What should I check before buying a carpet cleaning business?
Check the equipment and its service records, how much work repeats and where referrals come from, how much of the work depends on the owner personally, and any history of damage claims. A carpet cleaning business is mostly machines, routes and relationships, so each of those needs evidence, not just the seller’s word.
A carpet cleaning business looks simple from outside: a van, a machine and a phone that rings. Buyers can still get caught by worn equipment, work that came through one person, or a claims history nobody mentioned. Ask for the evidence on each point below, and bring your accountant and lawyer in before you commit to anything.
Equipment and vehicles
The truck-mount or portable extraction unit is the heart of the business. Ask for the make, the age, the service log and any major repairs, and have a technician look at it if you can. Check the van or truck the same way, and confirm who owns each piece. Ask whether anything is leased or financed, since that debt may stay with the equipment. See how to assess equipment condition.
Where the work comes from
Separate homeowners who book again from one-off jobs, and separate both from property managers and commercial accounts. Ask where new customers find the business: search, reviews, restoration companies, landlords or rental turnovers. If a handful of referrers send most of the work, find out whether they would keep sending it to a new owner. A short call with the biggest of them can show whether they would keep sending work to a new owner.
The owner’s role on the job
Ask who does the cleaning, who quotes, and who customers call when something goes wrong. If the owner does most of it, the business may not run without that person, and you should plan for a handover period. Look at how technicians are trained and paid, and whether any of them are likely to leave or start their own firm.
Damage claims and complaints
Ask for a written list of damage or shrinkage claims, how each was resolved, and whether any are still open. Ask for the insurance history as well. Compare the seller’s account with online reviews. Who answers for claims arising before closing is a point for your lawyer to settle in the agreement.
Related reading
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Due diligence
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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 CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentBuying a business? How to protect yourself from potential liabilities
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