How do I check whether a cleaning company’s clients will stay after the sale?
Ask who the clients are loyal to: the company, the owner or the cleaners. Read the service agreements for notice and transfer terms, review cancellation history, and, with the seller’s permission, speak with the largest clients before closing. Their answers matter more than the revenue report.
Begin with the paperwork. For commercial accounts, read each service agreement for its length, how either side can end it, and whether it can pass to a new owner. For homes and small offices there may be nothing written, which means each client can leave on a day’s notice. Ask for a client list showing start dates and how long each has stayed.
Next, find out who holds the relationships. If the owner does the quoting, answers the phone and walks the sites, clients may feel they are buying from a person. If the same crew has served the same buildings for years, the crew may matter more than the owner. Ask who the clients call when something goes wrong.
Then plan the introduction. Many buyers ask the seller to stay for a transition and to introduce them to the largest accounts. Ask whether any big client has hinted at going elsewhere, and look at lost clients over the last few seasons and why they left. Keep promises about price and schedule steady at first. Write down what you learn from each conversation, so that doubts about a single account do not get lost before closing.
Key takeaways
- Read each agreement for notice, renewal and transfer terms.
- Ask who clients are loyal to: owner, company or crew.
- Review past cancellations and the reasons given.
- Arrange introductions to key clients before closing, with the seller’s consent.
Related reading
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Due diligence
Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
- 03Business Development Bank of CanadaGovernmentWhat are financial statements?
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