Have you ever thought about purchasing a cleaning company? Doing so can be a very fruitful venture and one that compared to other types of businesses, can allow for a world of flexibility and variety. But what should you know before making a purchase? Below we have listed three points which you should check off before making the wholesale rubber glove order.
Are Contracts in Place?
When looking to purchase a smaller cleaning company, it is crucial that you look closely into the status of the company’s current contracts. Contracts which will be carried over and continue after you purchase the company are an extremely valuable asset and will help you to hit the ground running once you take over. On the other hand, if the current clients could all potentially leave at the moment you take over, do you have enough of your own customers lined up in order to compensate for those who might leave? How will you cope with the sudden drop in business? When looking into potentially buying a company, you are free to ask the current owner for a list of their contact information but they do not have to comply. That said, be sure to take any unwillingness to cooperate or be transparent with you as a sign and a reason to possibly reevaluate your interest in the company. After all, although not essential, if a company’s clients are all to go elsewhere, what are you really getting for your money?
How is the Company Run?
If you are looking at buying a larger business then conducting a thorough evaluation of the company’s operational systems is paramount before any final decision is made. After all, at a company with a larger number of employees, clients and maybe even premises, the efficient running of the company, with all aspects of the organisation pulling in the same direction is detrimental to ensuring the company continues to function in desirable manner. The best way to do this is to ask if you can spend a day as a fly on the wall in order to get a better understanding of what works well within the company and what may need working on when you take over. To cover all of your bases you may want to look over the current company training and standards manuals to see if the current information and instruction is in line with your own standards and ethics.
Review the Company Books
As is important before going ahead with buying any business, large or small, taking the time to have an in depth look at the company’s books (usually the past six months) is highly important and will not only show you how the company has been performing in recent months but will also provide an indicator of how well you can expect the company to perform under your management. No matter the size of the company you should always take the time to analyse ledges containing information about daily, monthly and yearly sales patterns, a long with all expenses. Using this data, you will be able to create ash flow projects and will be able to better understand if the cleaning company will generate enough money as you desire.
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