How to Buy a Carpet Cleaning Business
As an entrepreneur decides to open a new business, there is a choice to be made: start from scratch or buy an existing business. When it comes to carpet cleaning, purchasing an existing business is an attractive choice: one-stop shopping for equipment, employees and customer base. However, Jacquelyn Lynn, author of "Start Your Own Cleaning Service," says that despite first impressions, a business buyer must perform his due diligence to be certain the existing carpet cleaning business is the right match. She recommends that prospective buyers follow these steps before purchasing a carpet cleaning business.
Other People Are Reading
Instructions
-
Carpet Cleaning Business Due Diligence
-
1
Ask why the business is for sale. It could be as simple as the owner wanting to retire, or as dire as a pending lawsuit. Confirm the information by asking others close to the business and by checking the business's records.
-
2
Inspect the financial records for at least three prior years (assuming the business has been operating that long). Compare the findings in the company's books with the tax returns for the same years. Make sure there are no discrepancies.
-
-
3
Observe the work crews in action. Would you be able to manage these employees? Also, speak with current customers. Find out how they feel about the carpet cleaning service they are currently receiving. Ask for feedback on how receptive they would be to a new owner. What changes would they like to see? What changes would upset the current customer base?
-
4
Hire a professional, such as a lawyer or CPA (certified public accountant), familiar with purchasing small businesses to help with negotiations.
-
1
Tips & Warnings
Until a contract is signed, you can walk away from a deal without penalty. Before purchasing an existing carpet cleaning business, weigh the cost of starting a new entity, either as an independent operator or as a franchisee.
