Yes. You don’t need any sector experience at all to run or own a recruitment agency. If you are doing permanent work only then this may not be too much concern, but if your company does temporary too then it will make things a bit more complicated. There is nothing to stop you owning it, but you will need plenty of experience to keep a temporary desk going – its high stress level work.
For a further discussion on this, please get in touch with us and we would be happy to talk through what you need to do, as well as give you recommendations as to how to do it.
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.
Lets face it, there are a lot of websites out there all pointing to different multiples for valuing your recruitment agency. If you type the question into Google, the answer is usually that any recruitment agency is worth at least 6 x EBITDA (lets take the easier definition of net fee income – ie your turnover figure).
So if we take the figure of £300,000 in annual net fee income, is your agency really worth £1.8 million?
What do you think? Would you pay £1.8 million for a recruitment agency that may have 20 staff, it may have 2 members of staff. There may be 3 clients, there may also be 400 clients. Your database may contain 50 contractors, or you may have built up a bank of 3,000.
At the end of the day, your recruitment agency is worth what a buyer will pay for it, and no-one in their right mind is going to pay £1.8 million for a recruitment agency specialising in say general permanent recruitment at a junior end, with very limited profit margins and wholly dependent on the connections the owner has built up. Its common sense, although unfortunately this can go out of the window when agency owners start applying accountancy multiples that are mostly pie in the sky.
Your agency is a service business. You have no assets to sell, you have the professional capability of your staff and yourself to offer a buyer. What a buyer is prepared to pay for that capability depends on a lot of factors that all affect the likely sale price.
Multiplying figures by other figures and coming up with something utterly random and unjustified by physical evidence is very unlikely to reflect reality.
If you would like a real world valuation based on your circumstances, please get in touch.
RAS Recruitment Agency Sales was established in 2024 as a separate arm of our main brokerage company, Jonathan Fagan Business Brokers Limited. We have been acting for buyers & sellers of UK professional service businesses for over 20 years and RAS Recruitment Agency Sales is our specialist recruitment business sales service.
Our owners are both experienced recruiters (FIRP and Cert RP qualified) with over 40 years legal and financial recruitment experience between them.
Recruitment Agency Sales is part of the Ten Percent Group of companies, and we are committed to donating 10% of annual net profits to charity via the Ten Percent Foundation. All the businesses within the group are signed up to this pledge. Since 2000 we have donated over £250,000 to the Ten Percent Foundation, a charitable trust based in the UK and registered with the Charity Commission.