[Moderator David@stives]

Hi

I am looking at buying a local office contract cleaning bussiness on Monday.

I think they are looking for about £20k

What questions should I be asking and what level of turnover should a business of that value be producing.

This will be a new venture to compliment my window business.

All comments gratefully recieved

Thanks


Dave

[BDCS]

Take the books to your accountant and ask them, they will be able to tell you and if they won't show the books they have something to hide and walk away

[Moderator David@stives]

BDCS

It is a client of my accountant who is selling up.

 maybe i will take them to another accountant

[steve doyle]

yes,

I would be suprised if your accountant could look at them anyway, conflict of interest/professional ethics?

best to get an independant.

[PHILC]

i am selling my business if your interested but i am based in plymouth

[Mr H]

i am selling my business if your interested but i am based in plymouth

Thought you were based in Exeter.....?

[PHILC]

i am selling my business if your interested but i am based in plymouth

Thought you were based in Exeter.....?

there are quite a few variations of supreme cleans around this area we arent affiliated to the supreme clean in exeter
i think they are SUPREME CLEAN LTD where as we are Supreme Clean South West Ltd

[adrian@abbey]

I bought £15k's worth of cleaning contracts 3 yrs ago and it gave me £52k's worth of revenue to my business.

[heritagecleaning]

£60K a year turnover with a decent profit.

How long have each of the contracts been held? Is there a standard written contract? For how long? Does it renew automatically? What are the 'get-outs' for the customer at any given stage? Are the customers happy?- talk to them all. Why is it for sale anyway?

Plus ask yourself - if you put half of that figure, i.e. 10K into marketing, could you build a better business yourself?

[Ian Rochester]

Dave,

You're asking the question the wrong way round, you should find out the turnover, operating profit, stability of contracts, TUPE issues, capital assets, goodwill, liabilities, etc, then ask what it should be valued at.

There are too many variables to say, he wants £20K, what should I be getting.

[Moderator David@stives]

Hi Guys

Well had the meeting.

Turnover for the last 3 years were £45k £50k and £42k last year.

Gross profit last year was £13'600, biggest costs being staff.

Now heres the bit i am a bit concerned about , the hourly rates are £9.95 for some   £8.95 for most and one customer at £7.50 an hour.

All staff are part time and on minimum wage.

All the customers are head offices etc, for small to medium size business.

All equipment is included which i reckon is worthless anyway.

The person is selling as she is over retirement age and wants more time for the family.

So all she is really selling is goodwill.

What do you think ?
DVE

[Moderator David@stives]

Supreme

Email me with details.

Can you also give me a clue what the average hourly rates are here in the Southwest

Dave

[PHILC]

best thing to do is give me a ring on 07989973776 for a chat cheers Phil

[PHILC]

Supreme

Email me with details.

Can you also give me a clue what the average hourly rates are here in the Southwest

Dave

depends on the job or contract but i definately wouldnt be charging anything less than £9.50 an hour

[steve doyle]

18 months to get your money back seems to long to me.

I would of thought 6-12 months should be more realistic, so too expensive at 20k in my mind.

Only a thought and not a guide as i dont know the office cleaning game.

seem expensive based on profits to anyone else?

[Ian Rochester]

Dave,

Find out what the local competition are charging

[Paul Heath]

Hi dave if you want give me a ring sometime got an idea you might be interested in rather than buy. Why not set something up on your own as we get a lot of enquirys down your way and i don't have the staff etc to go that far www.pjcleaning.biz

[poleman]

David, no way does office cleaning pull in the same hourly rate as window cleaning

You have to take on a lot more staff to get a good profit as the margins are a lot closer, my ex office manager (John) use to run a office cleaning business, and he said it was a night mare, staff being, sick, late, not doing the job right, the list was endless, he said the best day was when he sold it and all the invoices that are always a month behind, paid up!

Saying that; some office cleaning contracts have the window cleaning bolted on 

Andy

[Moderator David@stives]

Thanks guys

Paul and Supreme i will give you both a ring sometime this week.

Dave

[turneylogan]

Just sold the customer base of my domestic cleaning business (which, I know is different to commercial contracts).

The goodwill of the company is only worth what someone is willing to pay as there is obviously no guarantee that customers will stay (unless contracts are in place?)

In order to get cutomers to stay you need to be offering as good a service if not better.

I would look at it from an advertising viewpoint. How much would I need to spend, over what period of time, and with what effort, to build that particular income.

You can also assume what percentage of customers would stay with you and work back from that so see if it looks worthwhile.

You may also find that the price is just a starting point for negotiation.