How to place a value

Net fee income is one of the most important factors, as is your business’s ability to convert net fees into profit. I have always believed that in the recruitment sector it is vitally important for owners not to get blinded by the size of a business. Generally people like to talk in terms of turnover but I have always been more interested in margins. As a recruitment business grows then so will the turnover, but there’s no point in bringing in more work if the profit margins are not right from the very beginning. Sustainable growth is all about getting the balance right between turnover and profit. bit.ly/1hQLliO
A well-run firm will also be strong enough to withstand those sudden economic changes which naturally have a knock-on effect on the jobs market. Client concentration comes into play here – the best firms are the ones who spread their net wide and have a steady stream of new business, rather than building everything around a few valuable customers.Another key factor is making sure the business is well equipped to move forward. With the nature of technology these days, having good IT and CRM systems is essential. The days of handwriting client and candidate records and keeping them in bulky folders are thankfully long gone, but you still get companies who have had the same computer systems in place for far too long. bit.ly/1hQLliO
Another key factor is making sure the business is well equipped to move forward. With the nature of technology these days, having good IT and CRM systems is essential. The days of handwriting client and candidate records and keeping them in bulky folders are thankfully long gone, but you still get companies who have had the same computer systems in place for far too long.There are also things which may not necessarily be easy to pin down in black and white but are of huge significance, such as the working culture and brand reputation. Recruitment is a crowded sector so your values and USP need to be clear to distinguish your brand from the competition. These aspects are crucial in determining how capable your business is in winning new clients and retaining current ones. Additionally, being known as an employer-of-choice is vital in the ongoing task of attracting and retaining new talent. bit.ly/1hQLliO Of course, a potential acquirer’s view on valuation will not always match your own opinion. The value a founder or owner-manager applies to the business they have nurtured and grown through good and bad times is nearly always influenced by emotional attachment. For any entrepreneur, the satisfaction obtained from creating and building an organisation from scratch into a market leader is often priceless – it is the justifiable pride in achieving something really special. As a result, the objective and emotionless view of a potential purchaser can seem very distant from your own view. bit.ly/1hQLliO A well-run recruitment firm will make a valuable contribution to the wider community in terms of providing employment opportunities for candidates and the company’s own employees and by filling vital requirements for their clients to allow other businesses to grow and flourish. bit.ly/1hQLliO

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