If you read my previous posts, you know that I’m a big fan of sidehustles. Little projects beside your 9to5 jobs can quickly turn into income generating machines and help you reach financial independence a lot quicker than you might think.
Personal finance blogges write a lot about their savings rate and it even turned into a competition: who can save more from his salary?
While saving as much as you can, being frugal and spending your money wisely are generally very good ideas and also important for the general mindset that helps you reach FI, I think it’s more important to look for ways to increase your income.
If you manage to increase your income and, at the same time decrease your spending, you can only win this game and say bye-bye to your boss. Very soon. Forever.
While there are only limited ways to cut your spending, there are virtually unlimited ways how you can make more money.
In this post, I’d like to draw your attention on headhunting.
Have you ever wondered how much a headhunter charges your boss to find a new employee?
I was curious. So a few years ago I googled “heathunter” in my city, took the phone and called them. I told them my (virtual) company is looking for an IT guy. I geve him some mor details about the job (which I made up of course) and asked him how much he would charge to find somebody. His answer was 20%. Well. I was confused, since I had no Idea what he means with that. So I asked: “20% of what?” :). He replied: “20% of the first year gross salary.
Now…this was one of the biggest eye-opener moments of my life. I stood there speechless for a few moments while I ran the numbers in my head:
A programmer earns about, let’s say 40.000€ a year (good ones earn twice as much, at least, I know). 20% of that ist 8000€ that the emplyer pays the headhunter as a one-off price for the services. Wow.
Then I wrapped up the call quickly, hang up and just sat there in my chair for minutes thinking about what do I have to do to make my new sidehustle idea actually work.
To keep a very long story short: I figured out whether and how am I legally allowed to do this, it took some time, I did all the paperwork, it took hundreds of calls to find customers, write some job postings etc…It worked. I acually started bringing job seekers and companies together. All that beside my 9to5job!
I only charged 10%. Was enough and I was a lot cheaper than established companies. Plus I did more: I also helped with paperwork and finding appartments for the people.
I made nice money with it, but more importantly I learn a hell of a lot through the whole process.
What was my investment?
At the beginning: absolutely nothing. Nothing apart from my free time. Later I tried to facilitate things by buying train and plane tickets for job seekers to come to the interviews. That’s all. Whenever I hear that you need money to start a business I have to smile. You don’t! But you need time! And the time you sit watching TV or playing some stupid video games night by night is enough to start such a sidehustle…
Why did I stop it?
While most of the times everything went well, sometimes I had to make first hand experience with really unreliable jobseekers. Some experiences were simply disappointing and I lost the passion to keep going. The 2009-2010 recession helped that process since companies became very picky or didn’t employ at all. During that time I’ve found passion in other things so this sidehustle came to an end.
Can YOU do it?
That question you have to answer, but what I can tell you is that, despite many major headhunters out there, individuals have enough room in the market and can make nice money here. Of course, you have to like it. It’s not for everybody.
If you want to try, ask around what you need to do in order to start this business. If you’re allready self employed, you probably only need to change your company registration (Gewerbeummeldung). I don’t knwow the rules now. These things might change and they of course change from country to country.
Who should you headhunt?
There’s a big chance you allready have a profession, a university degree in something or a job. Look around. What sort of jobs do you know about. If you have to write a job description, what position would that be for? Do an area you allready know about.
The other way would be to look around and see what sort of people are needed in the job market?
In Germany tens of thousands of people are needed in these areas (just to mention few): carering (Pfleger), doctors, nurses, metal industry, constructions, drivers, programming and generally IT, engineers and many more.
YOU have to go down the road
There is nobody out there who will implant knowledge, experiences or degrees in your mind. You have to do the research, you have to implement the ideas.
What you do in your free time is a hell of a lot more likely to make you financially free. Not your 9to5 job…
So what do YOU do every night? Don’t tell me you’re tired 🙂