Who Tends to Buy
- Larger staffing firmAdds your clients and recruiters to a branch network it already runs.
- Industry operatorWants to enter a niche, such as healthcare or light industrial, by buying your book.
- Private equity backed platformBuys agencies in a region and merges them under one name.
Gross profit, not billings
Staffing owners often quote total billings. Buyers look at gross profit, which is what is left after paying the workers and the payroll costs tied to them.
A million dollars of billings can mean a small profit. Show gross profit by client and by placement type so a buyer can see where the money comes from.
Client concentration
If a few clients make up a large share of billings, buyers see risk. A common rule is that more than about 15 to 20 percent from the top customers can cut the price or end the talks.
Agencies with many mid sized clients and a mix of industries look steadier. See our note on fixing customer concentration.
The recruiters are the asset
Your clients return because a recruiter knows what they need. If the best recruiters would leave with the owner, a buyer will ask for retention terms.
Document how placements get made, so the process does not live in one person's head.
Payroll funding and worker rules
Agencies pay workers weekly and collect from clients later, so many use payroll funding or a line of credit. A buyer will check what happens to that financing at closing.
Expect questions on how workers are classified, workers' compensation coverage and tax filings. Clean records here help the price.
What to gather before you list
Pull together gross profit by client for three years, a list of workers by status and a summary of your insurance and payroll filings. Add your client agreements and a one page note on how placements get made.
Buyers also ask about the timing of your cash. A monthly forecast of receivables and payroll helps show you have a handle on it.
Filings may also apply if your agency places licensed workers. Check our Texas filings guides.
What makes yours stand out
- Recurring clients across several industries
- Gross margin that holds steady year over year
- Recruiters with signed agreements and a plan to stay
- Books that match your tax returns
For a figure to plan around, request a private price range. Owners also ask how add backs change the number.