B2B, Industrial & Distribution · Seller readiness

Selling a Staffing & Recruiting business

Published · Reviewed by The Diligence Standard Team · Updated

Owners should prepare client-level gross profit, worker/payroll, recruiter production, AR and workers-comp data and show that client relationships are not owner-dependent.

How the business works

Client concentration, bill/pay spread, recruiter production, worker classification, payroll funding and workers compensation drive value.

Issues to resolve

  • Revenue is shown without gross-profit quality
  • Loss runs are not organized
  • AR aging is weak
  • Top clients are owner-held
  • Recruiter production is not measured

Evidence to request and reconcile

  • Client-level revenue/gross profit
  • Bill/pay rate detail
  • AR aging
  • Recruiter production
  • Workers-comp loss runs
  • Worker classification/payroll

Decision questions

  • What gross profit comes from the top five clients?
  • How much cash is needed to fund payroll before collection?
  • What happens if the top recruiter leaves?
  • Are worker classifications defensible?
  • How has spread changed by client over time?