Recently, I participated in a forum with other business owners offering “wisdom from the trenches” to a group of aspiring entrepreneurs. One of the questions posed to the panel was something to the effect of, “what should business leaders focus their attention on?” A string of cliches followed–“Protect your Margins,” “Prioritize the Customer Experience,” or one that almost made me spit out my water, “Listen to the Market…she speaks!” Cue the eye roll.

Just a few weekends ago on a father/son camping trip with a group of buddies, most of whom are running businesses, a similar topic came up. One of the guys in the group lamented that he can’t figure out where to focus his energy on the business. He had a long list of issues that needed to be addressed or overhauled, projects that needed to be completed or started, and people challenges coming out of his ears. Another had similar issues, from cash flow to HR, and was frustrated that a new platform they had implemented wasn’t producing the traction he had hoped.

My response to these guys and my answer to the question at the forum were largely the same.

When my friend first approached me about jumping into the recruiting world with him, I balked. At the time, I worked for a large company and was moving quickly up the ranks. Any experiences I had had with recruiters were mostly negative. Headhunters? They’re like real estate agents, only worse! Nearly four years later, as the primary owner of a recruiting firm, I’d have to say my original opinions about the industry are still the same.

My wife encouraged me to take a closer look at what my friend was proposing. It didn’t take long to realize he had identified a market inefficiency and needed someone to drive the opportunity. What I didn’t know at the time is that usually, when a company hires a headhunter to help them fill a position, they end up paying out a fee between 20-30% of the new hires’ annual first-year salary. Ouch. This is closer to 40% for c-suite placements. Yikes. I remember the first time I sold a home and realized we would be paying out 6% in commissions to realtors for opening a few doors and taking some pictures. I felt sick. There is a reason that companies like Trelora, Redfin, and others are charging 1%. There is a market inefficiency.