Commercial cleaning businesses in Castellón: buying, selling and valuation

In cleaning, the company is to a large extent its contract portfolio. The buyer will analyse each one: customer, service, hours, price, duration, notice period for termination and date of the last price review. A verbal contract with a residential owners' association does not carry the same weight as one signed for several years with an industrial firm or a healthcare centre, and a public contract has an end date and a new tender.

Staff are the main cost and, therefore, the main risk. The applicable collective agreement (convenio colectivo), the seniority and terms of each worker assigned to the services, absenteeism and any employment litigation are reviewed. It is important to know what happens to the staff when a contract is lost or won, because the sector's collective agreements may regulate subrogation (the transfer of staff to the incoming contractor); it is worth confirming this with an employment adviser.

Margin is won or lost in the organisation: routes, supervision, time control and purchasing of products. A company that measures the profitability of each contract and has supervisors who resolve incidents without the owner is much more transferable. Quality or environmental management certifications help when customers require them in their tender specifications.

Illustrative example: if the largest customer accounts for a significant share of the hours invoiced and its contract expires shortly after the sale, the buyer will probably propose that part of the price depends on its renewal.