How to Transfer a Cleaning Company: A Complete Step-by-Step Guide
Transferring a cleaning company is not just about “handing over clients” or selling equipment: it means organising accounts, contracts, the workforce and, above all, ensuring a smooth transition so the business remains profitable under a new owner. In this guide we’ll look at how to transfer a cleaning company step by step, what you need to bear in mind if you want to sell your cleaning company, and what to look for if your goal is to buy a cleaning company that is already operating.
The cleaning sector is characterised by recurring contracts, tight margins and a key role played by cleaning staff in service quality. That is why preparing the deal properly and structuring it intelligently is what makes the difference between a successful transfer and a medium-term problem. Let’s break it down in detail.
How to prepare your cleaning company for sale
Organise accounting, contracts and key documentation
The first step to selling a cleaning company is to bring all documentation up to date. You need clear and consistent accounts, with balance sheets, profit and loss accounts and tax returns that reflect the real situation of the business. You should also compile contracts with clients, suppliers, landlords, insurance policies and any other relevant agreements. The more transparency you offer, the more trust you will build with serious buyers and the easier it will be to justify your asking price.
Review the labour situation: staff, collective agreements and subrogations
In the cleaning sector, the workforce is the main asset. Before the transfer it’s important to review employment contracts, job categories, salaries, seniority, shift schedules and compliance with applicable collective bargaining agreements. In addition, many cleaning contracts include staff subrogation clauses, so it’s essential to know exactly which employees are linked to each client. A clear picture of the labour situation reduces the buyer’s risk and prevents future disputes.
Optimise processes and results to improve valuation
If you have some time before transferring, it’s a good idea to spend a few months improving profitability: adjusting routes and schedules, negotiating better terms with suppliers, phasing out unprofitable services and strengthening relationships with key clients. A business with organised processes, controlled incidents and stable results will be valued higher than a disorganised company, even if they invoice the same. Think of the transfer as “getting the company in shape” before showing it.
Protect confidentiality with staff and clients during the process
The sale of a cleaning company must be managed with discretion. An early announcement can create uncertainty among staff and clients, impacting revenue at the most delicate point. The usual approach is to share sensitive details only with screened buyers and to use non-disclosure agreements (NDAs). As the deal progresses, you can gradually communicate the change of ownership in an orderly way, explaining that the goal is to ensure service continuity.
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Publish nowHow to value a cleaning company before selling or buying
Turnover, margins and recurring profitability of cleaning services
The basis of any valuation is to analyse historical turnover (usually the last 2–3 years), margins and real profits after wages, social security, products, vehicles and overheads. Unlike other businesses, in cleaning the value lies in the recurrence of contracts rather than one-off jobs. That’s why it is useful to separate stable services (regular maintenance) from one-off jobs (deep cleans, post-construction work, extras).
Client portfolio analysis: contract types, duration and concentration
When buying a cleaning company, one of the most sensitive points is the client portfolio. It’s important to review contract duration, automatic renewals, termination clauses, price review mechanisms and what percentage of turnover comes from each client. A diversified portfolio with written contracts and long-standing relationships is worth more than a business heavily concentrated in a few clients or based on verbal agreements.
Cost structure: staff, materials, equipment and subcontractors
To properly value a cleaning company you must understand its cost structure. Staff usually accounts for the bulk of expenses, followed by cleaning products, machinery, PPE, fuel, vehicle leasing and, where applicable, subcontracted services. Analysing these costs helps the seller (to defend the price) and the buyer (to spot potential efficiency improvements). A business with costs under control and no surprises will be far more attractive.
Sector-specific risks: client churn, bad debts and price competition
The cleaning sector faces specific risks: client churn, downward price pressure, highly competitive public tenders and the risk of bad debts. It’s advisable to review the age of receivables, client loss rate in recent years and reliance on contracts with very tight margins. All these aspects directly influence the multiple a buyer will be willing to pay.
How to sell a cleaning company step by step
1. Define your sale objectives and realistic timeframes
Before putting your company on the market, define what you want to achieve: minimum sale price, whether you will accept deferred payments, whether you’re willing to stay on for a transition period, etc. It’s also important to set realistic timeframes: selling a cleaning company can take several months, especially if you are looking for a buyer who will keep your staff and client base.
2. Request a professional valuation of the business
Although you can estimate a rough value by comparison, the most advisable approach is to obtain a professional valuation. An objective report based on data helps you defend your price to buyers, avoid undervaluing your company and understand how far you can negotiate. It also provides a reference point for structuring the deal (upfront payment, earn-outs, etc.).
3. Prepare the sales memorandum and information for buyers
The sales memorandum is a document that presents your company: executive summary, history, services, client portfolio, key financial figures, team, cost structure and growth opportunities. This pack allows potential buyers to quickly understand what they are buying and whether it fits their objectives. The clearer and more honest it is, the smoother the analysis and negotiation phase will be.
