Do you think of selling your cleaning business? Perhaps you are looking for a new career or a shift in your livelihood. Maybe your company is in a downturn and you want to escape as soon as possible. You might even want to retire.
No matter what position you are in, there are things you should think about and questions you must answer before you move forward. Continue reading to find out the best ways to successfully sell a cleaning company.
There are a few things you need to do in order to make your sale a success. Here are some items you should have on hand. These tips will help you determine the selling price or value of your cleaning business.
You should also figure out overhead costs and accounting ledgers. You should also round up any current or pending contracts. This includes any service or longevity contracts.
Also, you will need to identify all assets such as cleaning equipment, vehicles, and office materials. You should make a list of all the types of contracts that you use. There are two types of contract inventories you will need: one for small contracts and one for large ones.
People who are looking to invest in or purchase a cleaning company will prefer to have a large number of smaller contracts than a few big ones. Customers will also be important to them. In addition to listing your salesperson, or sales team members, let them know if any current employees are staying. If so, how many?
You need to know the value of your cleaning company before you can sell it. Determine your net income.
Your net income is $100,000 if your business earns $300,000. You must figure out the salary of a potential owner who won’t be working in your business.
The net income will be reduced to $50,000 if they pay the person they hire to fill your place. This is called “free cash flow” and it can be either $100,000 or $50,000.
Now, you need to look back three years to determine the “free cash flow” for each year. It’s important to see if it has gone up or down. It’s also important to determine why it fluctuated in any way. This will help you sell your business quickly.
This will give the potential owner a clear picture of the business’s current and future direction. You should give the potential buyer good reasons for why your net income or business has dropped.
You’ll also need to explain to them why the business is growing and how it can improve. Explain to them how your business has grown each year. If you are ready to negotiate, it is a good idea to ask for ten times last year’s net revenue. You could also read up on negotiation techniques .
Part of your pre-planning has already been completed. You can sell the company at whatever price you want. This is not what you should do. It is important to determine the company’s value before you attempt to sell a cleaning business.
The goal is to maximize your profit while maintaining a competitive price in the market. These calculations can help you determine the value of your company and the price at which it should be sold.
These numbers can be summed to get the average. 650% of your equity is owned by you. 450% of your income is determined by you. You should also use 80% of your net sales and 70% for annual revenue. Once you have the numbers, add furniture, equipment costs and other assets to get a rough figure. You can then go from there depending on your market.
You can find out the market for cleaning companies by doing some internet searches and asking other owners of cleaning businesses in your area what their opinions are.
It is crucial to know your best exit strategy. It is crucial to know your best exit strategy.
Is liquidation right for you?
Before you can begin to plan your exit strategy for selling your business you need to determine if liquidation is the right option for you. If so, what type of liquidation would be most effective. There are two options for liquidating your cleaning company. Either you can do it quickly or take several years to downsize.
It’s possible that you are in a position where it is necessary to shut down your business and get rid of everything as soon as possible. If you are a sole proprietor, this is most common. You should consider re-strategizing the business to put it in a position to sell first.
Don’t forget that liquidating your business will result in a lower ROI (Return on Investment). Consider all the contacts you have made in this industry. All those relationships that you’ve built over the years are now gone.