Sometimes the next best move for your staffing business is to combine your competencies with another firm. Whether that means buying or selling, it’s a great time to make deals.
Merger & Acquisition Expertise
Over 25 years, we have helped connect many staffing agencies with interested buyers and sellers. The best part? We do it for free as an added bonus to our funding and back office services. Working closely with dozens of M&A experts and specialists, like myself, we have the pulse on how to sell your staffing firm, how to buy, and how to improve your value.
What Should You Expect from A Recruitment Firm M&A
M&A can be a long and drawn out process, so it’s important to set your expectations right at the beginning.
Here are some things to note going into the process for the first time:
- You should be preparing for M&A six months to a year in advance.
- You will need an experienced partner to help you in the process, typically in the legal, finance, or investment banking fields.
- Expect to completely audit all your financials to get a clear picture of where you are at.
- There are many ways to sell or acquire a business, including to an individual buyer vs a private equity group. Choose what fits best for you.
- The first offer won’t necessarily be the best. Let your partners guide you – they should know how to handle it.
- The sale of a business will affect your taxes, so you want to carefully consider timing and sale method
How To Prepare For A Staffing M&A
When it comes to M&A, preparation is key. Six months to a year before you officially start the process, there are steps you can take to prepare your company for a sale.
Get a Partner Who Has Been There Before
Look for experienced partners in the legal, finance, or investment banking fields. Whatever route you go, choose someone who has executed a staffing merger or acquisition before. When in doubt, ask industry peers who have been through the process.
Set Yourself Up for Business Valuation
Successful, profitable staffing companies are always in demand. If you feel like there is room for improvement from an operational standpoint, make changes now to increase your future value. Does your team need improvement? What areas are most profitable, and what’s not? These are some questions to ask yourself before you start the process.
Audit your financials
Making your financials easy to understand is key. Consider hiring an outside firm to audit your financials and make sure they are as clean and easy to read as possible.
If selling, price realistically
If your offer sounds too good to be true, it probably is. Buyers are going to be wary of pitfalls if you price too low, and ignore you outright if you price too high.
If buying, do your research
Get an M&A team in place, set screening criteria, build profiles, and create a “Master List” of targets.
Staffing M&A Resources
When preparing to buy or sell a staffing agency, knowledge is power. Check out these resources on M&A and related topics.
The Staffing Industry Guide to Mergers & Acquisitions
In this guide, our aim is to arm you with knowledge about M&A in the staffing industry so you know what to expect going in, whether on the selling side or the buying side.
Staffing Industry M&A: Four Things You Need to Know
In this blog, we discuss four things you need to know when it comes to staffing firm M&A transactions.
M&A as a Growth Strategy: What You Need to Know Before you Buy or Sell Post-COVID
M&A is a big decision with multiple considerations. In this article we will explore these challenges and look at best practices for addressing them so you can make the best most informed M&A decisions for your staffing business.
How We Can Help With Your Firm's Merger
Is it time to talk M&A? Our 400+ clients are always looking for ways to combine competencies. Let our experts help you in the process and make it as easy as possible.
Risk carefully, grow purposefully and — recruit and staff resourcefully with Advance Partners — fully committed to your forward momentum of your staffing & recruitment company.
FREQUENTLY ASKED QUESTIONS
While individual times will vary based on many factors, the typical time frame of a business sale is 6-12 months.
It depends! On the industry, the type of firm, how long they have been in business, etc. You could be looking at anywhere in the low millions for a small agency or much more for an established business.
There are many methods of valuation. Some common types are:
- Market Valuation which compares you to similar companies
- Discounted Cash Flow which determines a business’s value based on its projected cash flow adjusted (discounted) to current levels
- Asset-Based Valuation which looks at your balance sheet and takes your business’s total net asset value minus liabilities
- ROI-Based Valuation which determines the value of your company based on your profit and the potential return on investment
Start preparing 6-12 months in advance by getting your financials in order, key staff in place, and focus on growth. Then, contact an expert in the legal or accounting fields to start the process.
You can start by asking around your industry contact or a trusted partner, like us. Then you can contact an investment banker or other M&A professional to help.