Field Notes: Cleaning Up with a Service Business

A Commercial Cleaning Company Sure to Delight Any Acquisition Entrepreneur

I found an acquisition entrepreneur favorite: a service business. This commercial cleaning business looks like a promising opportunity with solid cash flow in a thriving regional market. The asking price seems a tad to the high side, but the profitability, operational setup, and market position might warrant a deeper look for the right buyer. Focus on contracts, staff retention, and the potential to expand services.

Financial Overview

• Asking Price: $1,200,000
• Cash Flow: $300,000
• Gross Revenue: $820,000
• FF&E (Furniture, Fixtures, & Equipment): $25,000 (included in asking price)
• Inventory: $10,000 (included in asking price)

Business Operations

• Location: Polk County, FL
• Industry: Commercial cleaning
• Established: 2013
• Employees: 12
• Facilities: The sale includes the business website and owner’s contact number.

Analysis

Valuation and Price Justification:

• The asking price of $1,200,000 is roughly 4 times the annual cash feels a little bit high for a service-based business, even with established clientele and low overhead.
• The price includes some tangible assets (FF&E and inventory) and intangibles like customer relationships and operational know-how.

Strengths:

• Established reputation and client base in a rapidly growing region
• Diverse clients across various commercial sectors, reducing dependency on any single industry.
• Minimal owner involvement needed with current operations, providing flexibility for a new owner

Risks and Considerations:

• The cleaning industry is highly competitive, with barriers to entry relatively low, which could affect long-term profitability and market share.
• Reliance on subcontractors for specialized services might affect profit margins and quality control, though it also offers expansion potential.

Market and Location:

• Polk County is the fastest-growing county in Florida, suggesting increasing demand for commercial cleaning services as businesses and institutions multiply.
• The business’s established presence and excellent reputation provide a solid foundation for capturing new clients in this expanding market.

What do you think? Check it out and let me know!

About: Silverwave Field Notes combs through and analyzes thousands of businesses available for sale that may be of interest to entrepreneurs looking to acquire an existing business. We are not affiliated with the business listed for sale unless otherwise disclosed.