How to Sell Your Cleaning Business
Before the coronavirus, the cleaning business was a mature industry with slow growth prospects, as Fortune points out. However, in today’s environment: “Everyone from governments, to corporations, to individuals have a heightened focus on hygiene. And when you have a heightened focus, you have more dollars spent.”
The Center of Disease Control (CDC) has provided cleaning and disinfecting guidelines for cleaning businesses, schools, and other public spaces. The need for cleaning companies has increased because of the cleaning frequency required to protect workers, and high-traffic areas must be cleaned more than once a day.
Many companies are hiring firms that perform disaster and hazardous material cleaning to perform deep cleaning in office buildings and schools. These businesses add to the routine cleaning performed by traditional cleaning companies. Given the time required to approve and fully distribute a coronavirus vaccine, the demand for enhanced cleaning services will continue well into 2021.
Enhance Business value
You can take steps to increase the value of your cleaning business before you start looking for a buyer. Demand for cleaning services is increasing rapidly, but there are some additional factors that will make your business stand out.
Business contracts: If you have contracts in place for commercial cleaning, a buyer can take over the contracts and generate revenue. Long-term contracts are even more attractive.
Brand awareness: Companies with a high level of brand awareness generate more new business and benefit from client referrals.
A unique product or service: A business that offers a unique product or service can differentiate itself from the competition. As an example, the Fortune article explains that electrostatic sprayers are more effective tools for disinfecting purposes. If your firm offers this new technology to customers, you can gain more business.
Purchasers are interested in companies that have a track record of increasing sales and earnings, and particularly businesses that generate recurring monthly revenue.
Putting Systems in Place
The more clarity you have about what you do, the easier it is for a buyer to operate your business. You can gain clarity by documenting each routine task you must complete in a procedures manual. The manual reduces confusion about each task, and serves as a training resource for new employees.
Creating a Procedures Manual
Let’s assume that you use software to generate customer invoices. Your procedures manual explains how to access the software, input data, and how to generate invoices for clients. Everyone on your staff can access the manual, and you should update the procedures manual when/if a procedure changes.
Organize Your Records
You’ll need a number of documents for the due diligence process with a potential buyer. To save time, make sure that you have your records in order before pursuing a sale. You need access to your financial statements for past years, and you’ll need to provide your marketing plan and customer lists. Make sure that you have all contracts and other agreements on file.
Your business broker will insist that a potential buyer sign a non-disclosure agreement before any records are provided.
Automating Your Accounting System
Automation reduces the risk of error, and allows a business to complete more work in less time. Many businesses use spreadsheets and other manual systems to process accounting transactions, but this approach makes it difficult to scale.
Convert to an automated accounting system, and integrate the software so you can download bank statements, and review credit card activity. Use technology to automate the payroll process, which is the most time-consuming accounting task. Automation makes it easier for a buyer to operate the business after a sale.
Assess your Staff
An experienced staff makes the smart decisions that allow your business to grow. Do you have the right people in place to operate the business after a sale? Take a look at your organizational chart, to decide if any roles need to be filled.
You need to set up the business to operate without your involvement. Empower your staff, and offer incentive compensation to motivate workers to stay after a company sale.
You’re busy managing your business, and you can benefit from the guidance of an expert. Work with a business broker who can guide you through the sale process.
Work With a Business Broker
The business brokers at Raincatcher can help you enhance the value of your business, and ensure that you have effective systems in place. They have a network of potential buyers, and they know how to market your business and attract interest.
Valuing a business requires industry knowledge, and Raincatcher has the expertise to value your company for use in a negotiation. When you find a motivated buyer, your broker can help you gather documents for the due diligence process, and negotiate an attractive purchase price.
Your cleaning business is an attractive enterprise, given the current pandemic. Work with Raincatcher to prepare for a sale, and to negotiate a successful closing.