BRW Fast 100 - 2011
Started: In 2004, at the age of 20 and still studying a Bachelor of Science at university in Queensland, Andrew Northcott decided to get into the contract labour business. Having just $800 behind him and no labourers on his books, he started by contracting himself out to small clients who needed short-term help.
Edge: Northcott’s “blue collar” labour business has grown considerably since its humble beginnings and accounts for about three-quarters of annual revenue. Most of the remainder comes from LSA Recruitment, which was set-up in 2007 to service the professional “white collar” recruitment market. The business evolved from an early attempt to provide staff with flexibility to work from home into a franchise operation. LSA Recruitment has 12 business partners (franchisees) and Northcott has plans to grow this number to 114. The franchise model is unique in the recruitment industry and Northcott believes that it provides him with a substantial advantage over his competitors. Business partners pay $22,000 for exclusive rights to a territory and they get the benefit of LSA Recruitment’s Systems, network and a $1000 income guarantee for each of the first 12 weeks. LSA takes between 5 per cent and 20 per cent of each business partner’s revenue depending on the size of their billings. Business partners typically have background in the recruiting industry and are attracted by the opportunity to work for themselves. “We help ensure a smooth transition from PAYG employee to business owner,” Northcott says.
Result: LSA Recruitment Group’s revenue grew to $22.8 million in the year to June 30, from $9.4 million the previous year.
Darkest day: Starting a professional recruiting business just days before the global financial crisis meant LSA Recruitment had some tough challenges in its infancy. But Northcott says this proved to be a blessing as it ensured that costs were kept down. “Our cost of sale would be among the best in the industry,” he says.
Smartest move: The decision to embrace technology has proven to be one his best, according to Northcott. “If you look across the industry, there are probably only four or five software packages that can support recruiting businesses,” he says. By developing his own, Northcott says he has been able to reduce the costs involved in sourcing clients, efficiently manage the recruitment process and service rural areas. The technology platform is also used to share information between business partners and tender collectively on their behalf.