Characteristics of the Owner Dominant Recruitment Agency

M&A Terminology and definitions – Owner Dominant

In the previous article we discussed what "Business Value" means and what does it stand for with reference to a recruitment agency. Now, in this second article of our blog series, we would like to discuss the characteristics of an "Owner dominant" business and its significance in the recruitment market.

In HHMC’s conversations with business owners in the recruitment industry we often use the term “Owner Dominant” to characterise a business and its position in the market.  We are seeking to differentiate from the “Lifestyle” and “Corporate” businesses.

What do we mean when we characterise a business as Owner Dominant?

It is a very positive term.  We are recognising a business that, at its current stage of development, is still strongly influenced by the shareholders, most probably the founders. Importantly, the shareholders are striving to build the best business they can. They are not content with the current state of the business and see a strong future for the business.

Related: Characteristics of a publicly listed recruitment agency

We identify and recognise that the owner has strategic intent, investment strategies and a continuous improvement attitude.

These might be:

• Sustainable size – the business has grown from “single points of failure” to a business with a spread of management, sales and delivery resources.
• Strategic planning – the business can articulate its strategy and can show progress towards the implementation of that strategy
• Investment in management level staff – the business is developing a sustainable next level and next generation of management to reduce the reliance of the shareholders or founders.
• Investment in marketing & sales – the business does not rely on past relationships but has a mature marketing strategy and actively pursues new sales opportunities.
• Investment in new business models – the business is not relying on past business models to be sufficient in the future and actively seeks new business models to provide service to its chosen clients.
• Strong analytical focus – the business measures itself and seeks to continuously improve performance and productivity.
• Seek external input – the shareholders and directors do not assume they have all the questions or all the answers.  They read extensively, travel outside their own region, and seek input on their current performance as well as future options.

In later articles we will define the characteristics of Lifestyle and Corporate businesses.

HHMC Global provides advisory services to the recruitment and staffing industry and is best known for its work on M&A transactions.  HHMC is based in Australia and works with clients globally.  To discuss your business future contact Rod Hore or Richard Hayward.