Cleaning Up with the Sale of a Janitorial Services Business in California
No matter what the time or situation, janitorial services are often in demand, in California and elsewhere. In light of the events of 2020, even more companies are outsourcing their janitorial and cleaning services to professional companies. Now may be one of the best times for selling a janitorial services company in California.
Here are some of the reasons why, and some of the things you should be prepared for.
The Demand for Professional Janitorial Services
Cleanliness and sanitation have always been vital to the safety, security, and comfort of both employees and customers, but its importance has become more vital lately. Companies that previously had internal departments have also turned to outsourcing this important job.
And like in other industries, the riches are in the niches. While national companies do get some large contracts, smaller companies who specialize in certain regional areas or focus on certain industries do extremely well.
As demand increases, so does opportunity. With that additional opportunity, it may be that your business is worth more than you think it is.
The Value of Your Business
That’s the first place to start. Before you do anything else, you will want to know the value of your business. Knowing what it is worth is the first step in making good decisions about the timing of selling your business.
And that’s an important thing to consider. It usually takes six months to a year to sell a business, so if you see yourself selling your business anytime in the next couple of years, starting with a business evaluation can help you know where you are right now.
You do have choices. On our website, we offer seven steps to valuing your business, and email program that walks you through the business valuation process using a spreadsheet. This program introduces you to the process of selling your business and helps you understand the paperwork other financial items you will need to effectively value your business.
When you need a certified business valuation, we can help with that too. This gives you a tool to set the purchase price of your business, and to prove its worth if your buyer needs to get financing to buy your business.
The foundation of any plan to sell your business is an accurate business valuation.
Equipment Valuation
As a janitorial business, you have equipment you use in your day to day operations. That equipment can be part of the sale of the business, but it does have an influence on the price of your business and how the sale is structured.
There are a lot of tax implications to how this works out, and a business broker along with your accountant can help you understand how this will work for you, and the best way to reach a compromise that will satisfy both you and your buyer.
The first step is to determine the value of your equipment. It is also important to evaluate if it is up to date, or if it needs to be updated or replaced before you sell your business. For example, you may have vans or trucks that are nearing the end of their commercial usefulness in California. It may be worth replacing those vehicles to increase the value of your business. Alternatively, you could sell them apart from the deal, and sell the business without them.
Whatever method you choose, and whether or not you should make updates can be a difference between a successful sale and a deal that doesn’t go through. Your business broker can help you make those decisions.
The Growth Potential of Janitorial Services
One thing a buyer often looks for in a business is the growth potential. If you have a good business, but it is not growing, it is harder to sell. However, a business that is increasing in value and business volume means a buyer will be able to reap their ROI much faster.
The potential growth in California janitorial business services was already high before the recent pandemic, and with demand higher than ever, so is the growth potential. When run properly, this type of business services industry can be incredibly profitable.
This can have an impact on the intrinsic value of your business, the amount that a buyer is willing to pay beyond simply the numbers in the business valuation. This is an important element to understand and to share with your potential buyers.
Advantages of a Certified Business Broker
There are several reasons you should not try to sell a business on your own. First, you need to know the ins and outs of selling a business, what the market looks like right now, where to find buyers and other things that a business broker already knows.
Secondly, selling a business takes a lot of time. It can be almost a full-time job. But you still need to run your business while it is for sale, keeping it profitable and keeping your customers and clients happy, your employees managed, and your finances in good shape. Your business broker will handle the sales process so you can keep doing what you do best, and running your business.
In addition, a business broker has sold many businesses like yours. This may be the only time you ever sell a business. They know the steps you need to go through to sell your business, and how to help you overcome any hurdles you may encounter during the process.
Are you ready to sell your California janitorial services business? Feel free to contact us today. We look forward to hearing from you because we want to be your business broker. Check out the other businesses like yours that Rogerson Business Services has sold in the past.
Now may be the best time to sell your business. We’re here to help every step of the way.
