Staffing Company Valuation

What is your Staffing Company Worth?

Let us help you create a report card for your business.

By grading the quality of your company we can help provide a rough determination of what your company might sell for in today’s market. Begin by examining the following elements used to help arrive at a fair market value for your business.

For each question, check the level of performance for your company.

1. High Growth Rates are always a sign of a healthy business with strong market acceptance. Ignoring 2009, are you growing at a rate of:

15% per annum or more 12% or more per annum 9% or more 6% growth rate or more Under 5% per year

2. High Gross Margins are to some degree relative to your staffing sector; certainly a buyer wouldn't expect the same margin level from a Light Industrial (LI) firm as they might for a Scientific Staffing firm. What are your company’s gross margins?

25% or above 22-25% 19-22% 17-19% 15-17% or more in IT, Engineering or other high billing sectors 15% or below in traditional sectors, such as LI, Clerical, Commercial etc.

3. Major or Growing Markets are always in greater demand by most buyers, although some buyers do prefer secondary or tertiary markets as there is often less competition. What type of market are you in?

A top 40 market or a rapidly growing market A top 25 market and/or a rapidly growing market A transitioning market place, where some of the businesses are moving out to healthier markets A market place where many of the long-term employers have either closed, moved offshore or to areas with lower labor costs and business friendlier laws A town with a population fewer than 100,000 people

4. Strong Market Position/Reputation is a less objective measurement than some other items we've listed. How would you rate your market position?

You are a recognized market leader by customers (yours and others) in your market area You are an up and coming super-star firm, getting lots of local recognition You have had a stable presence in the market for ten or more years You are just there like furniture, with very little awareness of your service You are under the radar serving a small group of satisfied clients

5. Diverse, Long-term and Stable Customer Base- buyers always prefer a stable, diverse customer base. How would you describe your customer base?

You have a stable list of long-term repeat customers especially if some or many are growing and/or your top client is 10% of your total sales volume You have a fairly stable list of diverse customers and your top spending client spends 15% or less with you Your top spending client represents 18% of your sales or less Your top two clients spend 30% or more You have this week's customers and you know that next week's customers are totally different (this increases the risk and the cost for the buyer) and /or if your top customer is more than 25% of your revenue

6. Multiple Offices are preferred as they are perceived by buyers to spread risk. What is your sales volume and how many offices do you have?

You have annual sales volume above $12M with 3 or more offices You have annual sales of $9M with two or more offices You have 2 offices doing $7M in sales You have a single office doing over $5M You have one office billing less than $2M

7. Good management depth is extremely important to you. How would you describe your management team?

You have solid, experienced line management operating your business that will stay on You have young, sharp, aggressive, keen but less experienced staff that will stay on You have a solid crew of performers that are capable but won't set the world on fire You have one or more weak links in an important role on your staff The owner is the key to the business

8. Good Insurance, a clean legal history and accurate record keeping build confidence in buyers. How would you rate your history in these areas?

You have declining workers’ comp incidents and/or fewer SUTA claims, combined with books of account that add up properly Your books balance and insurance claims are steady Your books balance and your insurance claims are in line with industry numbers Your insurance claims are in line but your books don't balance Your workers’ comp losses or SUTA claims are increasing and your books are not totally reliable

9. More Contract/Temp Staffing vs. Perm/Search Revenue improves value since contract and temp revenues are more stable and predictable than Search or Direct Hire revenues. How would you describe the type of staffing you provide?

Your Search/Direct Hire business is less than 5% of your annual revenues Your contract/ Temp business volume is 90% or more Your contract/Temp business is growing in proportion to your Search/Direct Hire business Your Search/Direct Hire business exceeds 15% of your annual revenues Your sales in Search/Direct Hire exceed 20% of your annual business volume

10. What primary industry are you in?

IT Staff Augmentation Specialty Niche Healthcare Offices Services Light Industrial

11. What are your Trailing Twelve Month Revenues?

12. What is your Trailing Twelve Month EBITDA?

Staffing Company Valuation

What is your Staffing Company Worth?

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