As you work to improve your cleaning business, I’m doing the same thing. Just as you would like to get new cleaning accounts for your cleaning business, I have the same goal.

So, I recently purchased a company that I am planning to merge into my existing company. I thought I’d share some of the pluses and minuses (as I currently seem them) in an effort to assist cleaning business owners who may be considering the same type of growth strategy. Keep in mind that the transaction was completed less than 30 days ago, so I’m not yet able to take a “long-term” view of the accuracy of my projections nor the efficacy of my plans. I’m hoping that years from now, I’ll look back on this as a great decision, but frankly, it may still be too early to tell.

Nevertheless here are the basic details. See if any of these could help you improve your cleaning business!

1. I worked with the acquired company for many years before I purchased it. As longtime readers of my blog will know, I own a commercial cleaning company. For the last several years, we have been subcontracting out the carpet cleaning work that was needed by our clients. I did that because I felt (and still do) that carpet cleaning was a unique “specialty niche” that required a great degree of training, experience and knowledge to be really good at it.

Rather than do an “acceptable’ job in an area that wasn’t my core competency, I opted to subcontract it out to someone who was an expert in the area. Because of this, I knew quite a bit about the company that I purchased that I wouldn’t have been able to be discerned by reading the company’s financials (which I studied carefully).

Because I had an existing relationship with the company I acquired I knew certain things about the company like:

a. Their standards of quality
b. Their rate schedule
c. How busy they were
d. Expertise, work habits and personality of the staff
e. Marketing efforts and results

2. We share a common target market (commercial cleaning). The company I purchased offered:

a. carpet cleaning and protecting
b. tile and grout cleaning and tile sealing
c. upholstery cleaning (we already offered this service with my janitorial company. But, like me, you may be able to get new cleaning accounts for your cleaning business if you are considering a similar transaction.

3. The company I purchased was in a closely related (and somewhat complimentary) industry. I had already been providing carpet cleaning for many of my customers for years

4. The acquisition allowed me to expand into a new market (residential cleaning services).

a. carpet cleaning and protecting
b. tile and grout cleaning and tile sealing
c. upholstery cleaning.

If your goal is to get new cleaning accounts for your cleaning business, expanding into untapped markets is a great way to do this. Be careful though. If you go after too many markets, you run the risk of diluting your effectiveness and the power of your brand. Make sure your expansion is a close fit with your existing niche and that it enhances rather than detracts from your core business.

I still won’t offer residential cleaning, that’s just too far a stretch from my core competency. But carpets have enough common factors within both residential and commercial that going into residential carpet cleaning allows me to broaden my base without weakening my strength.

5. I’m now able to profit from an area that was previously a “break even” proposition for me. In the past, I charged my commercial cleaning clients the same amount I was paying for the carpet cleaning services So, for example: If the carpet cleaning company charged me $300 to clean my client’s carpets. I charged the client $300. Since the acquisition of that company though, whatever profit there is on the $300 now goes onto the “bottom line” of my company vs. that of another company. So, without raising the prices, I am able to increase my profits on existing services. I like this! Now, you may be asking why I didn’t mark up the $300 carpet cleaning so that I could make a profit. My reasons for that were as follows:

a. I didn’t feel it necessary to make a profit on work that I wasn’t doing. I was already making a profit on the work I was doing (janitorial services)
b. I wanted to make this so attractive for the carpet cleaning company that they would be incented to go “above and beyond” for me and my clients.
c. I wanted to make sure the pricing was attractive to my client
d. I didn’t want my client talking to carpet cleaners (who may offer to do janitorial work as well)
e. It positioned me as being able to provide for all the needs of my clients “one –stop shopping”. I also subcontract out window cleaning for the same reason.

A great way to improve your cleaning business is to increase sales, and/or improve the profit margins with your existing clients. Reason number 5 allows me to do both with very little in the way of additional marketing expense.

I hope that by sharing this information, I’ve given you some things to think about as you strive to improve your cleaning business and get new cleaning accounts. Buying a carpet cleaning business isn’t for everyone, and I may yet learn to regret my choice. My goal with this disclosure of my reasoning was to provide information that might help you to look at acquisitions you may be considering and to share some of the details that affected my decision.

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