6'FIGA ASK ~ "HOW MUCH CAN A MILLION DOLLAR CC COMPANY SELL FOR? ...AND WHERES THE SUPPORTING DATA

Luky

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This is the second time in six years ( what a coincidence, 6 years, 6', that I've been able to embrace all 259 posts of the 6's thread. Since than, I had privilege to join lucky 5% -7% circle of O/O's with great help of GM
( my wife of 32 years) who thought me importance of planning ahead and being accountable for the goals set forth. All that and more resonates in @Six Figure Solo Cleaner, @Steve Toburen comments and valuable contributions of the others. @Spazznout brought some good points also and kept conversation/ debate ( depends on point of view very alive.@shane deubell has a keen eye and says it how he means it. I've realized that times have changed since and chances of selling CC company for good money and I'm not talking 4-5X of its net revenues, are slim to none, regardless of high end area of operation. Just example, there is a company for sale( OO is trying to retire after being in the business for more than 30 years) Asking price 6 months ago was $60K, now is $50 K. Owner claims $85K gross, so $50-$60 K net would be attainable, given the long history of the business servicing area with a median income close to a $110 K.
So, should I talk to broker, snatch it and macro manage it. How deep can I dig, so I won't get burned. Should I offer half and make sure that van and equipment is solid. List should count somewhere in area of 1500. Allegedly,
no jobs under $300 range...
And saga continues...
P.S. None
 

rob allen

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This is the second time in six years ( what a coincidence, 6 years, 6', that I've been able to embrace all 259 posts of the 6's thread. Since than, I had privilege to join lucky 5% -7% circle of O/O's with great help of GM
( my wife of 32 years) who thought me importance of planning ahead and being accountable for the goals set forth. All that and more resonates in @Six Figure Solo Cleaner, @Steve Toburen comments and valuable contributions of the others. @Spazznout brought some good points also and kept conversation/ debate ( depends on point of view very alive.@shane deubell has a keen eye and says it how he means it. I've realized that times have changed since and chances of selling CC company for good money and I'm not talking 4-5X of its net revenues, are slim to none, regardless of high end area of operation. Just example, there is a company for sale( OO is trying to retire after being in the business for more than 30 years) Asking price 6 months ago was $60K, now is $50 K. Owner claims $85K gross, so $50-$60 K net would be attainable, given the long history of the business servicing area with a median income close to a $110 K.
So, should I talk to broker, snatch it and macro manage it. How deep can I dig, so I won't get burned. Should I offer half and make sure that van and equipment is solid. List should count somewhere in area of 1500. Allegedly,
no jobs under $300 range...
And saga continues...
P.S. None
That’s a steal. You will recoup your 60k in no time and it will be an infinite income stream.
 

Luky

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That’s a steal. You will recoup your 60k in no time and it will be an infinite income stream.
So, are you implying that I shouldn't offend seller with a $30-$40 K offer?
I'm trying to think of the reasons why no one get the business already. Do you think that seller might be picky and wants his business legacy to continue with someone he trusts? Or it's a sign that CC companies in the area( more than 200 of them) are either satisfied with what they got, or don't have funds to start process of negotiating . So many variables and even though things may look good on paper, in reality, who knows. There is a interesting aspect to it, company's location is only 15-20 miles away from me ...
My "GM" is saying to slow down, not the opposite. Also, I've been told that the most valuable asset of the company is not a customer base or equipment, but ability to work, therefore health is the highest priority.
 

jtsunbrite

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Luky i sold my business twice, first left arlington tex to go to cali,,, I got 1 1/2 years total gross, went to cali, didnt like it, worked it for almost 2 years, put it on the market for 150k , no takers at that price... The day i left i sold out for 20k , better than walking away empty handed..
You never get what its worth, but if they are not already a carpet cleaner than my guess is they will go broke not knowing how to run a service business.
 
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OxiFreshGuy

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There is a local company here doing $400,000 in sales...but they don't tell you how much they spend in marketing. He runs 5 trucks

I know the truth behind the scenes - 2 of his trucks are completely broken down, over 10 years old. The remaining 3 trucks are all 5 years or older with 6000+ hours on each machine.

I'd reasonably assume 50% of his return customer base will come back without any form of marketing prompt.

That being said, I still wouldn't pay $200,000 for it.

How much would you pay for it?
 
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Anderson

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I bought a OO company when I first started.....
he wanted 30k....with his TM equipment.......

