Should You Buy a Cleaning Business? House Cleaning Startup or Franchise?

Should I buy an existing house cleaning business,
and how much should I pay? That’s the question we’re going to answer
today. Hi there, I’m Angela Brown and this is Ask
a House Cleaner. This is a show where you get to ask a house
cleaning question, and I get to help you find an answer. Today’s show is brought to us by which is a 360 view of the perfect home. If you’re looking for a house cleaner, or
you’re looking for a window washer, or a carpet cleaner, or someone who services the home,
you can find that person on If you are a business owner and you have a
business that services the home, and you’re not listed there, run over and grab a listing
so that as we send people over there they will find you. All right, on to today’s session, which is
from Mario, who wrote in and he wanted to know: “I’m ready to buy a business, but I’m
curious what questions should I be asking the owner, and how much should I pay?” Okay, so Mario this is for you. My question to you is, why do you want to
buy someone else’s business? Is it because it’s flourishing and there are
a whole bunch of things that come along with it that will keep you from reinventing the wheel? If that is the case, then those details need
to be negotiated and hashed out. But for the most part, here’s what I see. I see house cleaners getting out of the house
cleaning business and they want to sell their client list. Well, a client list is not worth very much because customers pay us for the most part per cleaning. So it’s not like you’re buying a year’s worth
of contracts that already exist, that are already paid for. Now, if the client has customers on a retainer
and they’ve paid a year in advance, that is a different story. But for the most part, people go clean a house
and they collect a check the same day. And so there’s no loyalty whatsoever. The loyalty is, “Oh, my house cleaner that
was cleaning my house is now gone. Instead of the new guy coming in, I could
give him a chance. Or I could just pick a new cleaner of my own choosing.” And that’s often what happens. If you buy a business, if you’re buying an
existing clientele list it’s really not worth very much money because there’s no guarantee
whatsoever that customer will stay loyal to you as the new business owner. The relationship was with the previous house cleaner. Not you. The next thing is, is there a territory that’s
associated with this? If you buy a franchise they will assign you
a territory, and so you are only allowed to clean in that territory. When you buy a franchise they guarantee you
no one else from that company marketing in your area. However, here’s the catch, when you buy a
franchise they are guaranteeing you that no one from that company can come in. But they cannot guarantee that independent
house cleaners will not come in and compete with you in that marketplace. And so what are you really buying? Are you really buying a territory? There could be 35 other independent house
cleaners that are in that same area that are marketing there, and there’s nothing you can
do about that. Are you paying for the exclusivity? Because if you are, that might be something
you want to rethink. If you’re buying a franchise, the concept
is that you’re buying an existing training program. Here’s where buying a franchise actually makes sense. If you are buying a long-term, well known
business that has a great business name, and it’s got great business reviews, and they
have a marketing plan that’s already set up that’s on a national level, that includes
websites and social media and all that stuff. You don’t have to reinvent the wheel for that. And for that there’s a very hefty price for
you to jump in and buy an existing business. But if you’re buying it from an independent,
chances are they probably have a crappy website. They probably have crappy social media, and
that social media is connected to them. It’s based on the friendships that they’ve made. So even if you buy the business you’re not
buying their friends. You’re not buying their likes and their shares. What you’re buying is a client list, or maybe
set up with a training program. Is there a training program in place? That’s one of the things that you have to ask. If you’re buying an already existing training
program that might be worth the price. But, are you going to have to instill the
program? Or does it already exist, and are there already
employees? If you’re buying already trained employee,
and let’s say that there are 15 or 30 people that already work for this company, that’s
something that’s worth the money. For you to go out and find 30 new people that
you trust, and then train them all, and get them all up to speed, and know their reliability
and who works well with who, that’s going to take a lot of time and that’s going to
be costly. If you are able to buy that already then,
booyah! That might be worth it. If you’re thinking about buying a business,
how much are you willing to spend? It’s going to come down to your price, it’s
going to come down to your budget, and it’s going to come down to your operating capital. If you have 30 people working for you, boom,
all of a sudden that you didn’t have yesterday, do you have the resources in place to hire
a manager in order to manage those 30 people? If you wake up one day and you have 30 call
outs, or you have 15 call outs and you’re not able to meet your workload, now all of
a sudden you’re doing a lot of customer service with customers who are expecting cleaning
and the cleaning never happened. If you’re buying a cleaning business is it
a residential cleaning or is it a commercial cleaning business? Commercial cleaning contracts are easier to
sell than a residential service, for example. If you’re going to start out, and you’re going
to go rebuild all of these new relationships, you might as well just do that from scratch. That saves you a whole lot of money, and a
whole lot of heartache and headache from trying to buy someone else’s existing good reputation
that now you have to live up to. So, it is possible, and how much you pay for
it is going to be entirely up to you. The prices vary all over the board. Now, there are brokers out there who buy and
sell businesses. My suggestion would be to call a broker and
say, “Hey, listen. I’m thinking about buying this business. What is the going rate in my area for buying
a business of this type?” And then give them the specs, and oftentimes
they’ll do the research if they don’t already have it. And they can tell you a really finite amount
of money like, “Here’s how much this business is worth.” And only then can you make a decision on does
that make sense for you. So, good luck, Mario because it sounds like
you’re doing some fun stuff. I love the entrepreneurial spirit. But that’s my two cents for today. All righty. Until we meet again, leave the world a cleaner place than when you found it.

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5 thoughts on “Should You Buy a Cleaning Business? House Cleaning Startup or Franchise?

  1. How did you negotiate buying a cleaning business? Did you do the negotiations yourself or did you hire a business broker?

  2. This is awesome information Angela. I'm very interested of buying an existing residential cleaning business (non-franchise) here in Vancouver, Canada. The company has 3 full time employees, over 100 clients, 8 years in services and very good rating on google. Marketing, payroll and billing system in place. What would you suggest to retain the existing clients after the ownership transfer and do you think this is viable a company to buy? Is there any more info that should know? Thanks very much!

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