A loser with potential: Resurrecting a healthcare temp agency?

June 27, 2025

by a searcher from University of Virginia-Darden - Darden School of Business in Charlottesville, VA, USA

Asking the crowd for some wisdom on this. We are in talks with the owner of a temporary healthcare staffing agency. The company has over 30 years old is in the mid-west. The founders got ill and decided to sell in ~2020 after two years of losses. The current owner has not been able to bring it back to profitability. He has implemented some technological improvements and attempted to secure long-term contracts, with mixed success. The owner thinks that they may be able to break even by Q3. We're looking at different structures (the owner is open to anything). Here is one scenario we are thinking about: Current numbers: Revenue 2024: ~$2.5M Net Income: -$150k Timeline Year 1: stabilize the business; analyze current strategy Year 2: make it profitable Year 3: at least $5M in revenue and 3% Net Income ($150K). Year 4: Acquisition 4x EBITDA at the time (the right, not the obligation). Another scenario would be to work out a management fee and equity stake for our work. Would love to hear any ideas on this scenario.

Reply by a searcher
from Baylor University in Hampton, VA, USA

This is concerning… ###-###-#### was Covid and healthcare staffing firms were making hey! If they had losses then, there’s got to be some fundamental issues with the business model. Would be curious to see pricing and terms along with their staffing focus (nursing, sub specialty care, anesthesia, etc?) Also, the reimbursement landscape has changed significantly since then broadly speaking which impacts contracting. I would want to be very confident in the turn around strategy and financials before getting too far into this one.

Reply by a professional
from Boston College in Baltimore, MD, USA

A couple items to consider: (i) temp/staffing firms were hit by a wave of FLSA class action litigation in/around the down period you describe -- moving to FLSA compliant structures made some of these firms unprofitable for a variety of reasons; (ii) explosion of recruitment process outsourcing companies during this period further eroded margins and has made many smaller staffing companies less profitable; (iii) technology/AI is moving so fast in this space that even if new owner has made improvements...likely still way behind; and (iv) did the key recruitment and client relationships leave with the prior owners or a prior key employee? Good luck! Go Hoos!

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