How to Sell a Cleaning Business: Janitorial, Commercial, and Residential

Cleaning businesses — whether janitorial, commercial, or residential — are quietly one of the most in-demand acquisition targets in the service sector. The industry is massive, highly fragmented, and increasingly attractive to private equity firms and multi-location operators looking to build scale.

If you've built a profitable cleaning business, here's what you need to know about selling it.

What Is My Cleaning Business Worth?

Most cleaning businesses sell for 2x to 4x SDE or 3x to 6x EBITDA, depending on size, contract base, and service type.

Commercial/Janitorial Cleaning

Commercial cleaning companies with long-term contracts sell at the higher end of the range. A janitorial company with multi-year contracts, diversified clients, and $1M+ in SDE can command 3.5x to 4.5x or more.

Why: Recurring contracts with monthly billing. Low customer churn. Predictable revenue that buyers can underwrite confidently.

Residential Cleaning

Residential cleaning businesses typically sell at the lower end — 1.5x to 3x SDE — because revenue is less predictable, customer turnover is higher, and the labor market is more challenging.

Exception: Residential companies with strong recurring customer bases (weekly/biweekly service), a recognized brand, and systems-driven operations can command multiples closer to commercial businesses.

Specialty Cleaning

Carpet cleaning, pressure washing, disaster restoration, and other specialty services fall somewhere in between. Restoration companies with insurance relationships and emergency contracts can command premium multiples.

Why Buyers Want Cleaning Businesses

Recurring revenue. Commercial contracts provide monthly, predictable revenue — the most attractive revenue type for any buyer.

Essential service. Buildings need to be cleaned regardless of the economy. Cleaning is one of the most recession-resistant service industries.

Low capital requirements. Compared to manufacturing or construction, cleaning businesses require relatively little equipment investment.

Scalability. Adding new contracts is straightforward — you need people and supplies, not expensive capital equipment.

Fragmentation. The industry is dominated by small, owner-operated companies. PE firms see massive consolidation opportunities.

What Makes a Cleaning Business More Valuable

Contract Base

The foundation of your value is your contract portfolio. Buyers evaluate:

• Contract duration. Multi-year agreements with renewal clauses are worth more than month-to-month arrangements.
• Client diversity. No single contract should represent more than 15-20% of revenue.
• Contract margins. Not all contracts are equally profitable. Buyers will analyze margin by account.
• Renewal history. A 90%+ contract renewal rate signals client satisfaction and revenue stability.

Systems and Processes

Can someone other than you manage the day-to-day operations? Documented processes for hiring, training, quality control, scheduling, and customer management are critical.

Employee Stability

Cleaning businesses depend on labor. High turnover is expected in the industry, but companies that manage it well — through competitive pay, training programs, and good culture — stand out. If your turnover rate is meaningfully better than industry average (which can exceed 200% annually in some segments), that's a selling point.

Equipment and Supplies

Well-maintained equipment and efficient supply chains reduce the buyer's need for immediate capital investment. An equipment list with maintenance records demonstrates professional management.

Reputation and Reviews

For residential and small commercial cleaning, online reviews matter. A strong Google presence with consistent 4.5+ ratings signals a well-run operation.

How to Prepare for a Sale

1. Formalize Your Contracts

If you've been operating on handshake agreements, get your clients on written contracts before going to market. Even simple service agreements with auto-renewal clauses dramatically increase your business's value and salability.

2. Build Your Management Layer

If you're still managing crews, handling scheduling, and doing quality inspections yourself, you have an owner-dependence problem. Hire a site supervisor or operations manager. Train them for at least 6 months before going to market.

3. Track Your Numbers

Many cleaning business owners run their finances loosely. Buyers need:

• Revenue by client/contract
• Gross margin by account
• Labor costs as a percentage of revenue
• Customer acquisition cost and lifetime value
• Monthly financials for the past 3 years

If you don't have this data, start tracking it now.

4. Clean Up Labor Compliance

Ensure all employees are properly classified (W-2 vs. 1099), wages comply with state and local minimums, overtime is calculated correctly, and workers' comp coverage is in place. Labor compliance issues are deal killers in cleaning businesses.

5. Secure Your Lease

If you operate from a warehouse or office, ensure your lease has at least 3-5 years remaining or favorable renewal terms. A short-term lease creates uncertainty for buyers.

Who Buys Cleaning Businesses?

PE-Backed Platforms

Private equity firms are actively building commercial cleaning platforms. They look for companies doing $1M+ in EBITDA with strong contract bases and growth potential.

Multi-Location Operators

Existing cleaning company owners looking to expand their geographic footprint or add service lines (e.g., a janitorial company acquiring a carpet cleaning business).

Franchise Organizations

Some franchise systems acquire independent cleaning businesses and convert them to franchise locations.

Individual Buyers

First-time business owners, often SBA-financed, who want a business with recurring revenue and relatively straightforward operations.

Get a Free Valuation

If you own a cleaning business in California and you're thinking about selling, I'll give you a free, confidential estimate of what your business is worth in today's market. Schedule a call.