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
- [03:52] Stephan discusses the challenges and solutions to sustainably scale small boutique executive search firms.
- [10:40] How Stephan’s retail background relates to growing recruitment businesses through partnership and franchising.
- [14:05] Helping franchise partners to grow – Stephan shares the tools they provide.
- [18:50] Leverage Level – enabling partners to maximize their time and productivity by providing assistants.
- [21:45] Team Level – spreading business relationships within the partner’s team.
- [26:30] Developing others – billing while building teams.
- [33:50] Fostering a culture of training and coaching.
- [43:33] Finding and retaining the right partners in a franchise setup.
- [49:50] Building the equity value of a search firm.
- [54:43] Why 12 is the magic number?
- [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:
- Grow their team without the risk of investing in expensive fee earners.
- Grow their team while remaining to be a strong fee earner at the same time.
- Help them attract high-fee earners who will stay with them for 5-10 years.
- Have additional revenue streams.
- 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.
Related Podcast You Might Enjoy
- TRR#91 How to Start, Scale, and Sell Your Recruitment Business in 7 Years, with Karla Reffold
- TRR#123 How a Recruitment Business Launched, Scaled, and Sold for $12,000,000 in 5 Years, with James Caan
- TRR#111 Enjoy Exponential Growth: How to Scale and Sell a Recruitment Firm for €32 million, with Tom Hopkinson
