What Is a Staffing Agency Worth?

Most staffing agencies sell for roughly 1.8x to 3.3x Seller's Discretionary Earnings. Agencies weighted toward direct-hire placement and specialised niches reach the top of that band. Commodity temp agencies competing on spread sit at the bottom.

Gross profit, always. Revenue in staffing is mostly pass-through wages, so a revenue multiple is close to meaningless. Buyers work from the spread between what clients pay and what temps cost, then value the earnings that spread produces. An owner quoting billings rather than gross profit signals inexperience immediately.

It shapes the whole deal structure. Temps are paid weekly while clients pay on thirty to sixty day terms, so the buyer inherits a permanent working capital requirement. Expect detailed diligence on receivables ageing and collection history, and expect the funding arrangement to be negotiated as a core deal term rather than an afterthought.

There is no single average, because price tracks earnings rather than revenue. At the midpoint multiple of 2.5x SDE, staffing agencies at $500,000 of SDE sell around $1,275,000, and at $1,000,000 of SDE around $2,550,000. Typical SDE margin in this category runs near 20% of revenue, so a staffing agency doing $1,000,000 in revenue would often carry about $200,000 of SDE and land near $510,000.

Take your Seller's Discretionary Earnings and multiply by 1.8x to 3.3x. Where you land inside that band is decided by owner dependence, customer concentration, recurring revenue and the quality of your books. A staffing agency at the top of the range looks materially different from one at the bottom, and most of those differences can be improved in the twelve months before a sale.

SDE multiples of 1.8x to 3.3x apply to owner-operated staffing agencies. Once earnings pass roughly $1M to $2M of EBITDA the buyer pool shifts to private equity and strategic acquirers, and pricing restates onto an EBITDA multiple of 4x to 6.5x. The two are not comparable: SDE includes the owner's compensation and EBITDA does not, so the same business shows a higher SDE multiple than EBITDA multiple.

Typically 6 to 12 months from going to market to closing, assuming financials are ready. Staffing deals live or die on working capital. The agency pays its temps weekly and gets paid by clients in thirty to sixty days, so the buyer must fund that gap from day one. Structuring who funds the payroll float is usually the hardest part of the negotiation, and it should be raised early rather than at closing.

There is no formula unique to staffing agencies. The method is the same one used across small business sales: recast earnings into Seller's Discretionary Earnings, then multiply by the industry band, which for staffing agencies is 1.8x to 3.3x. Three valuation methods exist in principle. The income approach, applying a multiple to earnings, is what nearly every real transaction uses. The market approach compares against recorded sales of similar businesses and works as a cross-check. The asset approach values equipment and inventory and generally sets a floor rather than a price.

Yes. The calculator on this page applies the same 1.8x to 3.3x band used throughout this guide, adjusted for owner dependence, margin quality and business age. It takes five inputs and returns a market range rather than a single figure, because real transaction prices move with deal structure and buyer type.

A market valuation estimates what a buyer would likely pay and is what you need to decide whether to sell. A formal appraisal is a certified document prepared to a defined standard, and is normally required only for litigation, divorce, estate and tax matters, or an SBA loan on the buyer's side. For planning an exit, a market valuation is the right instrument and is far cheaper.