You want to sell your payroll company? Then it is good to know what the takeover market in the field of payroll companies looks like. The market is under pressure due to changes in laws and regulations.
Good payroll companies are in demand, but the rules are getting stricter. The number of consolidations is just above average.
There are many ways to value a business. A common method of expressing the value of a business is "a factor x gross annual profit." This factor is also called multiple and another designation for gross annual profit is EBITDA (Earnings Before Interest Taxes Depreciation and Amortization).
In the business services sector, which includes a payroll company, an indicative EBITDA multiple range of 4.6 to 5.5 is currently used, according to the Brookz Takeover Barometer. The average EBITDA multiple across all SME sectors is 4.90.
The valuation of a business is often the starting point for negotiations between buyer and seller. The outcome of these negotiations is the final sales price. So valuation and price are two different quantities. Besides valuation, the price is also determined by possible scarcity in the market, bargaining power of the parties, the strategic value of the business for the buyer and possible synergy effects for the buyer (cost savings, purchasing advantages).
Do the calculation
Do you want to buy a business or sell a business in the business services sector? With this Brookz Sector Monitor, we want to present buyers and sellers with facts, figures and an outlook that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in the business services sector. Because in every buying or selling process, thorough preparation gives peace of mind, overview and structure.
Download report
There are many startups in the market every year, and small-scale organizations, which means that the number of businesses with one person working is relatively high.
In figures, the number of payroll companies looked as follows in 2024(CBS):
With this online training from Brookz you are optimally prepared to largely sell your business yourself: 25 Powerpoint videos, a comprehensive valuation report, legal model contracts, handy templates, checklists and expert support. Plus 50% discount on listing your business on Brookz!
To Brookz Academy
A number of trends and developments will inevitably cause changes in the coming years, but also offer payroll companies many growth and acquisition opportunities:
For SMEs, payroll is an excellent solution, as they can choose their own staff, but still not have to bear the hassle of a permanent employee. On-call and on-call contracts are still the most commonly used form of employment contract in the staffing industry, but this is expected to change. More and more self-employed workers are joining or opting for temporary employment contracts. The demand for employees is there, but the security for employers is anything but, according to Rabobank.
The new Balanced Labor Market Act (WAB) is a challenge for payroll companies. Since 2020, payroll employees are entitled to the same terms and conditions of employment as employees employed by clients. As a result, more costs are involved in a payroll agreement and false self-employment is a thing of the past.