4. Choose channels to find buyers (direct, brokers, platforms)
To transfer a cleaning company you can use several channels: direct industry contacts, M&A advisers or brokers, and specialised online platforms where you can list your business confidentially. Each option has pros and cons in terms of reach, cost and level of support. The key is that the chosen channel allows you to receive enquiries from genuinely interested and solvent buyers.
5. Manage visits, due diligence and access to sensitive information
Once qualified buyers appear, it’s time to organise meetings and site visits and manage access to more detailed information: contracts, client lists, salary structure, etc. Usually this access is granted gradually and under NDAs. The due diligence phase allows the buyer to verify that the data provided are accurate and to detect any hidden risks.
6. Negotiate price, payment terms and conditions (earn-out, handover, etc.)
After the review of the company, you move on to the final negotiation of price and conditions: lump-sum or deferred payments, possible variables linked to future turnover (earn-outs), the previous owner remaining in the business for a period, guarantees against bad debts, and so on. In service businesses such as cleaning, it is very common to agree on a period where the former owner stays on to smooth the transition with both clients and staff.
7. Draft contracts and formalise the transaction (shares, quotas or assets)
The last step is to formalise the deal legally. This can be done via a sale of shares or quotas in the company, or by transferring assets (client portfolio, equipment, contracts, etc.). In both cases the contract must clearly state what is being sold, the payment schedule, guarantees, limits of liability and the seller’s role in the post-transfer period. Executing the agreement as a public deed before a notary provides greater security for both parties.
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Publish nowHow to buy a cleaning company safely
Define the type of cleaning company you are interested in (B2B, residential blocks, industrial, etc.)
Before you buy a cleaning company, define what type of business suits you: office and retail cleaning, residential buildings, industrial sites, hospitals, public contracts, etc. Each segment has different requirements in terms of staff, schedules, certifications and competitive intensity. The clearer your target, the easier it will be to filter opportunities.
Analyse the strategic fit with your project or existing company
If you already operate in the sector or in related services, buying a cleaning company can be a way to grow through acquisition: gain volume, access new geographic areas or complement your service offering. If you are starting from scratch, it is important to carefully assess your management skills, prior experience and the time you can devote to integrating the business. A good strategic fit will significantly reduce the risk of the transaction.
Due diligence in cleaning companies: what you must always check
Due diligence is the in-depth review of the company before purchasing it. For a cleaning company you should at least review: accounting and tax records, client contracts, employment contracts and compliance with collective agreements, history of client complaints or incidents, ongoing disputes or claims, and the status of licences and insurance. The goal is to confirm that what you’ve been told matches reality and that there are no hidden liabilities.
Key points for negotiating the purchase price and adjustment mechanisms
When negotiating the price, it’s common to use multiples of profit or, in smaller companies, multiples of annual turnover, adjusted for the quality of the client portfolio and business risk. It is also common to include adjustment mechanisms based on future turnover or the retention of specific key contracts. These mechanisms allow buyer and seller to share risk and align interests during the first years after the transfer.
Essential documentation in the purchase and sale of cleaning companies
Cleaning contracts with clients: terms, prices and termination clauses
Client contracts are the heart of a cleaning company. You need to check their terms: scope of services, prices, annual reviews, duration, notice periods and grounds for termination. It is also important to see whether they deal with changes of ownership or staff subrogation. A portfolio of clear, well-drafted contracts minimises the risk of losing clients after the transfer.
Employment contracts, subrogations and compliance with collective agreements
On the labour side, it’s important to analyse employment contracts, salary structure, bonuses, schedules, overtime and the degree of compliance with the applicable collective agreement. In many cleaning companies, strict subrogation rules apply depending on client contracts, so it’s vital to understand which workers are tied to which service and what obligations will be passed on to the buyer.
Inventory of equipment, vehicles, machinery and products
Another key piece is the inventory of equipment, vehicles, machinery, cleaning tools, PPE and chemicals. It is advisable to have an up-to-date list showing the condition of each item, whether it is owned or leased and where it is located (warehouse, vehicles, client premises, etc.). This inventory will be the basis for agreeing which assets are included in the transfer.
Licences, insurance, health & safety and regulatory compliance in the cleaning sector
Finally, you must review the company’s licences and insurance: correct tax registration, public liability insurance, health and safety compliance, staff training in occupational risk prevention, protocols for chemical products, any quality certifications, and so on. A strong level of regulatory compliance not only reduces legal risk but is also a selling point for corporate clients and public authorities.
Tax and deal structure: how to do it properly
Selling a cleaning company via share sale vs. asset sale
One of the big decisions when transferring a cleaning company is whether the transaction will be structured as a sale of shares or quotas in the company, or as an asset sale (client portfolio, equipment, contracts, etc.). Each option has different tax, legal and operational implications. A share deal is often simpler from a legal standpoint, while an asset deal may allow you to choose exactly what is transferred.
