Top Five Strategic Ideas That Build Value in Your Staffing Business
By
Jim Childs
Partner, Childs Company, jchilds@childscompany.com
www.childsco.com
I have been involved with the staffing industry both as an investment banker and as a CEO for 13 years. During this time, I have worked on well over $2 billion in transactions involving staffing firms, including the sale of my own firm in 2004. This perspective has allowed me to see dozens of different companies in the industry and draw some conclusions about strategies that create value for staffing firm owners.
First, there is a caveat to this theme: the fact that there are no “silver bullets.” The art of creating value is certainly in the details and execution of everyday actions that you as an owner take. However, there are some strategic ideas that may provide you with a framework to help build even greater value in your business.
Second, the simple mathematical formula of value in your business involves multiplying your annual earnings by a multiplier. Thus, the game is to increase earnings through revenue growth and margins and to increase the multiplier through being a desirable target to someone else. In essence, a buyer pays a premium for something he or she wants but can’t easily replicate. This concept is important for staffing firm owners as they develop strategies for maximizing value.
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About Childs Company
Childs Company provides investment banking services to middle market companies with an emphasis on staffing, IT services and business process outsourcing firms. Each principal at Childs Company has both operating and advisory experience which allows us to effectively advise our clients before and during a transaction. For further information please visit us at www.childscompany.com.
