Buying An Employment Agency - Now May Be The Time

How To Buy Or Sell Employement AgenciesThis can be a good time to buy an employment agency for sale, as there is a growing need for services that match workers with jobs. California's unemployment rate declined to 7.4% last summer, the lowest level in several years. That means more companies looking to hire and job seekers finding employment more quickly than in the past. But before beginning the search for a suitable employment services company to purchase, it's important to understand a bit about the industry and how to evaluate business opportunities serving the market.

Someone without a background in this business can be successful after acquiring the right enterprise. But there are at least three key things the buyer should understand when examining business for sale opportunities in the employment agency industry.  

1. Types of Businesses

The term employment agency often is used to describe different kinds of businesses. The prospective buyer who wants to invest in this industry should understand the distinction. Most companies called employment agencies receive listings of job opening which they then try to match with job applicants--people they have interviewed to determine their skills and suitability for employment. These companies might even test some applicants to learn who is able to use what kind of software, for example, or to find out if a job seeker has the knowledge necessary for specific technical positions.

Instead of the practice of Employment Agencies, known for matching as many individuals with job openings as they can, Placement Firms put their emphasis on seeking out specific candidates for positions the firms' clients want to fill. Ordinarily, these are orders for a professional, technical or highly skilled worker in a specific job description that is more difficult to fill than many of the jobs associated with Employment Agencies. One form of placement firm is the recruitment company which may not have a suitable applicant in its files and must find individuals whose work experience is a good match with the client company's needs. Sometimes that means trying to persuade someone to leave their current employer and go to work for the recruiting firm's client.

Temp Agencies focus on placing people with particular capabilities into temporary positions available for a limited time to complete a specific task or to replace an employee who is on leave from the company. Firms providing this service usually have an understanding with the companies they serve that if the company wants to offer a permanent job to a temp worker, there will be a commission paid to the temp agency for obtaining the client company's new employee.

2. Cautions

Many of the businesses in this industry rely on strong professional relationships between owners or employees of the company and those involved in hiring at the client firms. There is a risk involved in the purchase of a business in this industry that once the seller/owner is no longer involved, or if key employees leave when the business changes hands, clients may seek services from other companies to provide full, part-time or temporary workers.

Another concern has to do with whether the industries or professions that may  have had a substantial need for employees in the past but have significantly reduced their hiring in recent months or years. Causes for this can be the practice of outsourcing their labor needs or being able to replace individuals with technology. Secretarial staffing companies, for example, have seen a decline in that market sector because fewer people are being hired to fill secretarial positions.

A third cautionary suggestion is about employment companies in industries with strong unions. In some parts of the state, auto repair workers, professional restaurant staff and nursing professionals, as examples, are able to find jobs through unions to which they belong, and there is little demand for services of an employment firm.

3. Protections:

It is strongly suggested that the buyer of a company serving the employment market negotiate a transaction which includes seller financing. Even buyers who have enough cash to meet the selling price are usually in a better position when the seller has a financial incentive connected with the buyer's success with the business. It also is important to have a covenant not to compete included in the agreement. That means the seller is being paid, as part of the selling price, to agree not to participate in the type of business conducted by the company for a specific number of years and in a specific geographic area.

An excellent way for a buyer to be protected is to arrange for an earn-out provision in the sales agreement. The purpose of this approach is to postpone final determination of the selling price for a few years following close of escrow and to tie the price of the business to its performance. The mechanism for adjusting the price usually is the amount of the payments made by buyer to seller on a promissory note used as part of the payment. Parties are advised to seek help in drafting an earn out agreement from a knowledgeable business sales intermediary or legal professional.

Yes, this can be a good time to buy an employment service. The smart buyer focuses on the most appealing type of business in the industry, and understands these basic cautions and follows these protections to insure success with his or her new business.

Info For Those Looking To Buy Or Sell A California Employment Or Staffing Agency:

* Employment Agency Business Brokers And Agents That Assist Buyers And Sellers

* Excellent Resources / Contacts For Employment Agency Sellers And Buyers

* Today's List Of Employment Agencies For Sale & Wanted To Buy In California

* Recent Employment Agency Articles, Blog Posts, Interviews Related To This Topic

Peter Siegel, MBAAbout The Author:  Peter Siegel, MBA is the Founder And Director of and coordinates the ProBuy / ProSell Programs on BizBen. Peter Siegel can be reached direct at 925-785-3118 to discuss getting resources for selling a employment agency, financing a employment agency purchase, or buying California employment agencies. Make sure you check out BizBen's list of employment agency postings (for sale/availabale & wanted requests) - this list of postings is updated daily!

Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business, How To Sell A Business, Selling A Business

  Helpful Resources To Assist In Selling And Buying California Businesses
Ryan Clark, Business Broker: Southern California

The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan, Business Broker at 310-652-8353.

