Dreaming about starting your own business or becoming an entrepreneur? So are 59% of working adults in the US, according to a Justworks report.
As a people pro, you might have your sights set on joining the nation’s nearly 50,000 HR consultancies or 12,000 employment and recruiting agencies. Both of these sectors experienced growth in recent years, with the number of businesses rising 0.2% and 1.3% respectively YOY between 2018 and 2023, according to IBISWorld.
Like most aspiring business owners, though, questions around how to start and run a business may be holding you back. That’s why we spoke with Karan Ferrell-Rhodes, founder of consulting firm Shockingly Different Leadership, and Laura Mazzullo, founder of recruiting firm East Side Staffing.
They shared with HR Brew their advice for people pros starting up.
Nail down the basics. Ferrell-Rhodes founded her HR consultancy 15 years ago. At the time, she was a one-woman operation focused on leadership development, but two years in, she told HR Brew, clients started asking for help with larger initiatives, like mergers and acquisitions and change management.
“I will fully admit it’s not easy, because it is a mind shift,” she said. “When you come from corporate, you have a whole infrastructure that is at your beck and call that can help you do things, but when you’re founding your own firm, the buck stops with you.”
She started hiring employees and contracting consultants, and eventually scaled her business to 32 part- and full-time employees and a network of over 300 consultants.
But that didn’t happen overnight, and her advice to anyone looking to start their own business is to go slow. She suggested researching the mechanics of running a business and consulting experts, especially in specialized areas like compliance.
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“There’s so many people that leave the traditional workplace, they hang a shingle, and then think it’s going to be all gravy at that point, but they haven’t put processes or infrastructure in place to actually do business,” she said.
Infrastructure may include obtaining business insurance, setting up legal contracts, or completing onboarding at other companies to become a vendor or supplier. While “not exciting,” she said, “they are critical to building a foundation.”
Confidence from within. When Mazzullo started her New York-based recruiting firm 11 years ago, she told HR Brew that she was confident in the expertise she developed in her decade of experience as a recruiter. And the market confirmed there was a need for her expertise.
“At that time, at least in New York, there really weren’t any other firms that were boutique in nature and solely focused on the HR community,” she said, so she felt she had a competitive advantage.
Mazzullo advised that potential entrepreneurs be critical of the circumstances surrounding starting up, but not confidence and abilities.
“Your internal critic could do a whole dance on, ‘You’re going to fail. Your competitors are going to be better...You’re going to struggle. People aren’t going to choose you,’” she said. “You can go down that critical internal dialogue, and if you [do], it’s very hard to launch a business.”
Strength and resilience are necessary to start a business, she added. “I would say wait to launch a business until you feel you have that inner strength, because the external factors could break you down very easily if you don’t feel ready to weather those storms.”