I worked a year and called him later...he was closing the doors..
made about 70k at that time???

gave him 1000$...ONE THOUSAND$ for his customer base...
he wrote all his cutomers recommending me.......

After the first 1-2 year...
1/2 of his commercial accounts dropped me or I couldnt work out a price....
90% of his homes went on to someone else......

But for 1000$ i kept some good commerccial accounts and it got me through the first few years of carpet cleaning......
 
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OxiFreshGuy

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Imagine these franchise guys who pay $40,000 just to own a territory of 100,000 homes
 

Anderson

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This is the second time in six years ( what a coincidence, 6 years, 6', that I've been able to embrace all 259 posts of the 6's thread. Since than, I had privilege to join lucky 5% -7% circle of O/O's with great help of GM
( my wife of 32 years) who thought me importance of planning ahead and being accountable for the goals set forth. All that and more resonates in @Six Figure Solo Cleaner, @Steve Toburen comments and valuable contributions of the others. @Spazznout brought some good points also and kept conversation/ debate ( depends on point of view very alive.@shane deubell has a keen eye and says it how he means it. I've realized that times have changed since and chances of selling CC company for good money and I'm not talking 4-5X of its net revenues, are slim to none, regardless of high end area of operation. Just example, there is a company for sale( OO is trying to retire after being in the business for more than 30 years) Asking price 6 months ago was $60K, now is $50 K. Owner claims $85K gross, so $50-$60 K net would be attainable, given the long history of the business servicing area with a median income close to a $110 K.
So, should I talk to broker, snatch it and macro manage it. How deep can I dig, so I won't get burned. Should I offer half and make sure that van and equipment is solid. List should count somewhere in area of 1500. Allegedly,
no jobs under $300 range...
And saga continues...
P.S. None
Buying a OO carpet cleaning business is not like:
- buying a multi truck managing cc employees....

Many if not most of those customers(especially homes) are only loyal to him.......

If you bought a janitorial company they have signed contracts....carpet cleaners usually have none?????

Unless you are in a small town or one of his family members and know these customers personally.....
they will eventually jump ship!!!!!!

Unless he goes out personally with you for 1 year and works with you you have no garuntees......
 
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ACP

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If your selling it has to be a business and not a job. Nobody in their right mind is going to pay 100k for a job, a physical job at that lol.

If the business doesnt have an established "brick and mortar" location, the value is pretty low.

Best bet to sell that type of business is to make a deal based on a % each year with someone who is just starting in the industry or is already a little established and looking to make a jump to the next level.
 
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Luky

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Buying a OO carpet cleaning business is not like:
- buying a multi truck managing cc employees....

Many if not most of those customers(especially homes) are only loyal to him.......

If you bought a janitorial company they have signed contracts....carpet cleaners usually have none?????

Unless you are in a small town or one of his family members and know these customers personally.....
they will eventually jump ship!!!!!!

Unless he goes out personally with you for 1 year and works with you you have no garuntees......
Just hypothetically, if I have similar personality and feel for the customer needs, I might have a chance, don't I? I got your point, though. I was able to acquire some of the customers, because their " old " carpet cleaner passed away and they were looking for smaller local company, rather than dash& splash type. I'm just thinking out loud. If my phone rings a few times a day, so might his..
If the guy has decided to retire and enjoy sunny days, his customers can't blame him for doing so, he's got right to be happy like the next guy.
 
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Anderson

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ACP and i agree........

It all sounds good on paper, but it took him 30 years to establish relationships with those customers....

AN OO has built everything around himself....

When He goes you have no garuntee of any of his customers sticking around.......
unless you worked for him for 2-3 years and established relations with those customers....

Most of the time those OO businesses are worth only what the equipment is worth plus a very small % of his customers.....

Offer him:
1. What you would pay for his equipment today!!!
2. Find out his profit????...not 80k....probably 40k
3. Offer 5-10% of his profit.

Because only 10% of customers will stay over time.
 
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jtsunbrite

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There is a local company here doing $400,000 in sales...but they don't tell you how much they spend in marketing. He runs 5 trucks

I know the truth behind the scenes - 2 of his trucks are completely broken down, over 10 years old. The remaining 3 trucks are all 5 years or older with 6000+ hours on each machine.

I'd reasonably assume 50% of his return customer base will come back without any form of marketing prompt.

That being said, I still wouldn't pay $200,000 for it.

How much would you pay for it?
I would honestly just use that money and advertise sounds like their equipment is crap
 
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