as me? Why can't you just get back on that phone and get that that piece of work. You know, why can't you persuade these candidates to do this piece of work? Because they can't, because they're average. Yeah. What what's wrong with you? Why can't you understand this? So you must learn to get the most out of people, and that's a completely different skill set that a lot of Serious builders don't have. But if you're prepared to invest in yourself and work hard at it, then you can learn to manage and lead. And when you do that, your earnings are not limited. They are completely unlimited. You can earn as much as you want. If you don't want to go down that route. Then my viewpoint is to Niche very much so. Niche, I think it's pronounced in America. It's to Niche, and make sure that the niche that you've got is big enough for you to make lots of money and that you can charge decent fees for what you do and then coupled with a decent network. You again, you can get the network to do the work for you, and it works really well in a niche because, you know, I don't know whether you have preferred supply or panels, whatever they would be called. And quite often, there's a set of financial so the fees are set. The margins are set, and they're quite low normally if it's a high volume business. If you've got a niche, then they don't apply to you. Because if you want these people well, This is what you have to pay. If you don't like him, I'll just go down the road. And by the way, when I go down the road, I'm gonna get all your people that've got the same skills. I'm gonna take them with me. You know? So not that I would ever say that, but I used to let them know that that's what I would do. And so we we were on we we always had niches in our business, lots of them. Very high profits. very easy to do business. And, of course, the business comes to you because you be get you become known as the go to guy or the go to girl,

Benjamin Mena [00:40:39]:

for that particular niche, and it's easier then. But you gotta work at it, man. You know, he he just doesn't come to you. Yep. Alright, man. My next question, I'm sure you've I kinda covered your answer already, but I wanna reask it for the quick fire section.

Mike Ames [00:40:51]:

As a search firm owner in 2023, what are some of the things that they should be doing to be successful? Well, yes. All of the above. All of the above. And I think the nature thing is is kind of a a a key element to that, I I guess. But I I think I'm gonna hop back to carefully choosing your clients because search firms have a tendency to pick clients where they can only wait make one placement. You know, if it's a c level, a c suite. So the, you know, CIO CEO, whatever. They already have 1, so they make a place and to move on really. And that's blooming hard work, I think so. You need to think about how you can get repeatable business one way is to go down the interim route, to have interims on their senior level interims, because you can reuse the interims. You found them in the first place, which is expensive, but you can reuse them. You can place them for one place tonight. So I've seen that work really well. And the other thing is keep putting your fees up until you lose 20% of your business because you're too expensive. If you win everything, it's too cheap. That is great advice. 20% if you lose. More than 20% gotta bring your prices down a little bit or push your value up. You know, which brings me to the last piece of advice. I think all recruiters should do to restoration of what I said earlier, but create your flavor, create your product, and sell your product not yourself. Awesome.

Benjamin Mena [00:42:13]:

Has there been a book that has had a huge impact on your career? Well, several. I'll read a lot of books.

Mike Ames [00:42:20]:

We have a a an app here called Blinkist. Don't know if you come across that. Mhmm. Yeah. So I'll read a lot of Blinkist books. And then if I like the book, I actually buy the proper book. If for those that don't know Blinkist, you can read a book in 20 minutes solution to it, the summary of the book. But then I go and buy the real book. I like Malcolm Gladwell, like Blink and outliers, particularly like outliers because that's why people are successful and others aren't successful. We like that. Terms of stuff by set coding like purple care, man. That's I tell you all that had the biggest impact on me. When I was a student, at the 3rd year of my degree, I went to work in industry. and then came back to do the 4th year to to do my finals. And I went to work at a company, and I really got along with my boss there. And one day, he gave me a book, so it'd be 20, I suppose. He said, I think you like this, Michael, and it was a book called Booked the organization by Robert Townsend. And I think he'd started not started, but he built Hertz when to and what he'd written in the 19 seventies. He'd written this book where at the end of his career, he just wrote down everything that he knew. Nobody was doing it in those days. This was before Stephen Covey all those speak. He just wrote down these prescriptions. If you wanna be successful, do this, and do that, do the other. I mean, I didn't know anything about business. certainly didn't know anything about rental cars, but I loved that book. I loved the procedural nature of it, and they will just do this then. And how can that be? And I I I have to give the book back to him. Years later. Years later. We have a small house on the Welsh coast on the Irish. I didn't really tell where we got the house. There's a bookstore. Don't go in there very often, but I was in there And what did I see? This was only about 3, 4 years ago. I saw an old copy because he's had a printout of the organization by Robert Townsend, and I bought it for about 10 quid. Fantastic. I mean, all the stuff that's in there is no longer relevant because the world has moved on, but, man, that book changed my thinking from that to that.

