Selling a Commercial Cleaning Business in Florida
A Guide for Florida Business Owners by Patrick Archer, MBA, CBI, CM&AP | Florida M&A Advisor | Calder Associates of Florida | 305.763.4112 (Mobile) 407.499.2855 (Office)
Selling a Commercial Cleaning Business in Florida
Selling a Commercial Cleaning Business in Florida is an important decision for owners of these essential business in the Sunshine State. Owners contemplating selling a Florida commercial cleaning business must weigh the pros and cons of selling the business. Retirement is the primary motivating factor for most owners, while other owners may be planning to pursue new ventures in different industries.
Regardless of the motivations, sellers of commercial cleaning businesses in Florida will want to package and price the business to stand apart from competing listings and attract potential buyers. Many of these buyers are looking to take ownership of a successful business in Florida and tap into the positive demographics, population growth, median household income and other trends benefitting Florida small business owners today.
Timing Considerations When Selling a Commercial Cleaning Business in Florida
If you are the owner of a successful commercial cleaning business in Florida, now could be a great time to take advantage of these trends and the rising demand among U.S. and international buyers for great businesses for sale in Florida that are established, profitable, “essential” in the eyes of local governments, and resistant to external pressures like recessions and online retailers.
Selling a Commercial Cleaning Business in Florida today can also help Florida sellers command top dollar considering the supply and demand imbalance of available commercial cleaning businesses in Florida post-Covid-19. While the pandemic wiped out thousands of small Florida businesses in sectors like restaurants, gyms and beauty salons, Florida commercial cleaning businesses emerged stronger and more attractive in the eyes of their owners, their customers, and potential buyers. The new national focus on sanitation and consumer safety in work, travel and household environments bodes well for these businesses going forward.
The Commercial Cleaning Industry in Florida
The U.S. commercial cleaning business is a $117 billion industry, and Florida commercial cleaning businesses account for approximately $8 billion of that total revenue.
From clothes to homes to office buildings, there is no shortage of things to clean in Florida. Running a retail dry cleaning is a good business model for those who know how to care for fine garments, while mobile residential cleaning services can be found in every major market in Florida.
“The commercial cleaning business is a $117 billion industry in the U.S.”
Janitorial services in Florida are higher-margin business that service schools, offices and commercial properties. Janitorial services account for $50 billion of the industry’s $117 billion in annual sales, and the average janitorial cleaning business posts annual revenue of $837,000. Florida janitorial cleaning companies benefit from year-round demand from both commercial and residential customers who sign service contracts for monthly, weekly, or daily service.
“The average janitorial cleaning business posts annual revenue of $837,000”
Pest control is another important segment of the industry, accounting for $13 billion of annual sales nationwide. Few states have more bugs, pests and invasive species than Florida, so these businesses are another group that enjoy year-round demand from both commercial and residential customers who sign service contracts for monthly or weekly service.
“Few states have more bugs, pests and invasive species than Florida”
The dry cleaning and laundry business in Florida is another segment of the commercial cleaning space where domestic and international buyers can purchase an existing business with an established customer base and solid cash flow.
“The dry cleaning and laundry business is another attractive segment.”
Finally, restoration service companies in Florida are another important segment providing very specialized cleaning and restoration services to homeowners and businesses after major events like fires, floods, hurricanes or other natural disasters that tend to occur in Florida from time-to-time.
Skills needed to Operate a Commercial Cleaning Business in Florida
As in all states, the commercial cleaning business in Florida is highly competitive, and owners of the most successful cleaning businesses have many years of experience and hundreds of satisfied customers who depend on these companies for regular, periodic cleaning of their clothes, homes and businesses; scheduled preventive maintenance for homes and businesses in the case of pest control; and unscheduled, emergency cleaning in the case of restorative service companies in Florida.
Current owners thinking of selling a commercial cleaning business in Florida will want to know that potential buyers of the business have the operational knowledge, managerial skills and financial resources necessary to manage and grow the business for the next generation.
Most buyers of commercial cleaning businesses in Florida will pursue SBA financing, and most SBA lenders will want to see that the buyer has some knowledge or relevant experience in the commercial cleaning industry.
“Florida commercial cleaning companies often focus on residential, commercial or industrial customers.”
Ideally, a future owner of a commercial cleaning business in Florida would already have several years experience as an employee or owner/operator of a commercial cleaning business in their home state or home country.
Many owners of established commercial cleaning businesses in Florida will only consider selling their business to a buyer who has a proven track record of experience in the commercial cleaning industry or a related industry, either as an employee or an owner/operator of the business. Most SBA lenders will view potential buyers through the same lens of relevant commercial cleaning experience and qualifications.
