Commercial Office Cleaning and Janitorial Services
This article outlines the acquisition opportunity and execution strategy for a commercial cleaning and janitorial services business servicing office buildings, medical facilities, schools, and government installations. Operating for 22 years across a major metro region, the company specializes in after-hours and weekend cleaning routes, floor waxing, window washing, and consumables replenishment (paper goods, soap, etc.). With over 90 active contracts, this business delivers daily, weekly, and monthly janitorial solutions through a flexible staffing model and well-documented standard operating procedures.
The company reports $6.1 million in annual revenue and adjusted EBITDA of $1.12 million. Approximately 78% of revenue comes from ongoing service agreements some month-to-month, others locked in 12–36-month contracts. The business operates largely in the evening, deploying 45 field staff in staggered shifts. Most client relationships are multi-year and include supply cost passthroughs, increasing gross margin stability.
This type of business is highly suitable for SBA 7(a) acquisition due to recurring commercial contracts, low CapEx, and minimal customer concentration. Strategic buyers can scale by acquiring smaller competitors, bidding government janitorial RFPs, and expanding services into daytime porter staffing or specialized floor care.
Proposed SBA 7(a) Deal Structure
Due to its strong recurring revenue and contractual base, the acquisition can be leveraged with performance-aligned seller financing:
Purchase Price: $4.5 million (4.02x EBITDA)
SBA Loan: $3.375 million (75%)
Buyer Equity Injection: $450,000 (10%)
Seller Financing (Subordinated): $675,000 (15%), 5-year amortization with 12-month interest-only
Key seller note protections:
25% clawback on seller note if top 20% of clients terminate within 6 months
Seller earns a 10% bonus if the buyer closes three new government accounts in Year 1
Seller provides transition assistance with bidding RFPs, staff redeployment, and vendor pricing negotiations for a period of 12 months
Client Base and Revenue Breakdown
Client industries:
Corporate offices and professional services: 38%
Medical offices and outpatient facilities: 22%
K–12 schools and charter academies: 16%
Government buildings (state, county, municipal): 14%
Retail, light industrial, and mixed-use facilities: 10%
Revenue types:
Daily/nightly janitorial services: $4.35M
Specialized floor cleaning (waxing, stripping, buffing): $920K
Consumables procurement and restocking: $510K
Post-construction cleanup and deep cleans: $320K
Contract terms:
60% of clients on 12–36-month renewable service agreements
40% on rolling monthly auto-renew with 30-day exit terms
Consumables billed at cost + 20% margin
Annual rate escalators built into most contracts (2–4%)
No single customer accounts for more than 6% of revenue. The top 25 contracts account for 61% of total revenue. AR is under control with <5% aging over 30 days.
Labor Model and Operations
Staffing:
38 nighttime janitorial crew members
7 porters and day staff
4 supervisors (each overseeing 10–12 buildings)
1 operations manager
2 client services/account managers
1 recruiter/training manager
1 general manager
Crews are assigned by geography and job type. All personnel are W-2 or 1099 depending on state compliance laws. Onboarding includes background checks, 3-day shadow training, and bilingual SOP documents.
Key operational systems:
Swept (scheduling, time tracking, inspection)
QuickBooks and Bill.com for billing and payables
Route optimization with Google Calendar and geofencing apps
Buyers should budget for:
Quarterly supervisor bonuses tied to client retention and inspection scores
On-call rotation pay for weekend emergency cleanups
Worker compensation and safety refresh every 6 months
Facilities and Equipment
Leased 3,500 sq ft operations center with:
Equipment storage (vacuums, floor machines, carts)
Supply inventory (toilet paper, paper towels, soaps, bags)
HR/admin offices
Fleet includes:
6 transport vans for equipment deployment (owned, FMV ~$150K)
No on-site cleaning required—work is mobile/on-location
Lease: $3,650/month NNN, 3 years remaining with optional 5-year renewal
CapEx:
Replace 2 vans over 24 months: $55K
Add floor buffing machine: $6K
New staff scheduling system with auto SMS alerts: $8K
Sales and Marketing
Lead sources:
Government procurement portals (Sam.gov, state bid portals)
Referral relationships with property managers and developers
Website inbound (Google Ads + LSA)
Field signage on trucks and uniforms
Marketing spend: ~$4,200/month
Growth initiatives post-acquisition:
Hire full-time proposal writer to pursue government RFPs and janitorial renewals
Create dedicated school/hospitality sales division
Launch floorcare-only services for light industrial customers
Test "green cleaning" division with eco-certified products for medical clients
Financial Performance Overview
Revenue: $6.1M
COGS (labor, supplies, payroll tax): $3.65M
Gross Profit: $2.45M
SG&A: $1.33M
Adjusted EBITDA: $1.12M (18.4%)
Margins:
Night janitorial: 45–50%
Consumables: 20–25%
Specialty floor work: 55%+
The business produces $90K+/month in discretionary cash flow and has limited capital expenditure needs. Seasonal revenue is consistent year-round.
Legal and Risk Considerations
OSHA-compliant crew training logs
Proper chemical handling certifications for supervisors
Active $2M GL policy, $1M auto, $1M umbrella, and $1M workers’ comp
No lawsuits or safety violations on record
State janitorial licenses and registrations current
Buyers should review all contracts for assignability and minimum wage compliance by region.
Working Capital Requirements
Payroll float: $130K–$150K
Route consolidation software upgrade: $10K
Vehicle rotation: $30K/year
Seller consulting agreement: $40K
Bid bond and insurance reserves for government contracts: $20K
Ideal Buyer Profiles
Facilities services platforms (HVAC, fire safety, plumbing)
Private equity-backed service roll-ups targeting recurring B2B
Janitorial franchise operators looking for independent brand
Buyers with government procurement or real estate vendor experience
Post-Close Execution Plan
Retain supervisors and transition key client relationships
Conduct 90-day audit of all contract profitability by square footage
Launch "elite floor team" for wax/buff contracts and urgent deep cleans
Install recurring inspection system with real-time client reports
Pilot government-only proposal pipeline and allocate $100K/year for bids
Conclusion
This janitorial business offers dependable, contract-backed revenue, high retention clients, and straightforward staffing systems. Its fleet, SOPs, and systems make it ready to scale via government work, geographic densification, or service add-ons. SBA 7(a) financing allows for minimal out-of-pocket capital and a high-cash-flow entry point into a necessity-based, recession-resistant commercial service sector. For the buyer seeking route-driven income with institutional clients and operational playbook in place, this is a compelling acquisition.
