What Is My Staffing Agency Worth in New Brunswick?

New Brunswick's staffing industry sits at an inflection point. The province's tight labor market, driven by aging demographics and interprovincial migration to Alberta, has made skilled recruitment agencies genuinely scarce. Meanwhile, search funds and regional PE groups are actively hunting for staffing platforms across Atlantic Canada to build platforms that can expand into adjacent provinces. If you've built a profitable staffing agency here over the past 10-20 years, you're sitting on an asset that buyers want now. But valuation is not intuitive. A staffing business worth $500,000 in revenue might command a different multiple than one worth $2 million, and buyers will dig hard into your customer concentration, gross margin stability, and whether your relationships survive your departure.

What Drives the Value of Staffing Agencies in New Brunswick

Staffing agencies live and die on recurring revenue. The first driver of your valuation is contract stability: do you have 12-month agreements with key clients, or are they month-to-month? Buyers will model out customer churn and will discount heavily if your top five clients represent more than 40-50% of revenue. The second is margin consistency. Staffing agencies typically earn 15-30% gross margin on temp placements and 20-35% on permanent placements. If your margins have drifted over three years, or if they're driven by a single high-margin vertical that could disappear, buyers will adjust their offer down. Third is owner dependency. In New Brunswick, where relationships matter and business is often built on personal credibility, buyers are deeply concerned about key-man risk. If you're the only salesperson, or if your largest clients demand to work with you specifically, your business commands a lower multiple. Fourth is your employee depth. Do you have a management layer, or are you managing everyone directly? Buyers want to see a team that can operate without you. Finally, contract quality matters enormously. Verbal agreements, handshake deals, or contracts with 30-day termination clauses are red flags. Buyers want to see signed master service agreements with clear pricing, volume commitments, and 6-12 month notice periods.

EBITDA Multiples: What to Expect in New Brunswick

Staffing agencies typically trade at 4-7x EBITDA in the current market, with regional variation. In New Brunswick specifically, you should expect 4-6x EBITDA for a stable, growing agency with diversified clients and strong margins. The national benchmark for well-run staffing platforms is closer to 5-7x, but New Brunswick's smaller market size, lower transaction volume, and tighter buyer pool typically compress valuations by 10-15% compared to Ontario or Alberta. An agency doing $1.5 million in revenue with $300,000 in EBITDA would typically be valued at $1.2-1.8 million (4-6x multiple). Agencies at the top of the range have 3+ years of consistent growth, customer retention above 85%, gross margins above 25%, and demonstrated management depth. Those at the bottom have customer concentration risk, flat or declining margins, heavy owner dependency, or inconsistent financial records. In New Brunswick's smaller buyer pool, competition is less predictable. If multiple buyers are bidding (search funds, regional PE, independent sponsors, or a strategic consolidator expanding eastward), your multiple can push toward 6-7x. If you're selling in a slower period or facing a single interested buyer, expect the 4-5x range.

What Drags Your Valuation Down

• Owner as sole salesperson: If 60%+ of new business comes through you personally, buyers will model 30-50% customer attrition post-acquisition. This typically reduces your multiple by 1-2x.
• Verbal or informal customer agreements: Buyers need signed MSAs with clear pricing, term, and termination language. Handshake deals or email-based arrangements create existential valuation risk.
• Inconsistent or informal bookkeeping: If your P&L is kept in Excel, your customer margins are unclear, or your books haven't been reconciled to tax returns, buyers will slow-walk due diligence and discount aggressively.
• Top-customer concentration: If your top 3-5 customers represent more than 50% of revenue, or if any single customer represents more than 25%, buyers will stress-test attrition. Expect a 20-30% valuation haircut.
• No non-compete or key-person retention: If departing owners or managers can immediately compete or poach clients, deal risk is massive. Buyers want signed non-competes (typically 2-3 years, province-wide) and retention bonuses or earnouts tied to key staff staying.
• Inconsistent or declining margins: Staffing margins compress if you're competing on price or if your bill rates have stalled while labor costs rise. Three years of flat or declining gross margin suggests structural problems and triggers a lower multiple.

How to Get an Accurate Valuation in New Brunswick

Two valuation methods apply to staffing agencies. The EBITDA multiple approach is the most common for buyers today. You calculate EBITDA (earnings before interest, taxes, depreciation, and amortization), normalize it to remove one-time items or owner discretionary expenses, and multiply by a market multiple (typically 4-6x in New Brunswick). Normalization is critical: if you've been running personal expenses through the business (a vehicle, meals, travel, a low-salary family member), you add those back to calculate what a buyer will actually earn. Seller's discretionary earnings (SDE) is the second method, used more often for smaller agencies or those where the owner takes a salary plus profit draw. You add back owner salary, benefits, personal expenses, and one-time costs, then apply a 0.5-1.5x multiple. Informal online calculators are unreliable. They don't account for New Brunswick's buyer pool, don't normalize your financials, and ignore customer concentration or margin trends. To get a real valuation, prepare three years of tax returns, a detailed P&L broken down by customer or service line, a customer list with annual revenue and contract terms, and an explanation of how you calculate EBITDA. Many business owners in New Brunswick work with a local accountant to normalize financials, then engage an M&A advisor to pressure-test assumptions against actual buyer behavior. This costs $2,000-5,000 upfront but prevents a $100,000+ valuation miss.

What Buyers Are Actually Paying Right Now in New Brunswick

Current deal terms in New Brunswick reflect a moderately active but competitive market. Expect 70-85% of the purchase price in cash at closing, with the remainder split between a seller note (typically 1-3 years at 5-7% interest) and an earnout tied to customer retention or revenue targets. A typical earnout runs 12-24 months and might be worth 5-15% of the deal value, usually based on maintaining 90%+ customer retention. Transition periods are usually 60-90 days, sometimes extending to 6 months if you're helping integrate operations or managing a key customer through the handoff. In New Brunswick, where search funds and smaller PE firms are the dominant buyers, negotiating room exists. Search funds are usually more aggressive on price but thinner on cash flow, making seller financing attractive if the buyer has credible founder or equity backer support. Regional PE groups (buying from Quebec or Nova Scotia into NB) often have more cash but are focused on consolidation and may demand deeper discounts if they see add-on acquisition opportunities. Independent sponsors are opportunistic and move fast. The competitive advantage in New Brunswick right now is clarity: owners with clean financials, diversified customer bases, and strong management teams can move deals 20-30% faster and command a 5-10% valuation premium over those without.