Evaluating Power Washing Businesses for Sale as a Buyer

Truforte Business Group - Brokers Blog

Courtesy Unsplash

If you’re looking to buy an existing power washing business for sale, there are several key factors you’ll want to evaluate to determine if it’s a wise investment. As a prospective buyer, your goal is to find a profitable business with growth potential that’s being offered at a fair price. Here is what you should look for.

Financial Records

One of the most important aspects is examining the financial records of the power washing company you’re considering buying. Specifically, you’ll want to review the business’s profit and loss statements for preferably the last 3 years. This will show you historical revenue and expenses trends to gauge profitability. Also request tax returns to validate the accuracy of the P&L statements.

Positive year-over-year revenue growth and consistent profit margins in the 20-30% range are good financial signs in a power washing company. Anything less may indicate potential issues or that the asking price is too high. You’ll also want to examine what specific service offerings account for the largest revenue streams – household washing, commercial jobs, etc.

Customer Base

In addition to hard financial numbers, the existing customer base can impact the valuation and success of a power washing business for sale. Ask the seller for details about their customers including retention levels, average jobs per customer, types of properties serviced, and customer satisfaction feedback. Strong customer loyalty and repeat business year after year is extremely valuable for consistent revenue.

Ideally, you want to see a healthy mix of residential driveway cleaning along with some commercial accounts such as storefronts, restaurants, office buildings, etc. Commercial jobs often include long-term service agreements which provide recurring revenue. Check for concentrated revenue dependency on just 1 or 2 big customers which could rapidly impact sales if one left.

Equipment and Assets

The equipment and assets that come with a power washing business for sale can positively or negatively sway your offer price. Professional power washers, water tanks, hoses, ladders, chemicals, and a transport vehicle often come with an established business. Determine the make, model, age and condition of all equipment. Well maintained professional gear from name brands holds value much better. How old is the company’s vehicle and what mileage does it have? You don’t want to buy worn out assets that will need lots of costly repairs and replacements.

Also consider ancillary assets included like an office, storage space, website, social media pages, online reviews, and any proprietary operations documents or software. These can contribute to the business’s value.

Reputation and Marketing

A strong professional reputation and brand visibility in the local market is extremely valuable equity that comes with buying an existing business. What’s the business’s online presence like? Do they have positive online reviews and ratings on sites like Google, Facebook, Yelp or Angie’s List? How much do they spend on advertising and marketing from methods like direct mail and Google Ads? All contribute to an established identity.

You’ll want to see consistent favorable feedback from past customers. Negative reviews may indicate potential problems with the quality of service. Also research how many other competing power washing companies operate in the local area to determine the level of competitive threat and saturation of the local market.

Staff and Training Practices

If the power washing operation employs a team of technicians, you’ll want to evaluate the staff as part of your buying decision. Long-term experienced crews are very valuable assets for consistent service quality and customer retention. High turnover is problematic. Understand how thoroughly the owner trains technicians on proper equipment usage, cleaning methods, safety protocols and customer service. Detailed training systems demonstrate a commitment to quality. Also examine how job scheduling and routing is handled. Advanced software tools can maximize efficiency.

Final Words 

By thoroughly evaluating all these areas – finances, assets, reputation, marketing, staff, and training – you’ll make the most informed decision possible on purchasing a power washing business as a buyer. The right opportunity with a fair asking price can put you on the path to owning a prosperous company with strong income potential. So do your due diligence during the evaluation process first.

Interested in more information about buying and selling businesses?

Find the pros and cons of owning various businesses on the Truforte Brokers Blog.

There you will find articles like:

Best Cities in Florida to Buy a Business

Selling a Business When There Is an Existing SBA Loan

How to Fix Document Issues Before Purchasing a Business

Buying a Business in Florida Is Easy Process for Seasoned Entrepreneurs

Why is Buying a Car Dealership Better Than Starting New One

Buying a Laundromat for Sale Can Be a Profitable Venture

What Are the Top Automotive Businesses to Purchase

Why Do We Need a Business Broker Before Searching For a Company

Why Buying a Wedding Planning Business Could Be a Great Idea

 Insurance Companies Are Expanding Through Acquisition

Buying a Software Development Company Can Be a Profitable Endeavor

Enhanced SBA Loan Program Makes Buying a Business Easier Than Ever

Finding Businesses for Sale: Your Path to Entrepreneurial Success

Unlocking Opportunities: The Benefits of Buying a Miami Business for Sale

Steps to Buy an Accounting Practice for Sale: A Comprehensive Guide

Navigating the Roadblocks: Challenges of Buying a For Sale By Owner Business

Contact Truforte Business Group