RecruitHub - Most-asked start-up questions of 2023
Funding & finance

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Is an 'exit' realistic?

The number of recruitment agencies who successfully exit is low.

Less than 1%.
But:
there are proven ‘building blocks’ that make an agency attractive to buyers
you can deliberately structure your agency’s growth around these
there are multiple exit routes (ways to sell your business)
the hundreds of recruitment agency owners who do sell each year (almost) all started out where you are now
even small (but profitable) agencies can be worth life-changing amounts of money to founders
there are many ways you can maximise business ownership even if you don’t sell

In a nutshell, agencies usually become attractive to buyers if they can demonstrate:

consistent, durable (and ideally growing) profit generation
lack of ‘risk’ in business performance (reliance on owner / key staff members / key clients / contingent sales)
The attractiveness to buyers typically increases significantly at ~£500k+ annual profit, and again at £1m+.

Ways to exit

Recruitment agency founders can exit their agencies by:
selling to (or merging with) another recruitment agency
selling to an investor (e.g. private equity)
selling to their management team (’management buyout’ / ‘MBO’)
listing their company on a public exchange

What if I don’t sell?

The many successful agency owners who don’t sell nonetheless build highly lucrative companies.
This usually involves:
generating high levels of personal earnings
generating income to invest in other business ventures (property, angel investing, stocks and shares)
creating passive or semi-passive income
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