The staffing industry is appealing to buyers because it’s a high volume, high growth field. As more workers are shifting to contract or temporary labor, the demand for staffing continues to increase.
This means that if you’ve built a successful staffing firm and are ready to exit the industry, you’ll have some significant tailwinds at your back when you decide to sell. However, market demand and macro-dynamics don’t tell the whole story when you want to sell a staffing business. Each specific company comes with its own set of relative strengths and weaknesses – and a seller’s goal is to emphasize the positives while working to mitigate the negatives.
A qualified business broker can help you do exactly that, while also providing critically important guidance during each step of the sales process. With this in mind, let’s review what you need to know when selling a staffing company.
Five Keys Steps When You’re Ready to Sell a Staffing Business
After you’ve spent years building your company, the last thing you want to face is the prospect of a long, drawn-out transaction. Or even worse, the possibility of leaving cash on the table.
If you want to sell a staffing agency in a timely manner and at a favorable price, you need to enter the process with your eyes open and your mind fully prepared. To help with this, we’ve outlined five key steps that all staffing agency sellers should take when attempting to exit.
Know Your Company’s Value
Successful sales begin with a rigorous examination of value. This starts with a deep dive into your finances. Revenue, growth, earnings before interest, taxes, depreciation, and amortization (EBITDA), sales volume, and margins all need to be carefully calculated and tracked. Buyers will want these figures to tell a growth story – they want to see the company trajectory pointing up before buying. If interested parties notice flat or declining financial numbers, their offer will reflect this – assuming an offer even comes.
Staffing business owners should also take a close look at real estate, equipment, and other assets. Obviously, in this industry, human capital is the most important asset, so buyers will want to see two things: A talented pool of available workers and the right processes in place to ensure a sustainable pipeline of new talent. These are essential attributes for buyers in the staffing industry.
Once you have a handle on these elements, you can arrive at a fair valuation that attracts a variety of buyers.
Get Your Business in Prime Selling Shape
You wouldn’t sell a house with peeling paint and broken appliances, so why would you sell a staffing agency that is performing at a low ebb? Unless your hand is forced by the need for immediate liquidity, it’s almost always a smart idea to take the time to get your business in peak operating condition before initiating the sales process.
This means growing sales over your last 12 months, expanding your client roster, and ensuring that all of your assets are in good condition. If you can push up your margins or revenue by working harder and smarter during the year prior to your sale, that effort (and the resources you deploy to get there) can be paid back several times over when it’s time to close your deal.
Business brokers can also help ensure that you avoid the worst-case scenario: Leaving a lot of money on the table. Let’s face it; running a staffing business doesn’t always prepare you for high-level negotiations. Most business owners negotiate with vendors and clients on occasion; however, few have experience settling on a fair price for business transactions.
Business brokers, on the other hand, handle such negotiations all the time. This means that the right broker can help ensure that the deal you strike is fair – and that it is concluded in a timely manner. An experienced business broker can also get more than one buyer involved in the sales process, which greatly strengthens the negotiating hand of the seller.
Choose the Right Business Broker
If you want to sell a staffing company quickly and at a favorable price, it pays to have professional guidance. A business broker is an invaluable resource who can provide the following key services:
- Help ensure your valuation is determined properly.
- Help market your business by connecting you with targeted groups of qualified buyers.
- Help draw interest from a variety of buyers and create the conditions for a better price by facilitating competitive bidding.
- Help prevent you from leaving money on the table, while also providing essential guidance throughout the process.
To reap all of these benefits, however, you need to find the right CT business broker firm.
Why Choose VR New Haven
At VR New Haven, we specialize in helping staffing agencies connect with qualified buyers and exit their businesses on their preferred terms. We’ve developed a proprietary success framework – our proven 9 step sales process – that guides all of our transactions and helps ensure that all clients reach a successful sale.
If you’re ready to sell a staffing agency, we urge you to contact us today for more information about how we can help you succeed.