The Resilient Recruiter How to Build an Executive Search Firm that Can Be Sold to a Successor, with Stephan Aschenbrenner, Ep #180
Is it possible to exit a small, boutique search practice where the owner is one of the primary billers? My special guest, Stephan Aschenbrenner, has found a way of making it possible.
Stephan is the CEO of EO Executives, a franchise network with offices throughout Europe. In 2011, he joined EO executives to build out their German territory. And after four years, they became one of Germany's top 50 executive search and selection firms. Stefan became the managing director of EO International Group in 2016 and became the owner in 2019.
Stephan’s goal is to help executive search professionals to build and scale a partner-led executive search firm and achieve annual billings of 2-4 million. The idea is to build a sustainable business that could be sold to a successor with a significant equity value.
Episode Outline and Highlights
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[03:52] Stephan discusses the challenges and solutions to sustainably scale small boutique executive search firms.
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[10:40] How Stephan’s retail background relates to growing recruitment businesses through partnership and franchising.
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[14:05] Helping franchise partners to grow - Stephan shares the tools they provide.
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[18:50] Leverage Level - enabling partners to maximize their time and productivity by providing assistants.
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[21:45] Team Level - spreading business relationships within the partner’s team.
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[26:30] Developing others - billing while building teams.
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[33:50] Fostering a culture of training and coaching.
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[43:33] Finding and retaining the right partners in a franchise setup.
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[49:50] Building the equity value of a search firm.
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[54:43] Why 12 is the magic number?
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[57:32] Leveraging technology platforms.
Enhancing Small Boutique Firms' Growth through the Power of Franchising
Scaling an executive search firm is very challenging. Stephan described from his own experience how it can be disappointing to invest time and an immense amount of funding to train and onboard new consultants who will end up leaving your business.
As Stephan shared, “You're always putting the money from the strong builders and investing in the newcomers. And then the other thing is that's what we learned in the UK especially…the better the people are, the sooner they just go for a higher paycheck. So it always was a kind of high turnover. We spent so much time training the people and the people said, ‘thank you for the training. This was probably the best training I ever got. But sorry, now I go to London, for a bigger paycheck.’ So it was a constant turnover in the company.”
I think this is the experience for many owners who want to grow - the frustration and difficulty can cause many to give up pursuing their dreams of building their businesses. In our coaching program called Apex, we have dedicated business owners who are looking to scale their recruitment business between 5-25 people. We know the difficulty of achieving a strong successful company - but it is absolutely doable!
Stephan shared another solution - that is through a partner-led franchise business model. This business model is where they find committed recruitment entrepreneurs who are senior executives themselves, train them, and give them the processes to run a successful search firm.
The value they provide, as discussed by Stephan throughout this episode is helping recruitment-business owners to:
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Grow their team without the risk of investing in expensive fee earners.
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Grow their team while remaining to be a strong fee earner at the same time.
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Help them attract high-fee earners who will stay with them for 5-10 years.
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Have additional revenue streams.
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Prepare the business for succession planning.
Why Business Leaders Should Embrace Coaching
Stephan and I discussed the value of business owners and leaders embracing coaching. That is, being coachable and becoming coaches themselves. Stephan says, “Coaching is one of our favorite themes in EO… I am a certified business coach now… We are now training all of our leaders in this coaching habit as well.”
If you are a recruitment business owner, I most certainly believe that coaching is a top priority. It is a skill that can be developed and improved, and can certainly be a game–changer for your business.
Leveraging Technology to Support Partners
On top of training, EO also provides technology platforms to its partners. Stephan shared about Executive Intro (their white label version of i-intro), a technology platform that allows their partners to differentiate their service and win retained searches. They also provide CRM and ATS platforms for all their partners, allowing them and all their partners to work on the same systems and leverage each other’s networks to make more placements.
Our Sponsors
This podcast is proudly sponsored by i-intro and Recruitment Entrepreneur.
i-intro® is an end-to-end retained recruitment platform. Their technology and methodology allow recruiters to differentiate themselves from the competition, win more retained business, bigger fees, and increase their billings. Their software combined with world-class training enables you to transition from transactional, contingency recruiter to consultative, retained recruiter. Instead of being perceived as a “me too” vendor, you’ll be positioned as a “me only” solutions provider. Be sure to mention Mark Whitby or The Resilient Recruiter. Book your free, no-obligation consultation here: https://recruitmentcoach.com/retained
Recruitment Entrepreneur is the world’s leading Private Equity firm specializing in the international recruitment industry. If you’ve dreamed of starting, scaling, and selling your recruitment business, this is your chance. James Caan and his team at Recruitment Entrepreneur are actively seeking ambitious recruiters in who they can invest. They provide everything you need to grow a successful recruitment business including funding, financial expertise, coaching and mentoring, operational strategy, back-office support, marketing, and talent attraction solutions. Be sure to mention Mark Whitby or The Resilient Recruiter. Start a conversation here: https://recruitmentcoach.com/vc
Stephan Aschenbrenner Bio and Contact Info
Stephan used to work in large international companies as an employed executive. He loved all the benefits and the “security” such firms could provide him. Then the dot-com bubble burst, the world went into recession, and he and his wife found themselves unemployed at the same time.
This was the time he decided to change his career and Stephan started his first company. In the following 10 years, Stephan and his team helped more than 2.000 entrepreneurs to find their right business idea and actually get started. During the financial crisis of 2009 he started EO Executives in Germany and within 4 years had built it into one of the TOP 50 Executive Search Firms in Germany.
In 2016 he became CEO of EO International and in 2019 he became the owner of the EO Group. Stephan is a certified business coach and during the Covid Crisis, he became a partner in the biggest business coaching network worldwide.
People and Resources Mentioned
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i-intro website link
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