I’m currently in the military and plan on opening a window cleaning company in the next 12-24 months once my time is up. I’ll have a nice little nest egg built up, I have a few lines of credit available, and shouldn’t have any issues obtaining a SBA loan if I went that route. Money won’t be an issue, but finding the right opportunity is the tricky part.
Instead of starting the company completely from scratch, I’m researching the possibility of trying to buy out some of my (potential) competition. The question I have for all of you is how would you go about that? How would you take it if someone called you completely out of the blue, gave you a brief biography like I just did, and asked if you’d be interested in selling within the next year or two? I’m a strong believer in being friendly with competition, so I don’t want to create ill will before I even get started. Obviously that’s probably inevitable to some extent but I don’t know how to go about gauging everyone’s interest without just coming out and asking the question.
There’s currently a FISH franchise for sale near me, but I worked as a FISH Operations Manager for 3 years before entering the military, so I know better than to pursue that “opportunity”. I have a good idea of who the serious competition is around me, should I just call them up, introduce myself, and ask to arrange a sit-down? How would you go about it if you were in my shoes and how would you react to it if I were to call you?
I’d be thrilled if someone called me out of the blue and offered to by my business. The conversation would be friendly, but I think pretty short. If someone has a good business and no reason to sell, no reason to sell, except big bucks. No reason to buy, invest the money in yourself unless you can get one real cheap!
Instead of buying the franchise, you might talk to that owner. He might be looking at closing his doors if he can’t find a buyer. You could offer to buy the equipment, customer list, etc and then come up with a marketing strategy where he basically hands over his customers to you. Then just pay him a % for each customer that goes with you. If he’s on his way out, he’d totally jump at that opportunity.
Honestly, I would start from scratch regardless. Use your nest egg to buy your equipment, get legitimate and live on until its feasible to draw a paycheck. If the business is actually worth anything, the owner won’t want get rid of it without a sizeable payout. Why go into debt before you even get started? Use that FISH experience and go hustle up a bunch of work you can guarantee will be profitable.
When you get into buying someone else’s business, you are buying everything, problem clients, pricing structure and everything. I know people who have shelled out 60k for useless workers, crappy equipment and a list of low-paying chain accounts. All looked great on paper before the deal was inked.
I’m not totally against buying a route you know to be profitable, just wouldn’t do it off the bat if it were me.
I wouldn’t get mad if someone was friendly on the phone with me. but if they where rude, pushy and offering me pennies then I would find a way to hang-up the phone quick .
Just call , introduce yourself . Be friendly and ask them; if they know any window cleaner that wants to sell? Or if they know any window cleaning company for sale . And see what happens, if they say no they don’t know , then they’re not selling . Hope that helps
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Buying someone out isn’t a bad idea but finding the right opportunity is key.
persoanlly, I would approach the window cleaners with the idea to make a contact and ask them it they have leads of guys looking to sell their business. It’s a back door approach to asking if they would sell and it will keep them from being defensive.
Most owners out there are great people and it’s good to have those contacts regardless of them selling out.
Also call a broker in your area he might have someone looking to sell. My old boss sold both his routes through a broker. What do ya have to lose by calling guys in your area nothing. If that is what you want I would do it. If you could find, an established route that is profitable, an tight that’s a great way to start out. I think I know a few people that started out that way me being one of them . Good luck !!!
It’s good to be friendly with the competition around some might be bone heads others could be good contacts. I’m sitting down with 3 other window cleaners this morning about picking up a big super market chain this morning . I wouldn’t be able to do it without them
One more thing about buying a route I wouldn’t take out a bank loan to buy a route have the owner of the company hold the note .
A. You could always negotiate a better interest rate.
B. You want him to value your success so to speak . Yes he will an can take it back over if your late on note payments but why cash the guy out that won’t do you any good.
Make sure you have a lawyer an a contract of course a lawyer that understand business contracts also
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Not a bad idea at all. I’m in the Fort Hood, TX area, about halfway between Austin and Dallas-Fort Worth. I would prefer to move to Austin but I’d go to Dallas if the right opportunity presented itself. I’m not looking to take advantage of anyone’s situation but what you just said is at least worth kicking the tires on. I know how poorly FISH corporate treats its franchisees so there’s always a good chance this guy won’t feel bad about salvaging what he can out of the relationship.
