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How Much Do Recruiters Know About Business Structure?

by | Mar 28, 2011 | Recruiter Training, Top Echelon Blog

We’re going to wrap up our blog series about business structure by asking this question: exactly how much do recruiters know about business structure?  Before we delve into that question, though, let’s quickly review what we’ve done to this point.  Below are the titles of the first two posts in this series, along with a link to each individual blog post:

“The Most Popular Business Structure for Recruiters is…”

“Taxes—the Top Concern When Recruiters Structure Their Business”

As most of you know by this point, we recently conducted a survey of recruiting firm owners from all across the country.  As part of that survey, we asked them the following question:

How well do you understand the positives and negatives for each of the different business structures listed in question #1?

The different business structures that we listed are below:

  1. Sole Proprietorship
  2. Partnership
  3. Limited Liability Company (LLC)
  4. C Corporation
  5. S Corporation

We provided four answers to the question above.  Those answers, along with the percentage of recruiters that chose each answer, are listed below:

  • Great understanding—12.8%
  • Good understanding—55.9%
  • I somewhat understand—29.8%
  • I have no idea—1.5%

As you can see, the majority of recruiting firm owners who responded to the survey has a firm grasp of the different types of business structures, including the structure that currently applies to their firm.  Only a very small percentage had “no idea” when it came to business structure.  That being said, how do recruiters generally acquire their information about business structure and what factors into their decision-making process?

By and large, recruiters rely upon trusted advisors such as their accountant or attorney when ultimately choosing the business structure for their firm (at least according to the comments that recruiters included with their survey answers).  Below are two additional comments provided by recruiters:

  • “I’ve been in all of them and would suggest being extremely cautious about entering into any partnerships.”
  • “When I went into business 20+ years ago, the SP seemed like the way to go.  I really haven’t revisited the issue since then.”

What about YOU?  How much do you know about business structure?  Would you like to know more?  If so, what would you like to know?

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