Payroll bureaus trying to serve everyone lose to specialists. Pick one vertical like construction or nanny payroll, dominate it, and you'll command higher valuations. Alex at Venture proved this by owning staffing contingent labor, then expanding into Hollywood film payroll.
What should we do as independent payroll bureaus and PEO owner bureaus? You know, one of the things I think that we talk about, and you're going to be exhausted, you're going to know, you're going to know right where I'm going with this first one, and that's become irreplaceably niche, man. So Alex, the CEO of Venture, starts in the staffing industry. He uses that to get them big into contingent labor in the early going to get a strong foothold. I've talked to people on his team that now they made acquisitions in the Hollywood, in the film space. They go incredibly niche and they're willing to go deep into and dominate niches. And I can tell you that companies, payroll and PO bureaus that perform well in niches sell at higher multiples. And that's just a fact. And so if you can dominate a specialized vertical, again, we've always gone back to the examples of organizations like ConstructionPayroll.com and there are ones out there. You know, we saw a really big acquisition in the nanny payroll space a few years back. Dominate a specialized vertical. If there's any common thread you pull from every episode of Payrollin', you're going to hear it and again, it's niche down, niche down, niche down.
