How do I tell if a janitorial company’s profit depends on the owner’s own work?

A janitorial company can look profitable because its owner quietly covers costs. If the owner cleans a site every night and takes no wage for it, the books flatter the business. You will have to hire someone for that work. Your task is to list what the owner actually does, then see what the earnings look like once those jobs are paid for.

Hours the owner works on the floor

Ask for crew schedules and timesheets for a recent stretch, and look for sites staffed by the owner or by a relative. Hours that appear on a schedule but not on payroll are the clearest sign. Compare the schedule with the payroll records line by line, and ask the seller to explain any shift with no wage attached.

Quotes, inspections and call-outs

Cleaning contracts are kept through quoting, site inspections and fast answers when something goes wrong. In many small companies the owner does all three. Ask who prices new work, who walks each site, and who takes the late-night call. If the answer is always the owner, a supervisor will have to be hired and paid.

Rebuilding earnings with a paid supervisor

Work with your accountant to restate the earnings as if each owner task were done by a paid employee, including family members paid below or above a normal rate. Review the resulting figure with your accountant, and expect a lender to set its own view. Also ask who signs off each site, because clients may expect the same face.

Documents to ask for

• Crew schedules and timesheets matched to payroll records.
• A list of sites showing who inspects and signs off each one.
• Details of family members on payroll and what they do.
• Records of after-hours call-outs and who answered them.

See also how to buy a cleaning business for the wider checklist.