Pros-of Strategic Buyers 

1. They may be able to help you grow the business if they are so inclined culturally by getting you on bid lists that may be meaningful in creating growth opportunities for your staff.
2. Along the same lines regardless of   bid lists, they can often get you by corporate gatekeepers and open doors one could only dream about before joining with this well positioned group.
3. They may have business opportunities that they don't have the bandwidth or expertise to pursue properly; however, you and your team might be perfectly right-sized to pick up some new business.
4. They may be able to offer your staff more or better benefits, increased training and greater advancement opportunities for those that succeed.


Cons-of Strategic Buyers

1. Some larger firms have a knee-jerk reaction about the superiority of their system, techniques, metrics and approaches, often with little notice of what you did to become a valued acquisition for them. There is a tendency for some larger firms to put your staff through their cookie cutter and clone them until they are just like their own staff; who are often adverse to risk-taking.
2. Often, but not always, the larger operator has worked hard to eliminate thinking on the front lines where many service decisions are made. In many cases, there is a large binder on a conspicuous shelf that has all the answers one needs to provide mediocre service where one size solutions fit most situations, however poorly and unsatisfactory the result may be for the customer. They know their Manager will always ask them if they consulted the Bible (er, manual) before responding to their customer and very few are prepared to say no (to their Manager), "I used common sense instead". Expressing such thoughts is not always a career booster.


Pros-of Financial Buyers

1. Typically, you will be left on your own to operate the business, since by definition a Financial buyer doesn't know how or want to operate your business. Don't be misled, often these are very experienced, sharp business people who understand the business of business and will ask you riveting questions to understand your thinking process and how you arrive at your business decisions. Often, when they can, they will make useful introductions to potential buyers of your services.
2. Very often, you and members of your senior management team will be expected to retain 20%-30% of the equity in the business. Essentially, your investor group will be acquiring 70% -80% of the business at closing. Investors, not being expert operators of staffing firms want their operating Partners to have some skin in the game. This gives the management team a chance for another bite of the apple when the business has a liquidation event, usually another sale, or taking the firm public.
3. Most Financial Buyers particularly Private Equity Groups (PEGS) who are often organized into firms that raise money from private individuals and corporate treasuries to provide cash to finance their funds and they typically have certain objectives and guidelines for each of their funds. Many PEGS look at an investment period of 3 -7 years before refinancing or liquidating their fund, giving the seller's a rough time frame for their time with this group of investors.

Cons-of Financial Buyers

1. As investors first and foremost, they will always seek a better and safer return on their investment. Translation-they have no particular commitment to the Staffing industry beyond the enhancement or at least preservation of their invested capital in your business.This is not to say they will run or change their commitment to your business at the first sign of trouble, however, they don't invest to lose their principal and they don't know how to run your business.
2.  Retaining equity is not for everyone. While some Management teams may enjoy their autonomy they don't necessarily want to be minority owners in a business they previously owned outright.
3. The sellers have little or no control over the timing of the next liquidation event that can end their career with that business. That could work out to be fine however, if so, it will probably be a result of good fortune rather that the selling Managers having chosen the correct timing.
4. Bottom line is that there is no ideal type of buyer for everyone and it may come down to the Sellers assessment of the buyer that will allow them the greatest opportunity to maximize their investment, have fun and continue to enjoy the business and be proud of the choice of partner they have made.

1. (B) Are you comfortable joining with an investor(s) who is not involved in the Staffing Industry?

Yes       No          Need to know more         Unsure  

2. Being aware and knowledgeable about current conditions: what would be acceptable to you? 

Currency Used to Acquire:

a). Cash:        % of value at closing:

b). Stock:   Yes___                 No___

c). Notes: Amount:                Term:                 Interest rate:

d). Earn out Amount:            Term:                 Details:

Yes      No         Need to know more           Unsure    

3. Buyer's Strengths:

Please rate 1 (Most Important) to 14 (Least Important to you)

a)   Branch Network:

b)   Public/Private:

c)   Administrative Infrastructure­­­­­­­­­­­­­­­­:

d)   Better Insurance Coverages':

e)   Management to work with:

f)    Acquire new service sectors:

g)   Obtain access to experienced  management:

h)  Obtain better benefits for Staff:

i)   More and better training for Staff

j)  More advancement opportunities for Staff:

k)  Greater Technology:

l)   Cash to infuse:

m) New service line(s) or new Geography for Seller to utilize:

n)  Management Opportunities:

Other (describe): 

4. Seller's Motivations:

Please rate 1 (Most important) to 10 (Least Important to you): 

a) Gain Liquidity

b) Retire

c) Succession Planning:

d. Time Frame for next Liquidation event:

e) Gain larger distribution channel:

f) Get out from under Back Office: 

g) Obtain Mentoring:

h) Broaden Responsibilities:

i) Take some cash off the table:

j) Buyer will help us grow the business:

k) Other (describe):

5.  As best as you can determine:

Will this Buyer help your business Grow?

Yes        No       Need to know more           Unsure  

6. Will you and your Management Team enjoy working with this Buyer:

Yes       No       Need to know more           Unsure  

7. Can you maximize your earn out with this buyer?

Please estimate the odds of making every dollar available in your deal.

a)   100%       b) 80%        c) 60%     d) Less than 50%

8. What do  you and your Management Team hope to achieve from a sale of your business?

Please rate 1 (Most important) to 7 (Least Important) to you:

a) Partial or complete Liquidation of one of my largest assets;

b) Change and upgrade my role in the business;

c) Retire from staffing after closing and maybe do something else;

d) Create an exit plan for yourself over a few or several years;

e) Gain access to capital for growth-from someone else's pocket;

f) Play the game on a higher level, with more responsibility;

g) Other (describe):

After completing this questionnaire if you need help putting your answers to work in an exit plan call Bob or Sam for a free consultation.

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