EXIT STRATEGIES

Business for Sale: Rocky Mountain Window Cleaners

An overview of a Rocky Mountain window-cleaning operation offered for sale. Includes the price, how the business was valued, the outlook of future sales, and the pros and cons of the purchase.
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The Business: Are you ready to put a shine on your business profile? This window-cleaning operation, based in a thriving mountain-resort community, may be just what you didn't know you were looking for: a low-tech service business with plenty of non-capital-intensive growth. The industry may not be glitzy, but the potential is crystal clear: this 10-year-old company has positively cleaned up on contracts from such commercial customers as hotels, condominium complexes, and office buildings. Assets include $35,000 to $40,000 worth of trucks, office computers, and cleaning equipment. The business's biggest selling points, however, are its loyal customers and high-quality workforce. The current owner is ready for a career switch, but his dozen or so staffers--who all receive medical insurance, paid vacations, and even profit-sharing benefits for their efforts--should keep the scaffolding up and running.

Price: $439,000

Outlook: It's downright dazzling, given the rapid commercial development that's taking place within this resort region. Thanks to the company's size and its proven ability to service large properties, it should be able to withstand most competition (especially from the typical couple-of-guys-with-a-squeegee operation) to win the community's new corporate customers. The current owner relied on a minimal advertising campaign and word-of-mouth referrals, often from property-management companies with which he'd built strong ties. But a growth-oriented new owner could expand either by servicing commercial properties in neighboring communities or by promoting synergies with janitorial and other auxiliary cleaning services (now mainly pursued during the slower winter season).

Price Rationale: Although this company's sale price was recently reduced, a buyer would need to be fairly confident of a very sunny future to justify a bid near its asking price. Here's why: companies in janitorial and related services tend to sell for about 55% of annual sales, which in this case would add up to nearly $306,000. (The exception might be service businesses--unlike this one--that have a heavy investment in fixtures, equipment, and inventory, or FE&I. Those types of businesses currently sell for four times monthly billings plus FE&I.) Given the industry's traditionally low cost of entry, it would probably pay to bid conservatively on this company.

Pros: With scenery this gorgeous, it's no wonder that all those commercial customers are willing to spend big bucks to keep their windows immaculate. Those profit margins look pretty spectacular, too.

Cons: If this isn't your fantasy of a glamorous, high-visibility lifestyle, invest in a condo and spend your annual vacation here instead. --Jill Andresky Fraser

FINANCIALS
Gross Revenues Recast Earnings*
1996 $504,000 $219,150
1997 $522,000 $195,646
1998 $556,000 $204,544

*Before interest, taxes, depreciation, and owner's compensation.

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Robert Minor or Greg Albrecht at BWB Inc., 970-928-0842.

Last updated: Aug 1, 1999




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