Tax implications for the seller and the buyer
For the seller, the transaction may trigger a capital gain subject to personal income tax or corporate tax, depending on who owns the business. For the buyer, the chosen structure may have consequences for VAT, transfer taxes and the future depreciation of acquired assets. This is why it’s essential to analyse the deal from both sides before signing anything.
Associated costs: advisory, notary, registry and potential capital gains
On top of taxes, there are other associated costs in a business transfer: financial, legal and tax advisory fees, notary fees, registry costs and possible municipal capital gains taxes if real estate is involved. Factoring these costs into your calculations from the outset helps avoid surprises and allows you to assess the true profitability of the transaction.
Recommendations for planning the transaction from a tax perspective
Good tax planning can be the difference between a great deal and a poor one. It’s advisable to compare different scenarios (immediate sale, phased sale, prior restructuring, etc.) and consider the best time of the financial year to complete the transaction. Working with a tax adviser specialised in business transfers is particularly important when the sums are significant or there are complex corporate structures.
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Publish nowCommon mistakes when transferring or buying a cleaning company
Setting the price without a professional valuation or market benchmarks
One of the most frequent mistakes when considering how to sell a cleaning company is setting a price “by eye”, without a professional valuation or solid market data. This can mean the company languishes on the market for months or, conversely, is sold below its real value. Having an objective benchmark helps you negotiate with much more confidence.
Failing to properly assess the client portfolio and risk of client loss
Both seller and buyer should carefully analyse the risk of client loss. If several key contracts depend heavily on the personal relationship with the former owner, or if there is very aggressive competition in the area, the risk of losing clients after the transfer will be higher. Ignoring this can lead to overpaying or to over-optimistic expectations about future revenue.
Ignoring hidden liabilities: labour, tax or contractual
Another common mistake is failing to dig deep enough for hidden liabilities: labour claims, discrepancies with Social Security, ongoing tax inspections, contracts with problematic clauses, etc. A thorough due diligence is the best tool to uncover these risks and to reflect them properly in the sale and purchase agreement.
Failing to properly document guarantees, price adjustments and transition periods
A further frequent error is leaving key aspects of the contract vague: what happens if a major client leaves, if undeclared debts appear or if actual results deviate from forecasts. Including guarantees, price adjustment clauses and a well-regulated transition period is essential to protect both buyer and seller.
Is it better to start from scratch or buy an existing cleaning company?
Advantages of buying an established cleaning company
Buying an operating cleaning company allows you to start with an existing client base, team and processes. This shortens the time needed to reach a meaningful turnover and avoids part of the toughest commercial phase of building a client base from zero. You also inherit the company’s reputation and references, which is extremely valuable in a sector where client trust is everything.
When starting a new project may be more worthwhile
Starting a cleaning company from scratch can make sense if you already have committed clients, strong sales contacts in the sector, or you want to set up a very specific model (for example, eco-friendly cleaning or highly specialised services). Starting from zero gives you more freedom to design the structure, but it means assuming the initial effort of client acquisition and brand building.
Criteria for choosing between buying, franchising or starting from scratch
When deciding whether to buy a cleaning company, join a franchise or start your own project, you should consider several factors: available budget, previous sector experience, risk tolerance, time you can devote and your growth targets. Buying gives you speed and volume; a franchise gives you brand and support; starting from scratch gives you maximum control. There is no universally better option, only the one that best fits your situation.
Frequently asked questions about how to transfer, sell or buy a cleaning company
How long does it take to sell a cleaning company?
Timeframes depend on the size of the business, how well it has been prepared for sale and market conditions. As a general reference, a complete cleaning company transfer process can take from several months to over a year, including valuation, buyer search, negotiations and signing.
What multiple of profit or turnover is usually paid in this sector?
There is no single figure, but prices are often expressed as multiples of profit or, for smaller companies, of annual turnover. The specific multiple will depend on the quality of the client portfolio, the stability of results, the cost structure and the risk level perceived by the buyer.
What happens to employees when the cleaning company is sold?
In many cases, rules on transfer of undertaking and the subrogation provisions set out in sector collective agreements apply. This means the buyer takes on the workforce under the same conditions, unless changes are agreed in accordance with the law. That is why it is so important to analyse the labour side carefully before completing the transfer.
How can I make sure clients won’t leave after the transfer?
You can’t eliminate the risk completely, but you can reduce it: by communicating the change professionally, ensuring continuity of the staff working at each site, maintaining conditions and prices for a reasonable period and, in some cases, involving the former owner in the transition. A well-designed communication plan is key.
What minimum size should the company have to make it worthwhile to sell or buy?
It depends on the buyer’s profile. Some entrepreneurs are interested in small local portfolios, while other groups only look for companies with a certain turnover. In general, the more stable and professionalised the company is, the more options you will have to find buyers willing to pay a good price.
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