Business Overview

This established residential cleaning service has been built over the past decade-plus with one specific target customer in mind – affluent tenants of high-end, multi-family properties in a very specific geographical location. The business has an outstanding reputation in this niche market. The owner has capitalized on that goodwill, along with a reliance on technology, to develop an operation that runs efficiently without the owner’s day-to-day involvement being critical.

Prior to the pandemic, the business was generating nearly $900,000 in revenue and $300,000 in cash flow annually. As expected, 2020 saw a major step back while the business was completely shut down for two months, subsequent Dallas County mandates were very prohibitive, and customers were slow to start scheduling services for several months after restrictions eased. But 2021 saw the business begin the climb back, and the owner expects 2022 to increase even more as more cleaning staff is added. However, historical production and anticipated full recovery were not factored into the value – the asking price is based off current financials. This business has been pre-qualified for SBA financing with a qualified borrower.

For more information, please complete the online non-disclosure agreement at https://sigmamergers.com/nda.

Financial

  • Asking Price: $650,000
  • Cash Flow: $197,721
  • Gross Revenue: $683,341
  • EBITDA: $197,721
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: Yes
  • Established: 2009

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:200
  • Lot Size:N/A
  • Total Number of Employees:13
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

The business only requires a small office space as a location for staff to meet weekly to drop off customer payments and receive their paychecks. The current facility is on a month-to-month lease, but the landlord is open to a longer term arrangement if necessary. It's a secure, keypad entry facility that is used sparingly.

Is Support & Training Included:

The seller will provide training and transition service as needed by the new owner to help ensure a smooth hand-off. The seller estimates this will take no longer than 30 days, but additional arrangements can be made.

Purpose For Selling:

Retirement

Pros and Cons:

While there are a lot of players in the residential cleaning space, including private individuals, franchises and large operations, this company has been able to carve out a very targeted niche in the high-end market of a particular area. This company is the go-to service provider in that specific area, and it is turning away more business than it can handle at the moment.

Opportunities and Growth:

There are multiple different avenues for immediate growth a new owner could take this business, depending on which one, or more, idea he/she chooses to pursue. Adding staff would immediately show results as the business can't currently handle its demand. Other opportunities include geographical expansion to similarly affluent areas with the same type customer base (the business has these requests already), or it could add ancillary services to its core offering, such as dog walking or laundry service.

Additional Info

The venture was founded in 2009, making the business 13 years old.

The business has 13 employees and resides in a building with disclosed square footage of 200 sq ft.
The property is leased by the company for $675 per Month

Why is the Current Owner Selling The Business?

There are all kinds of reasons why individuals choose to sell businesses. Nevertheless, the true reason and the one they tell you might be 2 absolutely different things. As an example, they may state "I have too many various responsibilities" or "I am retiring". For numerous sellers, these factors stand. However, for some, these might simply be justifications to attempt to conceal the reality of changing demographics, increased competition, recent reduction in earnings, or a range of other reasons. This is why it is very vital that you not rely totally on a vendor's word, but rather, make use of the vendor's response in conjunction with your overall due diligence. This will repaint a more sensible picture of the business's present scenario.

Existing Debts and Future Obligations

If the current company is in debt, which lots of businesses are, then you will certainly need to consider this when valuating/preparing your deal. Lots of businesses take out loans so as to cover things like inventory, payroll, accounts payable, so on and so forth. Remember that sometimes this can mean that profit margins are too thin. Lots of companies fall into a revolving door of taking on debt as a way to pay back other loans. Along with debts, there may additionally be future obligations to consider. There may be an outstanding lease on equipment or the building where the business resides. The business may have existing agreements with suppliers that must be satisfied or might result in penalties if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Exactly how do businesses in the area attract brand-new clients? Often times, operating businesses have repeat clients, which develop the core of their everyday profits. Certain elements such as new competition sprouting up around the area, road building, and also staff turnover can influence repeat customers as well as adversely impact future profits. One essential thing to take into consideration is the placement of the business. Is it in a very trafficked shopping mall, or is it hidden from the highway? Clearly, the more individuals that see the business often, the better the opportunity to build a returning customer base. A final idea is the general location demographics. Is the business located in a densely inhabited city, or is it situated on the edge of town? How might the local average house earnings effect future revenue prospects?