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Thread: Buy other PW businesses or market more

  1. #1

    Buy other PW businesses or market more

    Is it worth it to buyout other cleaning businesses, or would it be better to put the money into marketing to expand into a new market?

    I have been contacted by a few PW businesses this year looking to sell. It is interesting to see the differences in these businesses: how they are set-up, their equipment, procedures/processes (if any), gross and net incomes and how much they feel they are worth. Below are the basics of each:

    Biz 1 - Profitable business that specialized in decks with a good mix of residential and condos/HOAs. 13 years in business. Detailed procedures, employee handbooks, good website and reputation, 150K gross revenue, customer list of 1500+ with detailed records and bid sheets, marketing materials, quality equipment, 1 employee may be able to transfer over, etc. Asking price was $20-35k not including equipment, but could be included in sale for a negotiated price.

    Biz 2 - Property services company ranging from mold remediation, contracting services, crawl space work and residential exterior cleaning. 12 years in business, owner operator, subpar pw equipment, no procedures/protocols, 95k gross sales in 2015, $16.5k in washing sales, list of 304 washing customers and about the same for other types of customers. Asking $80k for entire business, or $60k for the exterior cleaning side of the business (remember this part did $16.5k in sales last year, but according to the owner, has the potential to be a $1 mill business with all of the dirty roofs and homes in the area...it's everywhere! Do radio and TV ads and you'll be rich in no time.)

    Biz 3 - Part-time pressure washing business with a mix of fleets and other commercial. No accounts or contracts, subpar equipment, $40k gross last year...asking price of $40k for everything (basically equipment that would collect dust.)

    It just amazed me the different realities everyone lives in. The first business definitely was a solid business and has great potential, but the others had me scratching my head. So my thought was even if a business was a quality one like the first one, would it be easier to just use the asking price money (or part of it) to market the new area and gradually build a good customer base, or buy the customer list and work with the old owner to have a smooth transition with the customers. I'd think even with complete support from the old owner, I could probably bank on losing 20-25% of the customers during the merger because their trust was with the owner, not the business.

  2. #2
    The latter two are just about the fantasy of every service business I have looked at. The first guy is more realistic if his site ranks well.

    I think acquiring an existing business is the way to go if its solid and you can pay a good price. You can easily dump $30k+ and a few years with SEO and advertising getting a new startup area established.

  3. #3
    Good point about the time it would take to establish a new area Ken.

  4. #4
    Prestige Member Guy B's Avatar
    Join Date
    Oct 2007
    Location
    North CAROLINA
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    4,003
    I agree with Ken....#1 looks the best....but I have a problem with the numbers....150k yearly "Gross"? From an established company of 13 years?....$20-$35k asking price with no equipment?....maybe its me, but that doesn't seem like a good value. I mean all those numbers look very wrong........But sure makes me feel real good about ours....real good.

    Jason, if you don't mind sharing....what's the plan? PM me if you'd like.....I'm thinking about expanding into another market myself, but I'm bringing our brand with us.
    Pressure Kleen L.L.C.
    Power Washing Service
    Tar-Heel N.C. 28392
    Guy Blackmon 910-876-1594

    House Washing Fayetteville N.C.
    Pressure Washing Fayetteville N.C.
    Power Washing Fayetteville N.C.

  5. #5
    Quote Originally Posted by Guy B View Post
    I agree with Ken....#1 looks the best....but I have a problem with the numbers....150k yearly "Gross"? From an established company of 13 years?....$20-$35k asking price with no equipment?....maybe its me, but that doesn't seem like a good value. I mean all those numbers look very wrong........But sure makes me feel real good about ours....real good.

    Jason, if you don't mind sharing....what's the plan? PM me if you'd like.....I'm thinking about expanding into another market myself, but I'm bringing our brand with us.
    stay out of Charlotte

  6. #6
    Dave or Guy, buy me out please
    William
    Chuck Norris can believe it's not butter.

  7. #7
    Hero Member
    Join Date
    Feb 2012
    Location
    Western NY
    Posts
    416
    If after 13 years I am only doing 150K gross, I am going to pack it up, burn it down and buy a boat.

  8. #8
    Hero Member
    Join Date
    Apr 2011
    Location
    WARRINGTON PA
    Posts
    564
    We are opening up another location in West Chester pa. and will be closer to you Jason if you need any help or have some jobs closer to us now. Thanks and give me a call if you want to talk
    Rolling Suds Inc.
    Brian Wendling
    Power washing in Pa.
    Roof Cleaning in Pa.
    http://Rollingsudsinc.com

  9. #9
    Brians got the idea.
    Innovative Pressure Cleaning
    Cream Ridge NJ 08514
    innovativewash@aol.com
    609-738-3100

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