Benjamin Mena [00:44:15]:

I I love that. So next question is, what do you think about is gonna happen with the future of recruitment and AI and recruitment?

Mike Ames [00:44:24]:

That's a really good question, isn't it? I think the commodity recruitment, the lower end, is under threat. I think as we get more and more plug ins for chat GBT, It's it's capability grows. Right? I don't know what version you use. We were the paid paid version, so it costs us 20 quid a month. When I have 30 bucks a month to week. And so we can do all sorts of things that you can't do with the the free version, and you can just see the possibilities. I really wish I was 30 again. Honestly, I mean, the things that you can do with it, so we started experimenting for our clients. So we we spend a lot of about a third of our time in doing research and development, various new tools and techniques link. And the guy that's doing this, Pete, is just mad on it. The things that he can do, and you can just see what's gonna happen. And as soon as the machine do you know what the turing test is? Have you come across a turing test? Yep. Yeah. Right. So they reckon that that we have Computers that could pass a cheer in test ages go. Not true, really. Not really. As soon as it properly passes a cheer in testing, in other words, You can have an actual conversation like we are now with the machine, and you can't tell whether it's a human or not. As soon as we get to that state, where you can kiss goodbye to most lower level commodity based recruiters because the machine will do it. So I think it's time to move up the ladder, in my opinion, start shifting away from that commodity space, that volume because it's really gonna go. And and trees are gonna drop through the floor because of it, I think.

Benjamin Mena [00:45:51]:

And it's gonna happen fast.

Mike Ames [00:45:53]:

I think so. Yeah. I mean, relatively nuclear on but not not not a decade or anything. I think 3 or 4 years perhaps. Yeah. So what do you think is one of the things that has had a huge impact

Benjamin Mena [00:46:05]:

on your personal successor has contributed to your personal success. Oh, that's easy.

Mike Ames [00:46:10]:

Model wide. 100%. She was a housewife, so she stopped work when my son was born in 1985, and she she didn't have a, like, a paid job since then. And in the early years when I thought it was all about me, before I had my mini nervous breakdown, and we hired Anne Marie Hanlog to come and sort us out. In those days, if you'd said, oh, well, you know, if your wife wasn't there, could you do it on your own? I just said, yeah. Yeah. Easy. It's me that's doing this right. could not have been further from the truth. I have only been as successful as I am because of her. Because of the support that she's given me, to look after the house and the children. We have 3 children. She looked after all of those things. She never worked so. She could. Of the of the unerring ability that she can just cut through the b s. And so why are you doing that then? Oh, yeah. Don't know why I'm doing that. And those times, I have massive self doubt. at times, like, huge self doubt. Right? And she's the one that says I'll pull yourself together. Get it quick because you can do this. How often can you be? What's the worst I can happen? Come on. You can do this. Right? And it's her. She did that. I could not have been as successful without her. I love that. And that kinda goes into my next question. Like,

Benjamin Mena [00:47:23]:

everything that you know now, if you can go back and just talk to yourself at the beginning of your recruitment career. What advice would you give yourself?

Mike Ames [00:47:30]:

Don't make as many sacrifices as I did make. that cost my family, my so in the 1st 3 years, you know, that 34 and 8. Right? The 1st 3 years, you have to give the company everything it wants. It's like a spoiled child. Right? You have to give it everything. Otherwise, it's gonna not gonna work. But that's it. When you're in the 4th years, what happens is that you're weaning the child away from that now. It's not about you anymore. It's about me and the family. I kept that going too long, and I went too deeply with it. I remember once my wife was ill, she got a sickness and diarrhea bug, and the children had got it as well. And I had a business meeting planned, so I said I've gotta go to this, no left. What kind of monster does that? What kind of monster? does that. I did it because I was up it was during that mad period when I after Mike had died, and I thought we'd really go bankrupt. whenever the business wanted, I gave it, but I gave it too much and I gave it that that that extra stuff that it needed for too long. So don't make that sacrifice. She's got a new signer idea. Family 1st.

