Hey All,

I received an email recently from a window cleaner looking to possibly buy another window cleaner’s business. He asked some questions, so i thought you might benefit from then answers in case you are ever in the market for another window cleaning business.

Hi Steve,

May I please get your opinion/advice: I talked to another window cleaner over the weekend and he wants to sell his business because he is moving in a little over a month. He claims to have 135 residential customers and a handful of commercial customers. It is not a franchise. He is asking $7000 but says he is flexible on the price and it is important to him to find someone who is trustworthy. I trust what he has told me so far, but I am just not sure what price is fair and if it might be best to give him some money down and the rest as a % of what I actually make from his customers. Can you please give me all the thoughts you have about this?

Thank you,

David

My Response:

Hi David,

Good morning. It’s good to hear from you.  Long time no talk.  :o )

I think overall he’s asking a good price.  Actually he’s asking less then a good price in my opinion.  With that said though, it really depends on the sales revenue those 135 + customers generate per year.  And how many of those customers are actual repeat customers that you can count on at least once (preferably twice) per year?  So these answers are key.

And you do mention that you trust what he’s saying, so that’s good.  But I would still ask him to introduce you to a half dozen of his customers that you pick from his customer base.  Obviously if he picks, he’ll give you the best ones.  But this’ll give you a good indication of what they think of him and his work in addition to giving you an idea on the long term viability of these customers for your business.  The last thing you want is to pay this guy for his customers, but then many of the customers go elsewhere when they find out someone else is doing their windows.

And what is his pricing?  This is important.  You need to know whether he’s making below average earnings or if his pricing is similar to yours.  Because after new ownership, if you start bumping the pricing up on these customers, I guarantee you that you’ll lose some for sure.  It’s best to wait a good year or two before playing with their pricing.  So you want to make sure these 135+ customers are profitable right from the start.

Lastly, it’s always best to work on a downpayment arrangement for this type of business and then either pay him a monthly or a % of each job completed (% applies to his ex-customer jobs only).  I personally like the % plan the best.  And if he agrees to receive a percentage of each job, it speaks volumes about his faith in his customers staying with you for the duration.  But it does require him to trust that you’ll be diligent in following up and securing the jobs of his ex-customers.  So he will be taking on more risk.

Without having all the details to the above issues/questions, my initial offer would be to give him $1000 down.  Then I would pay him 20% of each job completed for his past customers.  And I would make it $8000 total to give him an incentive to strike this kind of arrangement.  The main goal is for you to go in with as little as possible.  You don’t mind the back end so much (20% or the $8000 total) because you’ll make it up through extra sales.  I mean if you’re doing things correctly, you should be making some money on ancillary services like ceiling fan cleaning and/or mirror cleaning.  And if you follow up and build the relationships like you should, those 135+ customers should feed you referrals regularly.

So both of you really benefit in this arrangement in many ways.  You’re eliminating most risk by going in with a small down payment, and you’ll be making back end sales/referrals from these customers.  And he’ll make $1000 more than his asking price.

Another option is to offer a smaller down payment of let’s say $500, a monthly payment for 6 months, and then finish it up with 20% of each customer job until $8000 total has been reached.

But keep in mind that I have no idea how this guy will react to an offer of a grand down (or $500 down).  He may need as much of that 7k as possible in order to cover his moving expenses.  So w/o knowing more details (sales revenue, customer quality, desire of buyer), I have more questions than I do answers.  The two options above though are good options.  You definitely don’t want to pay him 7k in full.  No way.  Anyway….please keep me posted on this.  If handled correctly, it could be a great way to add to your customer base.

Take care and have a great day.

Regards,

Steve

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