🧽 Should you ever consider buying a Cleaning Business?

Ready for your weekly business buying treasure map, business buyers?

This week we have some intriguing businesses listed that are seeking new captains.

Plus don't miss our ultimate guide to sweeping up (pun intended!) that perfect cleaning business.

This week we had 219 new businesses listed.

So today we break down:

• Should you ever consider buying a cleaning business?

• Join us at the EtA Forum in Sydney?

• Plus the 7 most interesting new businesses this week 👇

7 Most Interesting Business For Sale this Week:

Should you buy a Cleaning Business?

When most people think of cleaning, they probably think of cleaning their home, as this is what we are all most familiar with.

After seeing so many cleaning businesses, I have learnt that nearly anything that exists, can be cleaned.

According to Ibis World there are 41,819 commercial cleaning companies in Australia and together they do 11bn in total revenue.

Whilst the pandemic squeezed profit margins as hotels, shopping centres and commercial offices were shut down, there is beginning to be a return to steady growth seen over the last 20 years.

So much so, that revenue is forecast to grow to $13.1 billion through the end of 2027-28.

Starting a cleaning business does not often require a large capital investment so the barriers to entry can be quite low.

This means that the cleaning industry can be very competitive however there are some great advantages that make cleaning businesses very attractive businesses to buy:

Opportunity for Specialisation: As the industry is vast, business owners can carve out niches like green cleaning, medical facility cleaning, or crime scene cleanup, which may offer higher profit margins or less competition.

Recurring Revenue: The holy grail. Many cleaning services operate on contracts or standing appointments. Whether it's a residential client who needs bi-weekly cleaning or a commercial contract that requires daily or weekly service, recurring revenue provides stability and predictability for business owners.

High Profit Margins: When managed efficiently, the cleaning business can have favourable profit margins. Overheads, such as cleaning supplies, can be low compared to the service fees charged, especially when buying in bulk or leveraging economies of scale as your business grows.

Scalability: The business model can be scaled from a solo operation to a vast enterprise, depending on the entrepreneur's ambition. Expansion can be pursued in terms of services offered, geographic regions covered, or niches catered to.

Diverse Clientele: The industry caters to various clients, from residential homeowners to large corporations, schools, hospitals, and other institutions. This diversity can make the business resistant to fluctuations in any single sector.

Consistent Demand: Cleanliness and hygiene are perpetual needs. Even during economic downturns, certain segments of the cleaning industry (like commercial cleaning) may continue to see demand.

Flexibility: Especially for smaller operations or residential cleaning services, there's a degree of flexibility in setting schedules or choosing clients, making it suitable for those seeking a work-life balance.

Resilience to Technological Disruption: While many industries are threatened by technological advances, the hands-on nature of cleaning services means they remain relatively resistant to such disruptions.

Franchise Opportunities: For those not wanting to start from scratch, the cleaning industry has numerous franchise opportunities. These can offer brand recognition, operational support, training, and marketing advantages.

Community Engagement: Cleaning businesses often serve local communities. Owners can establish strong local networks, participate in community events, and become recognised members of their local business ecosystems.

Growth Opportunities: As there are lots of owner operated businesses, there is lots of opportunity to use acquisition as a growth channel to expand your revenue and staff. Plus demand for household cleaning is forecast to increase as dual income families become more and more common.

Cash Flow: Depending on the terms set with clients, cleaning businesses often benefit from quick payments, aiding in steady cash flow.

All of these benefits can lead to high competition in the cleaning industry. This competition can force prices down, meaning that some cleaning businesses can have very low margins.

Wondering what the gross margins might look like in reality? This podcast episode shares the story of George Vallone that bought a cleaning business doing $1m in the States:

What specialist niches are there in the cleaning industry that could be interesting to explore more?

What multiples do cleaning businesses typically go for?

What questions should I make sure I ask when thinking about buying a cleaning business?

Business For Sale around Australia

Ever dreamt of buying your own business but wish you knew more people that are on the same journey?

Join me at the ETA Forum in Sydney on 10/11 September.

Deep Dive classes on Entrepreneurship through Acquisition - specifically designed to accelerate your EtA journey

Plus a full day of networking, keynotes and fireside chats.

I went to this event last year and it’s great to see so many people interested in buying Businesses in Australia.

I can vouch for the really interesting mix of business buyers and investors that you can meet.

Till next Tuesday!
Sam from Business For Sale