Deal too good to be true? / What to consider for small staffing agency?

by a searcher from University of Texas at Austin

8 months ago

Hi everyone, I am currently a part time searcher in Texas that is at the beginning of my journey. Through a college connection, I've come across a promising (though small) deal based on the CIM:

- Industry: HR/Staffing Recruiting
- Last 3Y revenue: 225k, 125k,  230k
- Last 3Y SDE: 145k, 80k, 145k
- Absentee: Owner spends 5 hrs per month on the business with two 1099 employees that have both been there 6+ years
- Asking Price: 400k

This is unlikely to be a home run due to the size, but the back of the envelope###-###-#### 5x DSCR has me thinking this could be a pretty promising single to start off my search career. Do you all have any feedback/risks to consider when looking at deals of this size, or in this industry? To me, vetting the 1099 staff is the essential piece to this since they are the operators.



Thanks!

0 likes
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8 comments

searcher from University of Texas at Austin

With a business so small in size, seems like stability might be a long term issue to contend with

1 month ago | like reply | 0 likes

investor

agree, not a bargain

8 months ago | like reply | 0 likes

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