Cleaning Company: Need Help With A Bid

[CPisHere]

Crazy thing happened today, a guy I sent an email to like 4 months ago contacted me and wants to sell his current porter business. It is not his main job and doesn't have time to really manage it. He was 3 employees and 21 properties he maintains and he personally owns 6 of the properties in which he said he would extend the contract to me no problem. He has 1 year contracts in place and has had these clients for 5 to 6 years. No debt and no real assets. All he has is 21 contracts and 3 contract employees.

Has anyone ever put a valuation on a business like this? 1.5 X Revenue? He will send me all the details (p&L, budget, contracts) next week. PS I may start a new conversation for this.

I bought my cleaning business for a 0.7x multiple of annual EBITDA. 1.5X of revenue is WAYY too high for this type of business. You should be looking at 1-2x of EBITDA.

1x if things are stable/requires owner involvement regularly, which it sounds like.
2x if things are growing & management is in place.

 

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[rafaelmcalle]

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