Acquiring a recruitment business – 5 things to know
As the economy continues to recover from the pandemic with employees returning to their workplaces, the prospect of owning a recruitment business is becoming more appealing to buyers. In 2019 alone, statistics showed that the turnover of recruitment businesses had increased by 9% to £38.9 billion, with this increasing year upon year due to the lucrative opportunities the recruitment sector offers. Despite the pandemic, forecasts for the remainder of the year remain high, with leading cloud-based tracking website Tracker stating that 45% of recruitment business owners expecting their revenue to increase by more than 25% as other sectors begin to re-open.
Corporate Finance Assistant Nathan Miller, currently working with Altius Group, has experience within the recruitment sector and has provided his advice for those wishing to acquire a recruitment business.
Ensure there is a niche
Whether the business is well-established or just starting up, you need to ensure there is a specific market for the service you wish to acquire. In the recruitment sector, there is a large variety of competitors. This has been amplified by COVID-19, as many businesses are fighting for contracts. A niche is therefore essential to the business to ensure the acquisition of contracts.
Prepare and Plan
Research and planning are very crucial during the acquisition process. Having a detailed analysis of business and clients helps to track your month-by-month goals, and prevents you from becoming stuck during and after the acquisition. A business plan will also help you analyse any valuable clients and assist you in targeting new clients. In the absence of a business plan, you should think about your own qualifications, the type of sectors you would like to work in and potential costs and business forecasts. These forethought ideas will make you an ideal candidate to acquire a recruitment business.
Consider knowledgeable staff as an asset
The loyalty of employees is not something that should be overlooked when you acquire your new business. Employees drive income and connections and if they witness Directors and other staff leaving, they will be reluctant to stay. If you tie people of importance to the company, this will lead to more contracts and success for the business.
Ensuring you achieve the best possible price
During the sales process, ensure that the sales of the business are on track for what you want. This plays a crucial role in your financial forecast and can lead to an uphill battle if the final sales figure does not match your forecast. Examine the current sales, and previous sales, in order to gain a more accurate forecast to assist in getting the best possible price.
Moving on from COVID-19
Although at the start of the pandemic, the recruitment sector appeared to be decimated with redundancy and internal cost-cutting, firms quickly adapted to the new market by entering niche markets where their firms were needed. As restrictions continue to be lifted, the general public are spending their money and recruitment are filling roles as the economy bounces back from 2020.
If you are looking to purchase a recruitment business and wish to learn more about how we can help you achieve your plan, then please call us on 01772 775 775 or via Robert.Yates@kingsprofessional.co.uk.