Sell, Buy or Value a Recruitment Agency

Yes its possible, but it very much depends on your circumstances. If you specialise in permanent recruitment, have connections to 3 large companies with the majority of your £100k turnover coming from 3 placements into those companies, then chances are buyers are not likely to pay you very much for your business. Your connection will probably be personal, and you won’t be able to demonstrate consistent turnover if you have all your eggs in one basket like this. However if your £100k comes from 30 different short term locum placements in a specialist sector, then your business will have a value and be of interest to buyers.

As ever with business sales, don’t forget that you have to be in the right place at the right time to achieve a successful sale. A business is worth what a buyer is prepared to pay for it.. Contact us today for a discussion about your recruitment agency.

This is a very difficult question to answer, but in a nutshell, recruitment businesses can take as little as two to three weeks to agree a sale, and as long as three or four years, if not longer than that.

There are a whole host of reasons for this, and achieving a sale depends on a huge amount of factors, including luck, circumstances, the economic climate, your geographical location, your profit margins, the number of staff, industry sector(s) worked in, whether you are covering temporary or permanent recruitment, how much repeat business there is, the structure of the business, the property used or owned by the business, your website, plus many random things you would never think of (and neither would anyone else other than the buyer!).

Timing and luck

Selling a business is very often a question of coincidence – coincidence that a buyer just happens to be looking specifically in an area, and you happen to be looking to sell specifically in that area. Although of course there are lots of things you can do to improve your chances of success, the answer to the question how long does it take, is just that it really depends on the circumstances of your business.

Realistic prices

One thing that influences sales dramatically of course is the expectation on price a seller may have. Sellers with unrealistic expectations for the business they have for sale tend to find it considerably harder to sell quickly, if at all, and often sellers who have very unrealistic expectations will either never sell or take a very long time to sell, usually up to the point when they decide to drop their expectations down and be more realistic in the price they are expecting.

Businesses remain fresh

It does not really matter to a certain extent how long it takes to sell when it comes to a price – the sale price of an employment agency will not depend on how long it has been on the market for in the same way that a house sale does. Firm sales do not become stale, so it does not really matter if you decide to put your business up for sale but then do not sell for a couple of years. Every buyer coming into the business will be in the same position as looking at it from afresh.

Recruitment companies will often take between 6 and 12 months to achieve a sale. It is quite different to other sectors – accountants can usually achieve a sale within 3 weeks (for businesses with less than £1 million turnover). It quite often depends on how the seller and buyer come to market. If the buyer is in desperate need of a purchase, or the seller needs to offload their business quickly for tax or financial reasons, things can move very quickly indeed. Contact us to discuss your business and see what we can do to help.

If you are seller, we do not charge any fees, unless you require our premium services including valuations.

Buyers only pay us a fee if they conclude a deal with a seller. We agree what this fee will be at the outset – it is a fixed fee, not a percentage.

For sellers there are no hidden fees, exit penalties or advertising costs. We are an ethical broker and we want to be different to the majority of brokers out there who frontload their fees to sellers and do very little to market businesses out to buyers.

Yes if you can. It is much easier to sell a limited company than a business owned and run by someone trading as a particular name. It also gives the business more value. This may seem a little odd, and I often get asked about it because sole traders cannot understand often why anyone would want to do it, but it really does seem to add value.

There are a number of reasons for this, with the main one being how much easier it is to sell a limited company than it is to sell a sole trader business. A limited company can be bought and sold like any other, with the new owner acquiring the shares and becoming a director, and the old owner selling the shares and resigning as a director. If you compare this with a sole trader, the sole trader needs to either take on a partner and then resign from the partnership, or arrange for the new person to come in and take over the practice on a sole trader basis.

The latter does not seem to be too problematical, but it is much easier to convert to a limited company and do a share sale.

So, the advice to convert to a limited company is because it is usually a much smoother transaction to sell a limited company than it is a sole trader. We get a lot more interest in limited companies from buyers.