At Jena Dyco we speak to many different people looking to enter the carpet cleaning industry and start their own carpet cleaning business. Some people have had previous business experience in another industry others have never run a business before. Many of the newcomers to the carpet cleaning industry have explored the option of buying an existing carpet cleaning business. You want to make sure that buying a carpet cleaning business is an informed decision rather than a guessing game!
Here are some tips of someone looking into to buying an existing carpet cleaning business.
1. Make sure you are buying a currently operational carpet cleaning business
Many people assume that because a business is on the market that it is a current business that is still operating. We have seen many cases where the owner of the carpet cleaning business has lost interest in the business or for other reasons has stopped operating the business. A carpet cleaning is not worth much if there has been no or little recent activity.
2. Is there a database?
When you buy a business, one of the main things you are buying is the database. You want to ensure that you have some previous happy customers to contact or else the business is worth very little. Find out how the database is maintained, this will give you an idea of the accuracy and worth of the database. What sort of information is in the database? Can you market to these people easily? Do you know what services the customers previously booked with the carpet cleaning business? Do you know who the commercial customers are as opposed to the domestic customers? If the business has no database at all I would think twice about purchasing the carpet cleaning business.
3. What is the reputation like of the carpet cleaning business?
When you are buying a carpet cleaning business one of the things that you are paying for is ‘good will’. Unfortunately you can not see good will. It is the relationships with customers, reputation and the image of the company in the market place. When someone wants to sell their business of course they tell you how fantastic their business is and how easy it is to run. What you want to know is whether the carpet cleaning business offers quality services and whether they have regular ongoing customers. If you are planning to run a business that offers top quality services you need to make sure that the reputation of the business and the values of the business match yours.
4. Does the carpet cleaning business have any ongoing carpet cleaning contracts in place?
Part of what you are buying is the database and good will, but partly you want to know that once you take over the business there will be some work coming in without you having to market for it. Of course you need to be ready to develop a marketing plan which will develop the business, but you should expect an existing business to have existing contracts in place. These may be written or verbal agreement. Of course a written contract gives you more confidence in the fact that the carpet cleaning contract will continue. I would suggest that if there are contracts in place you go with the new owner to introduce you so that they know that they will be in good hands. Make sure to find out exactly what each customer requires.
The existing contracts will give you a chance to demonstrate your high quality skills and show the customer that you are worth keeping on. Even if you think that the price point of the contract is not reflective of the high standards you will provide, it is still a good chance to win more business. You don’t want to get rid of too many existing clients to start with – this is a sign that this is not the right business for you.
5. What sort of potential growth is there for the carpet cleaning business?
Have a look at the carpet cleaning business and the services that the business offers. Is there room for you to grow and develop the business? You want to know that you can increase the turnover and profit of the business. Generally with a solid marketing strategy and a thorough business plan most businesses can be developed. What you want to ensure is that the types of customers that the business has will be receptive to change.
We would definitely recommend that you go and get your own professional carpet cleaning training to ensure that you know how to offer an excellent service to your customers. It is great to get the person you are buying the business from to teach you the basics about carpet cleaning and the carpet cleaning equipment they are selling you. However, most carpet cleaning businesses will not teach you industry best practice and will certainly not be able to give you a certification to go with your training.
If you have any questions about starting a carpet cleaning business please contact Jena Dyco on 03 9815 0175 or email email@example.com.