On average, 4.4 million businesses are started every year. Since the COVID-19 pandemic, there has been a surge in new business start-ups, and that includes franchises. If you’re interested in buying a cleaning business, take a look at how existing businesses compare with franchise opportunities.
Buying a Cleaning Business That Already Exists
If you’re looking at buying an existing cleaning business, here are some things to consider:
1. Understanding the Sale
Find out the reason the owner is selling the business. It might be to retire, or because the family is moving, but it also might be due to a financial issue. If the owner is not forthcoming with the reason, that is a red flag.
2. Evaluating the Financials
The seller should have invested in a notice-to-reader statement or Compilation Engagement Report, which reviews the past two to three years of business income and expenses. The notice-to-reader is based on documents supplied by the business, but they are not an in-depth review of the documents, whereas a review engagement conducted by a chartered professional accountant is more detailed. If you require financing, check with your lender to see which form of financial review they require.
3. Location Details
Whether you are buying a cleaning business at its current location, or moving it to a new location, you need to be aware of the appropriate licenses, permits, and zoning required for operation. Don’t assume the existing business has this in hand because you will ultimately be responsible for any issues once you become the owner.
4. History and Litigation
When you buy an existing business, you also buy its history, and that includes any pending or ongoing litigation. A lawyer can help flag any details the owner may not have disclosed. Of note: Franchises are governed by the Federal Trade Commission , and franchisors must reveal the litigation history to a potential franchise owner.
5. The Customer Base
A healthy business will be eager to provide you with a list of customers and details on how they generate revenue. You may have ideas of ways to grow the customer base, but you need to know what the foundation is you are inheriting with this business.
6. Employee Commitments
Find out if any employees are paid off-book. If so, know what you could be in for regarding tax evasion or back pay if you become the owner. For registered employees, find out how many are willing to remain with changed ownership. If the business is owned by a husband and wife with adult children working in the business, you could lose several people with the transition.
7. Potential for Growth
Do your own research on the cleaning industry — don’t just take a business owner’s word for it. Franchisors have teams devoted to growing the business and attracting customers, so that comes with the franchise package. A non-franchised business won’t have that, so you should gather that information in advance.
Buying a Cleaning Business Franchise
A franchise provides you with a business model that significantly reduces the time and expenses of starting a business from scratch. A franchise also offers benefits that reduce the risk of being a business owner. These include: • A Fresh Start. You start a business with no inherited issues that could derail your success moving forward. • A Good History. Every franchise is required to disclose certain things that comprise the history of their franchise, so you have all the details upfront with no hidden surprises. Merry Maids also discloses average franchise earnings as an important part of this historical information. • Brand Name. An existing business has a name in its region, but a franchise has an established name throughout the country. Merry Maids has 880 franchisees across the United States, and that helps build the value of your franchise as well. The more people see and hear the Merry Maids name, the better the marketing power for everyone in the system. • Support System. When you are a new business owner, there are many things • you don’t know about handling customers, bidding jobs, keeping track of payments, etc. Franchises offer a network through the franchisor and through fellow franchisees. You operate the business independently, but with a built-in support system.
The Merry Maids Franchise Opportunity
Reach out to us about our top-ranking Merry Maids franchise and find out why it could be a better, more stable investment for your future. We will review the cleaning business start-up costs, the marketing strategies, the earnings history, and more. We have a great franchise team and we’re eager to have you on board with us!