What You Need To Know When Selling Your Staffing Firm

Nowadays, owners often put up their startups with a vision of someday being acquired by a large conglomerate. As the staffing industry continues to grow, private equity groups and established firms are keen on investing in companies with high-growth potential and a foreseeable strategic position. While seeing what was once just a vision become a reality and come to life is very fulfilling, selling your company is one way to achieve further growth. It’s also a very lucrative way to cash in on all your hard work. Acquirers all have various reasons to buy, and it’s essential that your company fits the bill. Here are a few things that every staffing owner should take to heart when considering to sell:

A Great Team Speaks of a Great Leader

 Staffing and recruiting firms thrive on the talent they provide their clients. Naturally, acquirers will examine your management team and the database of professionals available for placement. Exceptional managers and executives are difficult to come by, so when you have them, work hard to retain them because they are a key factor to potential acquirers. Keep your internal talent pool happy and motivated as they will be a major component to your success during negotiations.

 Cleaning Up Shop before going to Market

 Accurate numbers are of utmost importance when selling. Having your books in order strongly indicates that you have a well-run business. The contrary would affect the valuation of your firm. During due diligence, when potential buyers discover anything that you may have missed or may have misrepresented, they can use it as leverage to reduce the value of your business and it may be detrimental to the buyer’s interest to purchase. Clean and healthy financials are a vital success factor in every deal. Performing your own due diligence even before placing your company out on the market will save time and a higher probability that a potential sale will run smoothly and swiftly.

PREMIUM CONTENT: Largest IT Staffing Firms in the United States: 2018 Update

Healthy Profits Command Better Multiples

Show that your firm has climbing revenue projections for the coming years, and make certain that you are able to prove yearly incline through your historical financials. Annual growth rates pique every prospect’s interest and your profitability speaks of everything in a buyer’s eyes. How elevated your profits are will ultimately determine the value of your company.

Your Geographic Foothold Signifies Expanding Market Share

Instead of starting from scratch in a new area or building up a new list of clientele, large companies usually decide to acquire another firm in the area that they want to expand to. Companies seeking to tap into other places often merge with other firms with a deeper market penetration in certain areas. Mergers can give the buyer a whole new market share without having to do all the work themselves, as the business is already in place with an entire team already trained for it. Whether it’s a merger or acquisition that strategically benefits off of location, it gives both companies a wider distribution, reach and market share basically overnight.

Advanced Processes and Proprietary Technology Speaks of Innovation and Agility

 All companies need to stay on top of technological advancements if they want to stay relevant. Buying a staffing firm with unique technology can maintain or even develop an acquirer’s competitive edge. Internal advanced systems and workflows also result in a seamless post-sale integration. This significantly attracts any acquirer because a smooth sailing ship will always reach its destination.

Even if you aren’t looking to sell your staffing firm right now, try to keep all these areas in tip-top shape. You never know when an opportunity to sell might present itself.


Eric Allison

Eric Allison
Eric Allison is the CEO of Staffing Venture Capital, an investment firm and business accelerator with a focus on the staffing and recruitment industry. He can be reached at eric (at) staffingvc (dot) com.

Eric Allison

Share This Post


Related Articles

Powered by staffingindustry.com ·