When writing these numbers, many people will think, “That’s silly. A house cleaning business can’t make me $500,000 per year.” If you believe that, you’re going to hate what you’re about to read.
Let’s look at the number of houses your business would need to clean daily to net you $500,000 per year.
1. If your net income is 30% of the gross business income (this number is probably high but we’ll go with 30% for now), your business would need to bring in about $1,750,000 per year in gross income.
2. There are 260 working days in a year. $1,750,000 divided by 260 working days equals $6,730 a day. Your gross business income would need to be $6,730 per day.
3. An average house cleaning is about $150 in our area. That comes out to 45 homes cleaned per day.
4. To clean that many homes, you would need a minimum of 23 employees working for you. They would each have to clean 2 homes per day.
5. You would need 450 customers having their homes cleaned every two weeks to have 45 cleanings per day.
6. I have 400+ customers in my window cleaning business. I went from 100 customers to 400 customers in six months using postcard marketing. So getting 450 house cleaning customers is very doable.
7. With the right marketing, you can get to 450 customers fairly quickly. Adding two new customers per work day would get you to 450 customers in about one year.
8. Profits will also be lower than expected, as everything is always harder than expected.
But just for fun. What would you do with an income of $42,000/month, $500,000/year? You better be investing like a bat out of hell or it will get wasted.
How to sell your cleaning business for $1,000,000 (The cliff notes version)
* Obiviously I’ve never done this so call it an educated guess
* You can’t be working in your business when you sell it, if you want to make $1,000,000. Nobody will pay $1,000,000 for a job.
* Make sure you can get at least a million dollars for the business after all sales costs, otherwise grow the business larger.
* When someone buys a business for a million dollars or more, they are buying an investment. An income stream. The last thing they want to do is run a business. Running a business is a job. No one is going to pay $1,000,000 for a job. Hence, you have to not be working in the business when you sell. Someone else must run it for you.
* That’s actually good news. Your goal is to reach the point where you are making amazing money but not working in your house cleaning business, at all. Even better than blogging.
* The value of a service business (like a house cleaning business) is two to five times its annual income. The market value of a cleaning business which earns $500,000 a year might be $1 million. With a cleaning company that earns $1,000,000 per year in net income, a buyer might value the business at $3,000,000, or 3 times the annual income. I got this information online. You can look this up yourself, if you’d like.
* Believe it or not, there are many people that have that kind of money to invest in a growing, profitable business.
* If it were me and I wanted to insure that I made $1,000,000 on the sale of my cleaning business I would aim to get the income higher to say $750,000. It will feel good to have a cushion when selling.
* Who to sell to: If it were me, I could contact the largest residential house cleaning businesses in the U.S. and Canada (or your country) by mail, letting them know you have a very profitable business you’re selling. That should lead to a sale fairly quickly.
* With these dollar amounts on the table I would hire an attorney that specializes in business sales. Look nation wide for the best. It will be well worth the money. Better safe than sorry.
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