Benjamin Mena [00:48:36]:

Family 1st. I love that. Now before we let you go, is there anything else that You'd love to share with the listeners? Well, you know,

Mike Ames [00:48:43]:

it's it's an interesting thing when you come on these shows. I did quite a few of them. I think there's one thing that I I think that I what piece of advice that I would give. And that is that people don't work on their business enough. We work in their business to make money that work on their business enough. So what I mean when I say on their business, I mean, proper planning and strategy. I mean, investing in yourself taking courses, having a coach, going to a seminar, spending a day reading books that you would ordinarily read, go and meet some people with just interesting people. change the way which you think. They're way too transactional or way too busy. We call it purple time. So books and purple time every month, 3 hours a month. Just put it in your diary. Repeat however you think it's best suited. And without fail, you do something that works on your business during that period. Something along the lines that I've just said because that's how your business will change and grow. We have a a phrase, which I think is an American phrase, actually. When you're up to your arcing other gators, it's difficult to remember that you were there to drain the swamp. And it means, you know, the alligators and things are happening on day to day basis. Right, man? So you got your inbox. Oh, look at the oh, potential work there, and you got the phone ringing. Oh, Samsung's not turned up then. Alright then. Got someone coming in and saying, I'm handing me notices like these are alligators. They keep you in the here and there. The big picture is to give is to build a business that gives you the lifestyle, which is a combination of free money and free time. Freedom so that when you go to work, you just do the things you're really good at. and wealth. So at some point, you can say, you know what? I've had enough. I'm believing I'm gonna retire. That's draining the swamp. But we don't get to think about that because the alligators hold us in. So having some purple time every month while we work on our business, and we have the plan, and we develop the plan, and we learn, and we share. who may experiment with things, that's the thing that creates that

Benjamin Mena [00:50:40]:

that business that you want. I absolutely love that. Awesome.

Mike Ames [00:50:44]:

So thank Mike, thank you so much for coming on the podcast. In the show notes, I will have Mike's LinkedIn profile. I'll have Mike's company. And real quick, Mike, can you talk about flare before I let you go? Yeah. I mean, the thing that is relevant to an Americans, we have people in North America, and in Australia, another English speaking parts of the world, but take out online stuff, its cheapest chips, yet there's no minimum sign up period. We've got tremendous amounts of content. Videos, how to guides, all the stuff that helped me build these businesses we've been committing to an online portal, and you can just you can have it. But The starting point is always the same. I do a show on LinkedIn. You can find it on YouTube, the recording of it. Or if you go to my LinkedIn poster 12:15 UK time. On a Thursday, you'll see it. Maybe you could put the YouTube link into the the notes for this. I don't know. Oh, well. Right? That's the start of because if you like what I'm talking about there, if you like that stuff. We don't sell it, stuff like that. Right? If you like that, then you're gonna like the online content for sure. Awesome, Matt. And I'll have it in the show notes so you could definitely check that out. Mike, thank you. Thank you so much for coming to the podcast. This was an awesome talk, the the awesome interview. And I know it's gonna help a few people level up their businesses,

Benjamin Mena [00:51:56]:

set it up to be successfully sale, and also for recruiters really just pushing them and helping them level up

Mike Ames [00:52:03]:

Well, thank you, and I I hope he does the hope. At least, it helps people just move along a little more and realize that you don't have to take it that seriously. It's only works, isn't it?

Benjamin Mena [00:52:13]:

Sounds good. Thank you, Mike, and for the listeners until next time. Thanks for listening. To this episode of the elite recruiter podcast,

Intro [00:52:19]:

with Benjamin Mena. If you enjoyed, hit subscribe and leave a rating.