Steve,
I know this is kind of a vague question but what are some pitfalls to buying out other CC businesses? I am a middle aged corporate manager that has dead-ended in my career. I’m tired of all the company politics and want to do something different. Any “do’s and don’ts” that I should be aware of? What pitfalls have you seen trip up other purchasers of carpet cleaning companies? Thank you for your help.
Excited About Changing Careers in Minneapolis
PS I found this site by accident and it has been a huge help. Thank you all for being so generous with your knowledge. So far Jon-Don appears to be a great company!
The “Biggest Pitfall”, Excited? Many carpet cleaners, (Strategies for Success members excluded!) don’t have the slightest idea on:
1. How to price their services profitably.
2. How to build a “name brand” that has real value.
3. How to build systems into their company that allow it to be easily transferred.
4. How to build customer loyalty to the company by consistently creating Cheerleaders.
Numbers 1 and 4 are by far the most important. You asked, Excited, so I listed the four most common pitfalls. By the way, these four points are exactly what we cover in our “Strategies for Success” seminar which by the way would be a superb industry overview for you BEFORE you buy any carpet cleaning business.
There ARE good carpet cleaning companies out there that can cut years off of your learning and growth curve. I know. Almost twenty years ago I sold one! BUT speaking frankly, Excited, too many carpet cleaning companies that are for sale aren’t really “businesses”. They are a “job for the owner” and not a very good job at that! And who wants to “buy a job”? Come to Strategies!
Steve
P.S. Pitfall #5- Many times, you can’t really believe any of the financial numbers that are presented to you in a prospective purchase and not because carpet cleaners are dishonest. (They are no worse and maybe better than the population as a whole.) BUT, carpet cleaners ARE notoriously bad record keepers and worse accountants. Take all of the “books” you are shown with a grain or two of salt.
By the way, Excited, while I don’t have a Special Report on how to BUY a carpet cleaning company I do have one on how to “prepare your business for a successful sale“. You can use the points in the report as a yardstick to evaluate the companies you look at.
If you’re paying for more than the cost of the equipment it had better be a tight ship with a database of recurring business. Your best bet is to take SFS before you buy the company.
Dan
Fiber Clean Carpet Cleaning of Raleigh
Carpet Cleaning Blog
Yes, take SFS. It will pay you back hundreds of times over. I just took it in September. We’ve been in business since 1991 and I joined my husband in the company 3 years ago. Wish we had taken SFS 10 years ago. Better late then never, I guess.
Most owner operated carpet cleaning businesses just fade away when the owner is ready to retire. I agree with Steve, most of the ones for sale are ones that are not doing well – so tread lightly. Look at it as you would any business you want to buy. Make sure they have good records, written policies and procedures in place, have an accountant review the books, find out why the current owner is getting out of the business. Read the “E-Myth” and look for an privately owned cleaning business that works like that. You may want to explore a franchise since most have the systems in place.
One goal we have for ourselves is to sell the business when the time comes. SFS is helping us to groom our buisness and put the right systems in place to do so.
Best of luck.
Meg
Listen to Dan and Meg. (And not just because they say to attend SFS!) Probably more than almost any area it is “buyer beware” when you are going to buy a carpet cleaning business.
Steve
PS However, once again I will say that there are some great bargains out there in businesses for sale that will save you years of hard work and put you much further ahead on the growth curve. What price can you put on that? Your number ONE question: “Do I want the customers that this company is trying to sell me?”