Similar businesses sell at 1.4x to 6.6x SDE. Compare live listings and connect with sellers.
National transaction benchmarks for staffing agency businesses.
Under $500K
$500K to $2M
Over $2M
A variety of factors can cause businesses to trade outside this range, including earnings quality, operational transferability, key-person risk, growth trajectory, and geography, so a listing priced above or below the typical multiple usually reflects real differences in the underlying business.
Cofounder & CEO
Key diligence, valuation, financing, and transition considerations for buyers evaluating staffing agency acquisitions.
You pay temporary workers every week but collect from clients on 30- to 60-day terms. That gap, called the payroll float, ties up far more cash as you grow, not less. Many buyers underwrite the purchase price and forget they also need a payroll-funding or factoring line to cover wages between paychecks and collections. Model the working-capital need at your target revenue before you sign anything.
Contract and temp revenue behaves nothing like direct-hire placement revenue. Temp staffing is recurring, lower-margin, and earns a spread on every hour billed; direct-hire is a one-time fee that is lumpy and tied to hiring cycles. A book that is mostly recurring temp revenue is more predictable and usually more valuable than one riding on a few big placement fees. Get the revenue split before you value the business.
Check how much of the revenue rides on the top three clients. Staffing relationships can end with a single procurement decision or a master service agreement non-renewal. If one account is 40% of billings, the business is one phone call away from a very different valuation. Ask for revenue by client and the status of every major contract.
As the employer of record, you carry workers' compensation, unemployment, and co-employment exposure. Your workers' comp experience-modifier rate directly drives cost, and worker-misclassification claims (treating someone as a contractor who should be an employee) can be expensive. Review the comp history, the classification practices, and any open claims before close.
Many client and candidate relationships live with individual recruiters, not with the company. If a producing recruiter leaves and takes a desk's worth of clients to a competitor, you have bought less than you paid for. Identify the key recruiters, understand their compensation, and make sure enforceable non-solicitation terms and retention incentives are part of the deal.
Staffing agencies tend to trade around two-and-a-half times SDE. Across 132 staffing and employment-placement transactions in the comp data, the median sale was about 2.4x SDE, with most deals landing roughly between 1.6x and 3.8x, and revenue multiples near 0.36x. SDE means seller's discretionary earnings, the profit plus owner's salary and add-backs. Marketplace listings have skewed toward Tier 2 ($500K to $2M), with a median asking price around $800K.
Answers to common buyer questions for this market.
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