Succession Planning: How to Get "Big Bucks" from Your Recruiting Firm When It's Time to Leave


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Presentation from the Fordyce Forum 2011, presented by Michael Gionta

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Succession Planning: How to Get "Big Bucks" from Your Recruiting Firm When It's Time to Leave

  1. 1. How to Get Big Bucks for Your Recruiting Firm ….. …When It s Time to Leave! Michael Gionta
  2. 2. Why Should You Listen to Me?Ú  BIG Disclaimer! I m NOT a: –  Lawyer –  Accountant –  Business Broker…. Seek Professional Advice. I Did Transition out of Most of My Business in 2010. ©
  3. 3. Know This First: What s Next?Ú  Full Retirement NOT All it s Cracked up to be!Ú  LifestyleÚ  What are You Doing, What Role are You Playing? ©
  4. 4. How Big Does the Pile Need to Be?Ú Your Number ?Ú Evaluate Different Scenarios –  Partial Employment –  Full Retirement
  5. 5. What I Learned that SHOCKED ME!The Way to Grow a GREAT Business is To Set It UpAs If You Wanted to Sell It! ©
  6. 6. Key Elements That Maximize ValueÚ 5 Biggest Assets to a Potential Buyer 1. Clients look for DEPTH vs. Tenure 2. Employee Tenure 3. Quality of Database 4. Operational Systems/Metrics 5. Goodwill ©
  7. 7. Maximize Your Value Starting NOWÚ  Annual Business Plan –  Better Planned = Higher Valuation!Ú  Employment Agreements –  Offer Letters –  Non-Competes/Non-DisclosuresÚ  Value Added Services –  RPO –  Temporary Staffing –  Consulting ©
  8. 8. Maximize Your Value Starting NOW!Ú Begin to Wean off Your Desk –  Start Delegating Marketing and Recruiting –  Build a real Business •  Become the “Guru” •  Leverage What You Do Best & Train Others How to do EVERYTHING Else! •  Others CAN do It Just as Well as You, Sometimes BETTER! ©
  9. 9. Maximize Your Value Starting NOW!Ú  Have Documented Systems For: –  Hiring –  Training –  Career Path –  Database Management –  Leadership DevelopmentÚ  Have Curb Appeal for Your Office –  Attractive to Employees –  Services Near by (i.e. Lunch, Shopping, etc) ©
  10. 10. Maximize Your Value Starting NOW!Ú  Most People DON T Know/Do This:Ú  Track and KNOW Key Operational Metrics! –  P&L’s going back 5 Years –  Revenue Predictability Metrics Opposing Attorneys will GRILL you On This! ©
  11. 11. Succession PlanningÚ  Again, What is Your Time Frame?Ú  Increase Your Visibility –  In the Recruiting Industry– Write and/or Speak –  In Your CommunityÚ  Potential Buyers –  Family Members –  Employee(s) –  Outsider ©
  12. 12. Succession PlanningÚ Develop MULTIPLE Potential Scenarios –  Identify Internal Buyers –  Identify External BuyersÚ Regardless of Scenario… You NEED: –  Leadership/Management Development Program •  Sell in Interview Process •  Create Career Path
  13. 13. Succession PlanningDocumentation of “Institutional Knowledge” •  Forms (JO, CDS, Ref Chk, etc.) •  Fee Agreements •  Planning Tools ©
  14. 14. ValuationÚ Factors Used to Calculate Business Value (In addition to everything so far) –  Cash Flow –  History of Increasing Sales and Profits •  Will look back 3 to 5 years •  Keep DETAILED Financial Records –  Tangible Assets ©
  15. 15. ValuationÚ The MORE the Owner Self Finances The Higher the Valuation AND the Easier the Sale. –  Downside: •  What if New Owner Defaults? •  What if New Owner wants to Renegotiate? •  Do you want the Business Back? ©
  16. 16. The DealÚ Before You Spend too Much, Get Buyer s Financing ApprovedÚ Plan on 6 to 12 months for TransitionÚ If Buyer is from Another Recruiting Firm, Visit THEIR BusinessÚ Speak with Financial Planner about Using Pension Program as Buyout Vehicle for Employees
  17. 17. SummaryÚ  Define What is NEXT in Your Life.Ú  Whether You Want to Sell or Not, Grow your Business with the Mindset to Sell Your Business to Build a Great BusinessÚ  Measure and Document Everything in Small, Manageable Amounts Over Time.Ú  Systems, Systems, Systems!!! ©
  18. 18. www.TheRecruiterU.comÚ  Free Audio Series at www.TheRecruiterU.comÚ  If you want to Learn More about Systematizing Your Business so It Runs without you… Complete Form or email ©