Buying an existing Window Cleaning round is a great way to expand your business or to kickstart a new business, but much like buying any business, due diligence is needed to make sure you know what you're getting.
There are a few things to look out for when buying a Window Cleaning round, including the cost, frequency, age, method, and location. Below these are broken down in more detail.
Please note, the scope of this article is not to cover the legalities of buying a business, but rather to give the uninitiated a peek behind the curtain of the Window Cleaning world. Our hope is that this article helps you ask all the right questions, so that you can make an informed decision when buying a Window Cleaning Round. We recommend getting advice regarding transfer of ownership and GDPR regulations before committing to any purchase.
How Much Should I Pay For a Window Cleaning Round?
Perhaps the most common question on this topic is; how much should I pay for a Window Cleaning round? Most sellers will ask for a multiple of the monthly turnover. On average rounds are sold for 3-5 times the average monthly turnover. That said, as with any business - the price is not always reflective of the value you'll get from that business, nor is it indicative of the profit made from that round. Also worth taking into consideration is the context, if a seller is asking for 6-9 times the monthly turnover, but the round is well priced, in a good compact area, with long standing customers - then this might be a fair valuation and worth the investment.
You can quickly work out what the local 'going rate' is with a search of online forums/ facebook groups, where sellers regularly advertise.
As with any sale, the price is always negotiable, and the amount you pay for a business may make sense to you even if it doesn't to others. If you've ever seen an episode of Dragons Den, you'll notice where Dragons are happy to negotiate if they think the business fits in and adds value to their existing portfolio.
Pricing Structure
Often rounds are advertised for sale as a multiple of their monthly turnover, not taking into account the profit made on that round. If a round is made up of underpriced jobs, the turnover might look good but you will quickly find yourself with no money left at the end of the month, particularly if the location and distribution of the work is less than ideal.
Making sure that the work is appropriately priced is a difficult thing to do, and short of visiting every single job, requires a level of trust with the seller. Some buyers choose to work alongside the existing Window Cleaner for a few jobs to get an idea of the type of work included.
Payment Method
How the payments for each customer are setup is often a good litmus test for the general organisation of the round. If the round is organised neatly into a spread sheet, with each customer setup to pay by direct transfer or via a direct debit service such as GoCardless - you can bet this is a well organised round.
However, if you've got 300 customers paying cash, organised with a Bic pen and a prayer, this might indicate there's some work to do.
Apps and softwares to help organise customers and payments are now commonplace in Window Cleaning, there is no excuse for a sellers work to be an illegible maze of notes and memory. An organised round is easier to transfer, easier to manage and is always a good sign of a well managed business.
Round Age
The context of the work places a huge bearing on how reliable the work is likely to be. How long the Window Cleaner has been cleaning the round and the reason for selling the business are important things to know.
A customer that has had the same Window Cleaner for 20 years is going to be more loyal than one that changes every few months. Of course, most rounds will have a mixture of long term and short term work but look out for whole rounds that have been built in the last few months, it's not unusual for Window Cleaners to canvass work then attempt to sell it for a profit, and these rounds will experience a high drop off rate.
Round Distribution & Location
With rising fuel costs, this has never been so important. The distribution of a round in simple terms refers to how spaced out the work is. 10 houses on the same street are preferable to 10 houses in 10 different towns. An ideal round is centred around a few core locations. As a window cleaner is to make as much of your time as possible chargeable. By this I mean reducing the time spent doing things that nobody is paying you for, such as commuting between jobs.
A compact round that is close to home will save you time and money in the long run. Going back to the 'Price' section of this article, a Window Cleaner will often advertise a business sale at a multiple of the turnover, with no mention of the actual profit it makes - this is where you need to do the maths and make a judgement of how much actual value it adds to your business.
Cleaning Method
How the current Window Cleaner goes about their day will set expectations of the new Window Cleaner. Many customers are resilient to change and so it's important to know the methods used by the existing Window Cleaner.
If the seller is exclusively using a traditional cleaning method, and you plan to exclusively clean them with pure water, then you will want to plan for a drop-off as you communicate to the customers the change in technique.
Mass converting of a customer base from one technique to another can be time consuming and throw up roadblocks, so it is important to know this before negotiating a final price.
Precautions
Whilst not exhaustive, the above considerations will leave you with a healthy overview on what a Window Cleaning round/ business looks like, however - here are some final recommendations we have to protect yourself with any purchase.
Document the Purchase with a basic contract and receipt - To some this will go without saying, however for many Window Cleaners the informal nature of the work means that paperwork is never completed (and therefore there is no record!). You may even choose to itemise what has been purchased and at what point.
We recommend getting in writing that the seller cannot contact customers for a period of time. Legally and financially it will be difficult to enforce, but having it in writing will act as a deterrent and often reveal a sellers intentions.
Staged payments instead of a lump sum - Paying an agreed amount upfront and the balance after a period of time gives you time to complete the work, communicate the change with customers, and accommodate any drop-off (see below). If the entire amount is paid up front, you may find the seller is not motivated to troubleshoot any problems as they arise.
Agree an 'acceptable' level of work drop off - As the existing Window Cleaner communicates a change of service, some customers may use this as an excuse to cancel, having an agreed level of drop-off that is acceptable (5-10%) will help to keep this within acceptable limits, any more than the agreed amount and you will need to re-negotiate the price.
Commercial work or contracted work - Contracted or commercial work is likely to be the most difficult and uncertain. The customers contract is with the existing business and so they are unlikely to care that you have 'purchased' the work. It's important to ensure that the customer is happy to switch and that the contract is not about to expire/ go out to tender.
--
Head to our Starting a Window Cleaning Business Hub for more helpful guides
