How To Sell Janitorial Services – Thinking of selling your cleaning business? Perhaps you are looking for a change in both your career and life? Maybe your company is starting to decline and you still need to get out while you can? Or, maybe you just want to retire.
Regardless of your situation, there are some things to think about and questions to answer before moving forward. Read on to learn the best things to do to successfully sell your cleaning business.
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When planning a sale in advance, there are some steps you should take to ensure your success. Below are the things you need to gather and be ready. These tips can also help you determine the value or sale price of your cleaning business.
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Items such as accounting books, expense reports, and personnel records must be verified. Also, you should collect upcoming contracts or current contracts. This includes service history and/or long-term contracts.
You should also identify all assets such as supplies, cleaning equipment, vehicles and office supplies. List the different types of contracts you work with. You want two types of contract stocks: for small contracts and for large contracts.
Usually, people who buy or invest in a cleaning business want to see many small deals instead of just a few big deals. They also want to see longevity with customers. You should also list your sales force or sales team, and tell them whether or not the existing staff will be working. If so, how much?
Before selling your cleaning business, you need to determine what the company is worth overall. You must prove your net income.
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If your business generates $300,000 in revenue each year and your expenses are $200,000, your net income is $100,000. If the prospective owner does not work in the business and you need to hire someone, you must report. that month.
If they paid anyone they hired, their net income would drop to $50,000. This number is called “free cash flow”, either $100,000 or $50,000.
Now you want to go back three years and determine the “cash flow” after each year. You want to know if it goes up or down. You also want to know why it changes. This will help you sell your business quickly.
When you give this to the prospective owner, they will have a clear understanding of where their cleaning business is going and where they have been. If your business or net income has decreased, you need to give the prospective customer a good reason.
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Also, you need to tell them the reason or ways in which it will change and become profitable. If the business is growing every year, explain to them what you have done to grow. When it comes time to negotiate, you should use the guideline of asking ten times last year’s net income. You may want to take some time to learn negotiation techniques.
You’ve already done part of the work in your first design process. In fact, you can put the company up for sale at any price. However, this is not what you should do. The best way to sell a cleaning business is to carefully determine the value of the company.
You want to offer a fair price and make the best profit to be competitive in the market. You can do some of these calculations to get an idea of the value of the company and what it should sell for.
Find these numbers and average them all. 650% of your equity as an owner. 450% of what you declare is your net income. Also, use 80% of net sales and 70% of annual revenue. Once you get the number, factor in furniture, equipment cost, and other assets, that gives you a ballpark figure and you can go from there depending on the market.
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To find out where the market is for a janitorial company for sale, you should ask other local janitorial company owners for their opinions and search the internet.
Knowing your best exit strategy is essential. Two things to keep in mind: How much money will you get for selling your business and how will you get your money?
As you begin your business exit strategy, you must first determine whether liquidation is right for you, and if so, what type will work best. There are two ways to liquidate your cleaning business. You can do it quickly, or you can spend years downsizing.
You may find yourself in a situation where you need to close up shop and get rid of everything immediately. This is usually done when it is a one person business. However, you need to think about re-strategizing your business and putting it in the best position for the first sale.
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Remember, if you distribute your business, you will get the worst ROI (Return on Investment). Think of all the connections you’ve made in this business. All the friendships you’ve built over the years have been thrown down the toilet.
This is why melting is usually not a smart thing to do. At the very least, you can sell the connections, assets and goodwill you’ve built up with clients to someone willing to jump ship and do the work.
When looking at your exit strategy, you should look inward first. One or more of your employees may want to take over the company. Maybe a family member is interested in taking over? However, if you transfer the business to a family member, there may be complications to consider. In this case, a clean break from the company is for the good of everyone. However, some studies show that there are surprising benefits in working with relatives.
The great thing about selling your cleaning business to one of your employees is that you can take care of them before you leave. You might take some time in a few months and they might shadow you. This will ensure a smooth transition and the success of your company’s future owner.
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Maybe business still means a lot to you after your separation? If so, you may be able to stay as a consultant or advisor. When you sell your cleaning business to employees, you can create a long-term buy-in plan with them. They are proud of the business and are committed to its development, as they currently or soon have ownership in the company.
Consider the ESOP (Employee Stock Ownership Plan). An ESOP is a company stock plan that allows employees to ultimately own the business.
ESOPs are also a great recruiting tool. They increase labor productivity and are a good source of capital. They work well with medium and small businesses, and you can give up anywhere from 1% to 100% of the company when you’re done. You can also sell your cleaning business as an outright purchase to your employees.
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The first way to sell a cleaning company is on the open market. This works especially well if you have a successful business. In this case, it should be a quick process. If your cleaning business is profitable, it will attract buyers in no time.
You can also get additional cash from selling assets and goodwill when you sell your cleaning business on the open market. Keep in mind that if your business is only marginally profitable, it will take a long time to sell. Also, if that’s the case, you might get a lot less than your asking price.
Now is the time to assess some risks. This is optional, and any buyer may want to do their own risk management research. However, it will make the customer happy if you do it for them, and it will also speed up the sales or negotiation process.
With a small cleaning business, you don’t understand much. You need to identify internal and external risks. There are internal risks in things like employee productivity and resource and time consumption. Also, any procedural or infrastructure issues should be part of the internal risk assessment.
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As for external threats, they are usually data-driven. They depend on market competition and economic conditions or the current and future business conditions.
Now it’s time to find a buyer. We mentioned several ways to do this above; however, you may not keep it in the family or sell it to employees. The best way is to use a business broker if you can afford it. Otherwise, there are several websites, e.g
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