Would You Buy This $2M Cleaning Business?

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Today’s story: A buyer pursues a $2M commercial janitorial business that looks too good to be true.

Oh, and one more (massive) thing for all of you before we dive in…

NUMBERS

Every week, we put a real small business deal under the microscope, straight from our community of buyers. Together, we break down the numbers, the story, the opportunities, and the risks.

This week’s target: a commercial janitorial company generating about $1.6M in revenue and $500K in SDE.

The sellers are two partners:

The deal came through a referral from the buyer’s banker, an off-market opportunity with clean books, long-term contracts, and essentially no advertising.

All cleaning work is subcontracted to 1099 crews, coordinated by a single office manager who runs the day-to-day. Contracts are 1-3 years, auto-renewing, and written so that if a client exits early, they owe the remaining contract value.

The seller has already turned down higher offers, preferring a buyer who’ll protect employees, customers, and the company’s reputation over a quick PE flip.

The buyer, Brad, spent decades in pharma and biotech manufacturing, leading large operations. After years of making others rich, he’s ready to build for himself:

His plan is to assemble a holding company of 5-10 service businesses with strong systems and culture:

Now the question is…

Is this deal the start of a Main Street empire or a polished floor hiding deeper cracks?

KEY IDEAS

When a deal looks too good to be true… it is until you prove otherwise.

Brad’s deal had everything buyers dream of: Clean books. Loyal clients. Zero marketing. An owner who isn’t drowning in issues every week. Even he admitted it:

Instead of rushing to close, he used the deal review call to stress-test his assumptions, and what came out was a crash course in due diligence beyond the numbers, highlighting green flags and areas to dig deeper.

The company’s contracts aren’t just recurring, they’re reinforced. Most run 1-3 years, automatically renew, and even include early-termination penalties. That level of protection means steady, predictable cash flow, the kind of stability banks and buyers love.

The majority owner already turned down higher cash offers, telling Brad he’d rather sell to someone who’ll keep his people and clients happy than hand it off to private equity.

For buyers, that mindset can be gold. It often opens doors to mentorship, better terms, and a smoother transition.

Third-party validation, especially from a lender known for its SBA expertise, goes a long way toward moving a deal forward.

The majority owner previously built a statewide janitorial giant and sold it, then reentered the market to help former clients after his non-compete expired. That’s a rare advantage: immediate operational expertise and credibility with clients baked into the deal.

Brad’s background gives him a natural edge in landing high-spec cleaning contracts like hospitals, labs, and manufacturing facilities, where margins and retention rates are high.

And as for areas to dig deeper…

The community agreed his lender is “easy to work with” and “moves quickly,” but several coaches reminded him that’s their diligence. He still needs his.

One of the biggest potential red flags came from a veteran owner:

“In commercial cleaning, you can have 250 to 300% employee turnover. And if you give those 1099s any training or direction, they can be considered employees, especially in certain states.”

Translation: high churn and misclassification risk can blow up margins fast. The takeaway was clear: scrutinize how crews are paid, trained, and replaced.

INDUSTRY

The janitorial business might not make many headlines, but it quietly cleans up.

The U.S. janitorial services industry includes about 63,000 companies, employs over 1 million workers, and generates roughly $73 billion annually. The average provider operates from a single location, employs 17 people, and brings in $1.2 million a year in revenue.

It’s also a highly fragmented market: the top 50 firms capture 28% of industry revenue, leaving enormous room for roll-ups, regional players, and local acquirers.

Roughly 80% of industry revenue comes from non-residential cleaning. Think: offices, schools, hospitals, and government buildings. That’s recurring, predictable, and less seasonal than residential work.

According to DealStats, janitorial companies typically sell for a median multiple of 2.16x SDE, with most deals falling between 1.25x and 2.75x.

Brad’s offer? Roughly 3.3x SDE on $500K in earnings, above the median, but not unreasonable for a company with clean books, sticky contracts, and a seller willing to mentor post-sale.

THE BOTTOM LINE

With the right people around him, the buyer turned a spark of opportunity into a true swing at ownership.

He didn’t coast into this one. He showed up to 64 live calls, posted questions and feedback dozens of times, and spent many hours dissecting and negotiating the details until he worked the deal.

As he said after signing the LOI:

Three months later, that curveball connected. The seller chose him over higher cash offers, financing cleared, and the deal closed.

As Brad put it, “Success isn’t solo. You need sharp people, fast feedback, and real connections. Build your dream team, move with urgency, and let the momentum punch through the barriers, both real and imagined.”

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