Deal makers, not deal takers: How smart funding fuels a better recruitment business

Written By: Chris Slack, Director; The Finance Consultancy

Selling your recruitment business is a pivotal moment that defines your financial future and professional legacy. Unlike placing a candidate, which is quick and tactical, selling a business is strategic, long-term, and involves multiple stakeholders buyers, lawyers, funders, and advisers.

You're not facilitating the deal.

You are the deal.

Many owners turn straight to private equity (PE), but focusing only on equity can mean losing control, culture, and long-term value. A smart exit requires understanding both equity and debt options and having a specialist adviser to guide you.

Selling a Candidate vs. Selling a Business

Candidate placements are shortterm and fully in your hands A business sale? It’s complex, requires funding strategy, and must appeal to multiple parties. You’ll need to evaluate options like trade sales, PE, management buyouts (MBOs), or employee share ownership plans (ESOPs) each with different funding implications.

Why Working Capital Matters: Pre-Sale

Optimising working capital can boost your valuation and reduce deal risks. Smart solutions like invoice financing or flexible credit lines help you:

• Smooth cash flow and reduce overdraft reliance

• Strengthen your balance sheet

• Prove financial discipline to buyers

• Avoid last-minute liquidity surprises

Debt vs. Equity: Know the Trade-Offs

• Debt Funding

• Retain full control and ownership

• Suitable for profitable, cashflow positive firms

• No equity dilution or outside influence Equity Funding

• Brings in capital but dilutes your ownership

• Involves external input and potential cultural shifts

• Can enable growth but changes your role

A specialist adviser helps assess your goals and risk tolerance, models the outcomes, and structures a deal tailored to your situation.

Pitfalls to Avoid

• Recruitment-focused PE firms that apply cookie-cutter strategies may minimise the pool of potential buyers.

• Foreign buyers offering inflated multiples with hidden risks.

• Generic brokers who market your sale without tailoring your exit plan

• The Value of a Specialist Adviser?

• Explores all funding options not just equity

• Connects you to trusted funders

• Negotiates terms that protect your future

• Prepares your business to attract the best buyers

Final Thought: Smarter Structure, Better Outcome

Debt keeps you in control, speeds the process, and preserves your upside.

Combined with strong working capital strategies, it can lead to a cleaner, more rewarding exit.

Don’t just take the deal make the right one. With the right guidance, you’ll walk away with more than just a number you’ll preserve your culture, your control, and your legacy.