Starting a brand-new venture is an exhilarating decision, but it might prove to be too much for so many in the current economy and competition. The fact that the recruitment industry is growing is inspiring many to kick-start their agencies, but if you’re more inclined to purchase an existing agency, then you might stand a better chance to succeed. You can use the business’s current reputation, expand on its image and client base, and not to mention the key people that have brought the business to life.
There are many options you can consider, from investing in a franchise that might be location-specific, all the way to purchasing an entire agency to expand the business with your expertise and know-how. Some mistakes are inevitable, but you can definitely avoid most. Here, you can learn more about buying an existing recruitment business, to make the most of your investment and set your new company up for success under your own leadership.
Consider keeping the core decision-makers
Assuming that you’re looking to purchase a stable business with a strong bond with the local community, you should keep in mind that people make that business much more than the brand name alone. It might be tempting to let go of everyone in charge and all the core staff, but this is not always the most prudent way to go about the purchase. Instead, consider discussing the option of retaining some, if not all of the key workers, especially decision-makers.
You can still run the business and grow it as the main investor and the CEO, but the existing recruiters and managers staying on will be your greatest assets. They are the ones with all the client connections and successful case studies. Talk it over with the seller and see if there’s a way to work it into the contract.
Do your homework
You might be excited about the transaction and the negotiations might have been long already, but you should never land on a deal before you do all the necessary research. Collecting industry data to understand the trends and forecast any changes, understanding the existing client relationships with the agency, and getting to know the staff properly will decide the future of the business.
Think of it as another workplace and assess its levels of safety, both for the short and the long term. Can you say with some professional certainty that this business has a strong future with the local community and its existing client base? Are there any gaps in the onboarding/offboarding strategies the agency is using both internally and in the talent selection process for their clients? Make sure to understand the ins and outs of the business before you buy it.
Get location-specific legal guidance
Knowing the industry is one thing, but the process of buying a business has so many intricate, legal steps that you should always ask for professional guidance on the matter. Not to mention that each country has its own unique legal frameworks in place for such transactions precisely. If you’re looking to buy a Sydney-based business, you’ll need to work with experienced lawyers in Sydney whose expertise will help you protect your investment.
They not only know the local market, but they also know what kind of potential legal difficulties you might be looking at upon inspecting the company. Working together with financial experts, you can see if the company has a clean track record, with no fraud looming in the background, and of course, all taxes and contracts are taken care of.
Consider a non-compete
Once again, when you work in a competitive city like Sydney or New York, there are many recruiting agencies to go around, which both means having many opportunities, but also many competitors. You don’t need another one when the seller decides to use their expertise and the recently obtained wealth to start yet another business in the same sector to compete with you.
Make sure your purchase agreement has a non-compete agreement or a clause attached to it, so that you can protect the intellectual property you’re buying with the business itself. This agreement is one way to protect your newly acquired business from losing relevance immediately upon purchase, or coming across yet another setback on your way to growth.
Analyze your motivation and goals
Having ample funds at your disposal to invest in a venture is a great way to advance as a professional, but you should be certain that you’re doing this for the right reasons. Ask yourself: are you experienced and respected enough in this business to run a company of that size and scope? Do you have the funds to keep the business running smoothly upon purchase?
Will you really, measurably benefit from purchasing this agency? Do you understand what it takes to run an agency, especially if this is your first attempt at running a business? Such questions might sound harsh, but they’ll help you evaluate your goals and driving force before you make the purchase.
From the fine print in the agreement all the way to your financing plan, preparing yourself properly for the purchase will help you get started with your new company on the right foot. Remember, despite the fact that the industry itself is flourishing and there’s plenty of business to go around, it’s still up to you to make sure your company thrives, despite its pre-existing reputation and success. Use these tips to be certain that you’ve done all the work before you sign on the dotted line.