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As a recruiter looking to take the next step in their journey, you may be considering whether building a recruitment business to sell in 3-5 years is worth it.

If you are thinking of growing a business into a sellable asset as part of your retirement plan or perhaps to enable you to have the funds to take the next step in your plan, SSG can help you. Let’s take a look at if it is really worth doing and if it could help you realise your dreams.

Understand your ultimate goal

Knowing why you want to build with the intention to sell is key. For many, it is to build wealth either for retirement or to fund another ambition and others just want the satisfaction and sense of achievement that they have built something valuable. Knowing what your ultimate goal is from the onset can help inform the decisions you make as you build and grow your recruitment business.

How much could your recruitment business be worth?

Recruitment businesses are valued based on their EBITDA – this is the earnings before interest, taxes, depreciation and amortization. As a rule of thumb, permanent recruitment businesses are valued at four times the EBITDA and contract businesses at eight times the EBITDA. Understanding how your recruitment business could be valued can help you plan when is a good time to sell and help you plan your growth.

For example, the earnings of your recruitment business are key to the overall worth. So planning how you will increase your earnings year-on-year can help you determine how long it will take you to grow your business to achieve the worth you are looking for.

The pros of building a recruitment business to sell

The benefits of building a recruiting business to sell will be unique to each individual, but some of the most common ones include:

  • Can help you build wealth
  • Delivers a sense of satisfaction and achievement
  • Could help you retire early
  • Can help you raise the funds needed for other ambitions
  • Build an estate that can be left to loved ones
  • Fund child’s education

The cons of building a recruitment business to sell

While there are many pros to building a sellable asset, there are also some downsides that are worth considering before you decide to continue on that path, including:

  • The value of your business may not reach your desired sum or buyers may be unwilling to pay what you are asking.
  • The sale may not be straightforward. An initial upfront sum may be paid with the rest following after an agreed period. This is known as an earn out.
  • The sale of your business may not be quick. It can take time to sell a business, so if you are on a tight schedule this may not be the best option for you.
  • It can be hard to relinquish control of the business you have built. While you may plan to sell the business, once you have lived and breathed it for a number of years you may not want to let it go.

Are you ready to go solo?

Whether you are ready to elevate your income, enhance your work/life balance or take the next step of your journey by building a recruitment business to sell as part of your retirement plan, download The Ultimate Recruitment Business Startup Guide 2023 Edition to get you started.

It takes courage and resilience to start your own recruitment business. There is more responsibility with being a business owner than with just being a rockstar recruiter. However, you don’t have to take the journey alone, SSG is here to provide the support you need.

From help with marketing to accounting and technical support and client support services, our team of experts are on hand to help you manage the day-to-day aspects of running your business so you are free to focus on what you do best – billing.

Next Steps

Ready to talk to us? Schedule a call today with a member of our team to see how we can help you launch and run your own successful recruitment business.

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