Owners of staffing businesses should not run their businesses with the sole of objective of selling it, but must focus on building the best business they can and the buyers will come, according to Russell Clements, chairman of visual analytics company cube19 and recently departed chief executive officer of international recruitment group SThree.

Speaking at a Recruiter event at law firm Charles Russell in London celebrating the success of firms in Recruiter’s 2013 FAST 50, produced in association with mergers & acquisitions advisers Boxington Corporate Finance, Clements told the audience: “Running your business with a view to an exit is fine, but never run it solely with an exit in mind.

“If you do that,” he continued, “then you end up building a business that is not worth buying… what you should concentrate on is building the most exceptional and outstanding business that you can and then people will come and ask you whether they can buy it.” Clements said that this was his experience at SThree, where potential buyers approached the company on the basis of its track record. 

Clements said that only “very very few” of those who left a staffing company to set up another business with the intention of selling it and becoming a millionaire in five years’ time had achieved their goal. “The guys that have done well are those that have focused on building a business that is as good as they could possibly build, and the buyers have come.”

Earlier Tim Evans, managing director of Boxington Corporate Finance, looked back at how the staffing companies in the very first FAST 50 in 2009 had fared. Evans said 24 had continued their growth, 13 had seen revenue decline, 10 had gone through some sort of M&A event, involving either private equity or trade, while three have since gone bust. Only one company from the first FAST 50, Red Commerce, was in the FAST 50 five years later. 

“This tells us that longevity of growth in recruitment businesses is by no means a given, although being in the FAST 50 will improve the chances because there is a strong platform to grow from,” said Evans.