3 Year Old Residential Home Cleaning Service Company

High Profit Margin, Expandable Model, and Over 80 Percent Recurring Revenue  

This house cleaning business was started by them in 2017 and has grown from 0 to 211K in revenue in 3 years.  It is 75% percent residential with 25% of the revenues coming from commercial cleanings.  They do regular house/business cleanings, move in/out cleanings, post construction cleanings, and deep cleanings.

The trailing 12 month revenues were 211K with earnings of 86K which is a great profit margin.  2019 revenues were 209K with earnings of 73K.  2018’s revenues were 168K with earnings of 74K.  Both owners work in the business.  She works 37 hours a week doing office work and cleaning if needed.  He works 20 hours a week as a cleaner.  The earnings have been properly adjusted in the add back spreadsheet in the data room below.  

  They currently have 6 regular commercial customers, 57 residential customers on a fixed schedule, and 15 residential customers whom call when they want them to clean their homes.  They rarely lose a customer and have over 80% recurring revenues as a result which is very valuable.  They provide the vacuums, safe and green chemicals, and reimburse their employees for mileage for using their own vehicles.    

All employees are W-2 employees and not subs.  They pay their employees 17 to 18 per hour and charge between 37 to 50 per hour which is why they are so profitable.  They have a 2 hour minimum charge for each cleaning. 

This is a home Based Business with two garages in their complex in Southeast Denver rented for storage and a staging area for the cleaners.  The new owner can set up anywhere Southeast Denver.  Typically these businesses use a storage facility until they get much larger and rent/buy an office with storage.

The sales price is only 150,000.  The sales price includes the equipment and inventory.  This means the business is priced at just over 2 times the earnings.

This business is a great buy based on the following:  Easy model to learn and grow, 80 percent recurring revenues, low cost of capitalization, growing demand and consistent increase in pricing.  THEY HAVE A 40% PROFIT MARGIN WITH A VERY SIMPLE BUSINESS TO MANAGE.  YOU WONT FIND A SERVICE COMPANY THAT NEEDS SKILLED LABOR THAT IS HARD TO FIND WITH A PROFIT MARGIN ANYWHERE NEAR THIS LEVEL.  In other words, these companies are often overlooked but as a business broker who has represented just about every type of business out there, I can’t think of any other business with a simple model that has a 40% profit margin.  Easy to grow and easy to manage.  The owner has a system will allow the new owner to spend the majority of their time growing the business.