Large Commercial Cleaning Co, 85% Recurring Revenue

Business Overview

5 Star Rated Commercial Cleaning Co

Growing at over 25% per year with a 28% Profit Margin and 85% in Recurring Revenue

The revenues in 2021 were 2,524,679 with earnings of 709,097. 2021’s revenues were 56% higher than 2020’s with the earnings up 59%. The business has a 28% Net Profit Margin with 85% recurring revenues made up of auto-billing that currently totals 170K/month and grows every month. The company is being offered for 2.45M. This is only 3.45 times the 2021 earnings. This is low for a low capitalization, fast growing, home-based, 85% recurring revenue company with a multiple that will get smaller every month as this business continues to grow.

This business is growing with less than 2% of the revenues being spent on marketing. Most of the growth is “organic” through word of mouth and online searches. Every month shows growth on the top and bottom line which means that the business will not change the day of the closing. He has a manager who handles the subs, quality assurance, scheduling, customer relations, etc leaving the owner to focus on finding, talking to, and bidding for new customers.

The business works the front range of Colorado from the Wyoming border to and including Castle Rock which contains over 70% of the population of the entire State of Colorado. This is a high-end, high quality service company that is 85% commercial cleaning along with all other custom commercial facilities management. They have subs that provide HVAC, Plumbing, Electrical, Maintenance, Light Construction, etc. They also do specialty cleaning for COVID, construction site cleaning both during and after construction, and mold mitigation. They clean virtually all types of commercial.

85% of their revenues are an auto pre-scheduled regular cleaning service for office buildings which have a monthly auto-billing making this a very valuable recurring model. Their model gives them a big advantage over most of their competition because they use crews as needed and not full-time employees. They have access to 45 different crews totaling over 80 people many of which have special skills like HVAC, Plumbing, Polishing, Maintenance Services, etc. They don’t have to worry about an employee quitting, being on vacation, testing positive for Covid, etc. This is one of the reasons that they are a 5 star Google-rated company.

“Crews” are individual companies that are common for cleaning companies. The company is home-based and can be based anywhere from Castle Rock to Ft Collins. The “crews” have been and will stay loyal to the company because of the consistent workflow and long-term relationship.

The business has a customer base of 61 recurring customers which creates a strong base of revenues of 170K per month through auto-billing which is over 2M per year in recurring revenue. 2M is which is 76% of the total 2021 revenues of 2.52M but there is a lot of other work done for current customers which is considered recurring also totaling 85% of total revenues. The recurring revenue has consistently grown and is very valuable to the owner. Jobs are both bid and negotiated and priced by the square foot and/or custom bids. Many commercial buildings now offer the opportunity for cleaning companies to “bid” their services directly on their websites but most want to meet the owner onsite for a walkthrough. This business also maintains a virtual office in Boulder and another in Denver for online marketing purposes and to meet with customers if they can’t meet at their location.

Location: Can be located anywhere on the Front Range of Colorado being a home-based business. They service the front range from Castle Rock to the Wyoming border and everywhere in between.

Sales Price: The sales price is 2.45M and INCLUDES everything. Please call Jeff at 303-905-7607 or email questions to jeff@businessbrokercolorado.com.

Details

Although the vast majority of the revenues come from commercial cleaning, they offer all forms of building maintenance and repair. Their model works with major brands which the owner can explain. The list of facilities they service includes professional office buildings from small to very large, apartment complexes, churches, financial services, multi-tenant office buildings, retail locations, transportation hubs, spas, manufacturing, schools, medical, and much more.

This company uses “crews” which are typically Colorado LLC’s made up of well-vetted, well equipped, very skilled, and insured workers. The Crews use their own equipment and cleaning materials and meet all requirements to do the work that they are contracted to do. The owner does this for many reasons but the main ones are that the cleaners make more money and by owning their own vacuums and equipment, they take better care of them while saving money by only using/paying them when they are needed. The crew are made up of cleaners who are bonded and insured. The new owner does not need any industry experience and needs no special licenses or permits. The Seller will train the new owner for as long as needed.

The company has a focus on high-end quality customer service and is very responsive to customers’ needs. They offer a satisfaction guarantee, returning to fix any job if need be. They also have an 5 Star Google Rating and A + Better Business Bureau rating.

Marketing and Advertising: They specialize in “modern” less expensive and more efficient growth. They don’t do TV or Radio but does have a Facebook and LinkedIn along with a Website and some SEO.

Growth Potential: This is a company that needs a hands-on owner to take calls, service customers, sell, and perform the bids in person. The new owner doesn’t have to change anything. The company has no salespeople because most of its growth comes from customer referrals and online “clicks”. The owner states that his franchise has untapped opportunities.

Location: The location is in the owner’s house and can be anywhere along the Front Range since the cleaners and customers don’t come to an office.

The seller will offer full warranties and further states there are not any legal or other issues of any kind that they are aware of that are pending. This is a turnkey profitable business. The model is just waiting for a new owner to step into it.

Plus, Colorado is the best State in the country to own a business based on Denver’s consistent growth and the increasing wealth of its population.

Thank you for your interest in this business.

Jeff C Eisnaugle
Business Broker Colorado, LLC
Direct 303-905-7607
Fax 720-524-6482
jeff@businessbrokercolorado.com

This is prepared by Business Broker Colorado, LLC. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections. The information contained in this e-mail message is confidential and may be protected from disclosure. Please be aware that any other use, printing, copying, disclosure or dissemination of this communication may be subject to legal restriction or sanction.

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