Thursday''s Ask the Experts question from a cleaning professional on the International Custodial Advisors Network (ICAN) "Ask the Experts" page: I am thinking of purchasing a janitorial business that would include staff and a number of supervisors, with low attrition of staff, as well as the majority of accounts that have been around for five years or more. The revenue is consistent over time, though the margins appear to be lower than average for this size of operation. My question is, what should I be on the lookout for as I review this business?
In addition to analyzing and verifying all the financial data, I would appraise the nontangible value of the good will. Accounts come and go. If you are serious about the business, visit the largest and most profitable accounts at night (sign a non-compete, non-disclosure contract if necessary).
Determine if any customers are high-maintenance and how smoothly the operation runs. The next step would be to ask the seller if you could go with him on a customer visit. If things are progressing, mention to the customer you are considering working in and managing the business including his account.
Once you have the customer’s confidence, tell him you are purchasing the business. Communicate with integrity, yet remember: A business divorce and re-marriage often functions best ... Gary Clipperton, National Pro Clean Corporation.
To read the rest of this response, click here.