Timothy Cunha JD, Business Broker: SF Bay Area

SF Bay Area experienced attorney, & business broker. I & my EvergreenGold team offer owners sound advice & expertise to build business value & achieve profitable sales. For a FREE business evaluation & SWOT analysis for your business call me direct at 650-600-3751, 650-866-5393 Text.

Chris Seaman, Business Broker: Southern California

Founded in 1994, First Choice Business Brokers has accelerated to become one of the most successful Business Sales Organizations in the world. Our team of agents have gone through extensive training to become experts in the field of business brokerage. Call Chris at 858-578-4111 for more info.

AJ Rana - Business Broker, San Francisco Bay Area

Professionals who understand the importance of world class business brokerage service and the value it can create. Specializing in assisting sellers and buyers with retail stores, restaurants, hospitality & lodging, manufacturing operations, distribution companies, e-commerce and service businesses.

Peter Siegel, MBA: Business Purchase Financing Solutions

Niche business purchase financing advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages. To get professionally pre-qualified or more information on the ProBuy/ProSell Programs: 925-785-3118.

Orville Wright, Business Broker: Central Valley Area

Central Valley Business Brokerage a full service Business Brokerage company. We specialize in assisting business owner/sellers and buyers in these Central Valley Counties: Fresno, Tulare, Kern, Madera, Kings, Mariposa with buying & selling small to mid-sized businesses, valuations, & exit planning.

William Park, Business Broker: Southern California

Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.

Peter Siegel MBA, BizBen Founder, ProBuy, ProSell, ProIntermediary Programs

Founder Of (since 1994). I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I consult daily with buyers, sellers, and brokers daily about buying and selling California small to mid-sized businesses. Call 925-785-3118.

  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
8 Tough Questions You Most Likely Will Be Asked When Selling Your Business

When selling your small business, you'll be bombarded with questions - from the brilliant to the ridiculous. You need to be prepared. Here are some of the key questions you can expect to be asked. Tim Cunha (SF Bay Area Business Broker at 650-600-3751) reviews many of these possible questions.

Getting An SBA Loan To Buy A Small Business: Dispelling Some Major Myths

When seeking SBA loan financing many potential business buyers have wrong information about the process of securing the best financing to buy a business. Peter Siegel, MBA (at 925-785-3118) a business purchase financing expert delves into the myths and facts regarding SBA loan financing.

Thinking About Selling A Small Business? Know These 8 Factors That Matter

The likelihood of selling a business is often determined by external factors in the marketplace. Here are eight influences on how easy, or difficult it might be when selling a small California business. Peter Siegel at 925-785-3118 (BizBen ProSell Program) explains these factors for owner/sellers.

Business Purchase Financing Expert Peter Siegel - Tips On Proving Cash Flow

What are the actual "provable" adjusted net earnings (cash flow) of a small to mid-sized business being purchased? Buyers need to look carefully at all financial info for the "real" adjusted net income/cash flow. Peter Siegel, MBA (BizBen ProBuy & ProSell Lead Facilitator) at 925-785-3118 explains.

6 Simple Things To Increase Business Value Before Offering It For Sale

How do you value a small business before putting it on the market? Tim Cunha, JD offers 6 items all business owners should consider. Other advisors and business brokers also weigh in on this very important topic especially when over 70% of small businesses never end up selling (due to pricing).

Due Diligence Checklist: 10 Key Items To Investigate When Buying Businesses

Buying a California small business involves reviewing due diligence checklists so buyers can learn enough to determine whether to proceed with a deal. Here's a due diligence checklist. Peter Siegel, MBA (BizBen ProBuy Advisor & Business Purchase Financing Expert) at 925-785-3118 shares his views.

Business Purchase Financing: SBA Loans & Non SBA Financing Solution Services

I provide niche business purchase financial advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages, etc. To get more information about getting Pre-Qualified & more info on the ProBuy/ProSell Programs: 925-785-3118 Direct.

Business Purchase Financing Help - Expert Tips For Faster SBA Loan Approvals

Business purchase financing advisor Peter Siegel, MBA shares his views on SBA loan financing. He explains the nuances of the SBA loan process when considering business purchase financing or getting pre-qualified. Reach Peter Siegel, MBA direct at 925-785-3118 regarding SBA & Non SBA Loan Financing.

Tim Cunha Business Brokerage
John Willingham Sunbelt Business Brokers
Bill Ziprick Legal Advise
Redwood Escrow Bulk Sale Services
Vlogs and Podcasts
BizBen ProBuy Program
BizBen ProSell Program
Business For Sale California Stats
Advertise On BizBen
California Educational Events Buying And Selling Businesses

BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved

Clost Login

Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.

First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*

You Are A:

Email Address:

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Due Diligence Checklist: 10 Key Items To Investigate When Buying Busines...
Read More News
6 Simple Things To Increase Business Value Before Offering It For Sale
Read More News