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Buying a business versus “starting from scratch”?

entrepreneurQuestion: Should I buy an existing carpet cleaning business?

Steve’s answer: Buying a carpet cleaning business can be a great way to “kick start” your efforts!

Hi Steve,

I’m thinking about getting into carpet cleaning. Would buying an existing cleaning/restoration business be a better way to go instead of starting from scratch?

Starting Out in Maryland

Dear Starting,

Buying an existing carpet cleaning business can be a good way to cut your growth curve if only because the typical business in this industry (sadly) sells for an absurdly low price. Your gain-their loss!

It’s not unusual to see the entire carpet cleaning business selling for not much more than the liquidation value of the equipment and vehicles. So assuming you want their equipment the customer list, phone number, etc. all comes as a bonus.

Of course, you should exercise “due diligence” and verify the reputation of the business, quality of its clients and the prices that they have been charging before you buy. In other words, do you even WANT the type of clientele that the business has attracted?  (You’ll find that many carpet cleaners are great people but don’t remotely have a clue on how to profitably price their work.)  But buying an existing business is definitely an option worth checking out.

NOTE: HERE is a Carpet Cleaning Business Valuation Sheet. It is designed for our members who are selling their business. But you could use it to judge if a company is priced farily. (Be sure to get competent professional financial and legal help before making any final decisions.)

Steve

P.S.  Also many business sellers will finance much of the purchase price and at very favorable rates.  So don’t be afraid to negotiate.  Frankly speaking, you should be in the driver’s seat simply because many of the carpet cleaning businesses for sale out there are not moving real fast.  Like everything else in business- it is a supply and demand equation!

One other suggestion, Starting.  Honesty (if not self-interest) compels me to mention that as a new prospective carpet cleaner you should attend our Strategies for Success seminar right from the git-go BEFORE you buy anything.  SFS provides a great industry  orientation For example…

Jon Fields with RestorePro in Sandusky, OH attended SFS years ago while his very first machine was being installed at our Roselle facility.  The man had NEVER TOUCHED A SCRUB WAND!  Read what happened to Jon as an industry “new boy”!

HERE are some Frequently Asked Questions about SFS. And HERE are more SFS Member Profiles.

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