My thoughts exactly. If nothing else comes out of it at least I’ll be able to gauge who the good guys are and who the lowballer under-the-table types are. I’m just throwing numbers around, but the way I look at it is, if I can purchase say a storefront/commercial business that does $100k gross for the price of $50k, $75k, or whatever the going rate, how much would it have cost me to start from scratch and build my business to where I would do that first $100k gross? How much would a good salesman, advertising, direct mail campaigns, and my own personal time spent pounding the pavement cost until I reached that first $100k gross sales? I don’t know the answer to that question yet, as I’m just exploring the idea right now but that’s my train of thought anyway.
Would you be willing to share how much you paid for this route and how much it did in gross sales when you purchased it? I’m having a tough time putting my finger on how to value a commercial route. Also, did you buy it with $0 down or did you put down a certain percentage?
It’s a gray area. They own the database but they can’t really own the customers themselves. Also, the franchisee couldn’t actually work for the buyer due to noncompete.
I’d definitely get a lawyer involved. But if a franchisee is looking to sell it’s maybe three things
They want to retire
They’re on the way to closing
They’re stuck (can’t grow it, don’t like franchise, whatever)
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I like that you’re thinking about this like a business owner, looking to get a return on your investment. Honestly, and this may not be popular here, but if you have $75k at your disposal to get you started, you might think of getting into something other than window cleaning, unless you’re in love with the idea of buying a bag full of question marks. That’s what buying a window cleaning business is.
It’s different if you’re an existing business acquiring a competitor. You will have a lot of history on them, and an idea of where they fit into the market. And you have your existing customer list that you make your living on, in case the business you acquire ends up sucking for reasons you didn’t anticipate.
For you, not having any of those things, you have basically one good shot, and you want to take that shot in the dark? I don’t get it.
I think you have been listening to what I’ve said in the past
Most, if not all, small businesses are only worth 1/2 the replacement cost of the equipment. Add on a few $$ for routes and customer lists IF you are new to the area and new to the business. A small business being the owner and a crew, maybe two crews.
If you are dead set on a window cleaning business and have $75k (or more) to spend you should consider doing this, teaming up with one of the guys here to learn the business and tools needed. you will be working for free knowledge. And then do this
Put a 5 year business plan together with attainable but high goals.
Buy a new vehicle capable of handling everything you intend on doing (resi, commercial, whatever). I said “new” because you will be able to get what you need and more importantly you wont have to worry about it breaking down, repairs, or any other stupid little things that can suck the cash from your pockets and time from your schedule. Figure ~$500/month payments depending on your down payment.
Purchase all the tools needed and plenty of replacement parts for the things that wear out. You dont want to stop a $1500 job because a $2 connector broke and you dont have a replacement. Plan on $5-$10k
Put $10k into marketing/advertising
Use whatever money you have left to live on until your business gets rolling and starts to turn a profit. This could take more than a year. If you have any money left over at the end of each month than you should put it back into marketing/advertising
If I was in your shoes, I would get into house and/or roof washing, especially in Texas or any other southern state because the ROI is better and personally I think the stress level is lower.
LOL, it brings me joy when I see people open their minds and learning something new instead of thinking inside their little box. Keep your mind open to learning and be willing to share (sometimes ) with others.
OP, you might want to look up Jolly Roger window cleaning in the DFW area. @bunkerboot had a nice little biz going until he got out of it due to health concerns. last i heard, he was looking to sell it. that was last year. not sure if it’s still an opportunity, or if it fits what you’re looking for, but worth checking out.
[MENTION=3418]michaelmole[/MENTION] is right about the window cleaning biz from a purely entrepreneurial standpoint. if i was looking to start a business strictly to build into a predictable, profitable machine it’s not a business i would ever consider.
most of the successful guys in this business sort of do it backwards: they “end up” in window cleaning for various reasons, and then evolve the business into one that works like a real business. you’ll be hard-pressed to find anyone who had real entrepreneurial vision and the resources to carry that vision out, who also deliberately chose window cleaning as the means to make it happen.
I agree with most of what [MENTION=3162]JCinNJ[/MENTION] said, except for the part about buying a new vehicle. that’s a pretty terrible investment. and i think “$10 into marketing/advertising” must be a typo. more like $10,000 maybe?
Bingo. Not that you can’t make money in this industry… many have. But if you’re wanting to look at it like an entrepreneur, it’s not an industry where you can have a real huge competitive advantage, there’s an extremely low barrier to entry, and there isn’t really a built-in scalability (like there are in tech or content based businesses). All these, plus the dramatic seasonality, which really puts a damper on everything, are why window cleaning is not an ideal business, if you’re looking to really accomplish something.
Window cleaning makes for a great little business. If that’s what you’re looking for, using that $75k to buy someone else’s little business is probably a mistake, IMO. Better to fund yourself for a year and build it yourself… if that’s what you’re looking for.