Best Cities For Selling a Commercial Cleaning Business in Florida
For potential buyers open to living anywhere in the Sunshine State, sellers of commercial cleaning businesses in Florida will be competing with other owners of similar business statewide. These buyers will be weighing several factors including a variety of demographic and quality of life metrics that will impact both their decision making process.
Florida’s population of 23 million is spread throughout the state’s 67 counties, but the largest clusters of high net worth households paying top dollar for commercial cleaning services are concentrated in the southern half of the state along a ring of 14 coastal counties on the Atlantic Ocean and the Gulf of Mexico. This “golden horseshoe” of Florida demographics encompasses the 25 Wealthiest Zip Codes in Florida based on Average Gross Income.
“This 14-county coastal region is the Golden Horseshoe of Florida demographics.”
This 14-county coastal region extends from Tampa/St.Petersburg on the Gulf side, south to Naples/FortMyers and down to the Florida Keys, east to Miami/Fort Lauderdale and extends north through the coastal communities of Pompano Beach, Boca Raton, Palm Beach, Jupiter, Stuart, Hobe Sound, Port Saint Lucie, Vero Beach and Melbourne. Some of Florida’s largest and most profitable commercial cleaning companies are located in this 14-county coastal region.
And, of course, no conversation about desirable areas to live and own a business in Florida would be complete without mentioning the Orlando metropolitan area. “The City Beautiful” is one of the fastest-growing metros in the country, and the influx of new residents creates ample opportunities for new and existing business owners.
“With over 2 million residents, Orlando is one of the fastest-growing metros in the country.”
Long known as a tourism mecca and home to theme park giants like Disney and Universal, Orlando’s economy is increasingly diverse. And world class infrastructure improvements like the new $3 billion Terminal C at Orlando International Airport facilitates domestic and international arrivals and intrastate travel with Brightline, a high-speed rail link between Orlando and South Florida metros like Miami, Fort Lauderdale and West Palm Beach.
Median Asking Price of Commercial Cleaning Businesses For Sale in Florida
Once you have decided on selling a commercial cleaning business in Florida, it’s a good idea to work with a licensed Florida business broker to get a better understanding of the current value of your business and a most probable selling price to qualified buyers looking to buy your Florida commercial cleaning business with some combination of cash and financing, either through an SBA loan, seller financing, a bank loan, a leveraged buyout, assumption of debt, or some other mutual buyer/seller arrangement.
According to the Florida database of businesses for sale, the median asking price for commercial cleaning business for sale in Florida is currently $950,000 for existing businesses generating over $500,000 in annual revenue and over $150,000 in annual cash flow.
“The median asking price of Florida commercial cleaning businesses is currently $950,000”
The range of asking prices for Florida commercial cleaning businesses for sale extends from $350,000 on the low end to $2,250,000 on the high end for Florida commercial cleaning businesses generating over $500,000 in annual revenue and over $150,000 in annual cash flow.
Median Annual Revenue of Commercial Cleaning Businesses For Sale in Florida
With the right team of talented employees, good equipment, and an established customer base, commercial cleaning companies in Florida can be great revenue generators for both current and future owners. According to the statewide database of businesses for sale in Florida, the median annual revenue for commercial cleaning businesses for sale in Florida currently is $795,000.
“The median annual revenue of Florida commercial cleaning businesses for sale is currently $795,000”
The range of annual revenue for Florida commercial cleaning businesses for sale extends from $540,000 on the low end to $2,480,000 on the high end for Florida commercial cleaning companies generating over $500,000 in annual revenue and over $150,000 in annual cash flow.
Median Cash Flow of Commercial Cleaning Businesses For Sale in Florida
Established and well managed commercial cleaning companies in Florida can produce significant cash flow benefitting both the current owner and future owners of these businesses.
“The median annual cash flow of Florida cleaning businesses is $296,000”
According to the official database of businesses for sale in Florida, the median cash flow for commercial cleaning businesses for sale in Florida is $296,000. As such, commercial cleaning businesses in Florida enjoy a median cash flow of 37% of annual revenues. ($296,000 / $794,000 = 37%)
The range of annual cash flow for commercial cleaning companies for sale in Florida extends from $175,000 on the low end to $526,000 on the high end for Florida commercial cleaning businesses generating over $500,000 in annual revenue and $150,000 in annual cash flow.
“The median payback period for a Florida commercial cleaning business is 3.21 years.”
Based on these same numbers, the ratio of median cash flow to asking price for existing Florida commercial cleaning businesses for sale is 31% ($296,000 / $950,000) which translates into a median payback period of 3.21 years.
Additional Resources for Selling a Commercial Cleaning Business in Florida
Selling a Commercial Cleaning Business in Florida is a major life decision that requires serious due diligence and sound advice from an experienced and trusted M&A advisor.
If you would like to schedule an initial consultation regarding your Florida commercial cleaning business and potential valuation, please call us at 305.763.4112, schedule a free consultation, or use the contact form below.