This commercial cleaning business has been operating since 1960. And on paper, it looks incredible.
It’s listed at $802K, with $229K in cash flow on about $885K in revenue.
After running it through the BizHub calculator with standard SBA terms, you are left with about $112K a year after debt payments.
That is strong cash flow for only about $82K down.
This business has been around for 65 years with recurring commercial clients and an experienced team already in place.
DSCR comes in around 1.95, which is comfortably above lender minimums and gives decent cushion on the debt.
You also recover your down payment in under 9 months, which is attractive for a service business.
The seller is also willing to stay involved during the transition and provide introductions to clients and vendors.
The problem is the pricing.
You are paying a 3.5x cash flow multiple in an industry that averages closer to 2.4x.
That is roughly a 45% premium over what cleaning businesses typically trade for.
And the margins do not justify it.
This business runs at about 26% margins while the industry average is closer to 32%.
So you are paying above-market pricing for a business already underperforming its peers.
And one important detail buried in the listing: the 11,600 square foot facility is not included in the sale.
You would be leasing the building from the seller.
The BizHub score lands around a 6.1 out of 10.
The foundation is definitely solid - long operating history, recurring clients, experienced staff, and stable demand.
But you are paying a legacy premium, and the upside depends entirely on improving margins the current owner never achieved.
Good business. Questionable price.
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