A commercial or residential cleaning business is worth what its ongoing profit supports, adjusted for risk. In cleaning, value leans on contracts: how long they run, whether they can be transferred, and how many customers share the revenue. Reliable staff and an owner who manages rather than cleans also support a higher value.
What is the short answer?
Your cleaning business is worth what its ongoing profit can support, adjusted for the risk that the profit will not continue. In cleaning, that risk often sits in the contracts and the customer list.
A valuer starts with the profit in your accounts. They then test how much of it a new owner could rely on. The Australian Government's guide to valuing your business says that for buyers and investors, the biggest value of a business will be its future profits. It also notes that value can depend heavily on your industry.
A cleaning business usually has few physical assets. Its value comes mostly from regular work that keeps coming in.
What pushes the value of a cleaning business up or down?
Anything that makes future work more certain tends to support value. Anything that makes it easy to lose a customer, or hard to keep staff, tends to reduce it.
| Factor | Tends to support value | Tends to reduce value |
|---|---|---|
| Contracts | Written, longer contracts that can be transferred | Verbal deals or contracts that end at short notice |
| Customer spread | Revenue spread across many customers | One or two customers make up a large share |
| Recurring work | Weekly or fortnightly regular cleans | One-off end-of-lease or project jobs |
| Owner's role | You manage, quote and supervise | You clean the sites and hold every relationship |
| Staff | A stable team, paid correctly, with supervisors | High turnover or unclear worker arrangements |
| Margins | Prices reviewed and costs passed on | Old contract prices that no longer cover wages |
| Systems | Rosters, checklists and quality checks written down | Everything sits in your head or your phone |
Contracts. A buyer is paying for work that continues after the sale. Check what each contract says about ending early and about a change of owner. Some need the customer's consent to transfer.
Customer spread. Commercial cleaners can rely on a few large sites. If a big contract is retendered and lost, profit can drop quickly.
Margins. Wage costs drive a cleaning business. A contract priced years ago may now earn very little. A valuer looks at profit by contract where records allow.
What add-backs and traps should I watch for?
Add-backs are costs added back to profit because a new owner would not have them. Each needs a reason and a record.
- Owner wages. If you clean or supervise for little pay, a valuer deducts the cost of replacing your work.
- Staff pay and entitlements. Underpayment makes profit look higher than it really is. Leave owed to staff who stay on may also be a cost to the buyer. Ask your accountant how this applies to you.
- Contractors. If cleaners are engaged as contractors, check the arrangements with your lawyer or accountant. A buyer will.
- Vehicles and equipment. Vans, machines and supplies are often counted separately at their real worth. Finance owed on them is usually deducted.
- Cash jobs. Income that is not in your accounts cannot be counted.
- Franchise approval. In a franchised cleaning business, the franchisor may need to approve the buyer, and the territory terms matter.
Which documents matter for a cleaning business?
Beyond your profit and loss, balance sheet and tax returns, a valuer will want records that show how secure the work is.
- Every customer contract, with start dates, end dates and notice terms.
- Revenue by customer for the last two or three years.
- Rosters, staff list, pay rates and the award or agreement that applies.
- Contractor agreements, if you use them.
- A list of vehicles and equipment, with any finance owing.
- Any franchise agreement and territory map.
The government's checklist for buying an existing business suggests buyers look at three to five years of financials. Having that history ready helps. See our full list of documents needed.
How can two similar cleaning businesses be worth different amounts?
This example is made up. Picture two commercial cleaning businesses with similar sales and similar reported profit.
The first cleans one large office group on a contract that can end on short notice. The owner still cleans several nights a week.
The second cleans dozens of smaller sites under written contracts. A supervisor runs the rosters. The owner spends their time quoting and managing.
The second business would likely be worth more. Losing any one customer would hurt it far less. Its profit also does not need a large deduction for the owner's own cleaning work.
Which Valuo report fits my cleaning business?
Choose by who will read the report. If it is for your own planning, the Business Value Report fits. If a buyer, lender, investor or partner will rely on it, choose the Professional Valuation Report.
| Business Value Report | Professional Valuation Report | |
|---|---|---|
| Suits | Your own planning and early sale preparation | A sale, purchase, loan or partner arrangement |
| Signed | No, but reviewed by a valuer before it is issued | Yes, by the valuer responsible |
| Fee, revenue under $1 million | $995 + GST | $1,495 + GST |
| Fee, revenue $1 million to under $2 million | $1,495 + GST | $1,995 + GST |
| Fee, revenue $2 million to under $5 million | $2,495 + GST | $2,995 + GST |
For revenue of $10 million or more, you receive a fixed fee quoted before any work starts. Your fee is set by revenue and report type, never by the value concluded.
Buying out a partner or moving the business into a new structure? Talk to Oliver Group. For tax on a sale, speak to your accountant.
What should I do next?
- See your fee in two taps: Get your fixed fee.
- Compare both reports and every band: pricing.
- Read the general guide: how much is my business worth.
- Buying one? Read valuing a business before you buy.
Questions
Are my cleaning contracts worth more than my one-off jobs?
Usually, yes. Regular work under a written contract is more predictable than one-off jobs. A buyer will check how long each contract runs, whether it can end at short notice and whether it can be transferred to a new owner.
What if one customer makes up a big part of my sales?
That is a risk a valuer must allow for. If that customer left, a large slice of profit could go with it. Long, transferable contracts and a good history with that customer can reduce the concern, but not remove it.
Does it matter if my cleaners are contractors rather than employees?
It can. A buyer will want to know the arrangements are set up properly, because getting it wrong can create costs later. Your accountant or lawyer can review how your workers are engaged.
Is a residential cleaning business valued differently from a commercial one?
The method is the same: ongoing profit, adjusted for risk. The risks can differ. Customer mix, contract size and the chance of a contract being retendered are all worth checking.
I still clean a lot of the sites myself. How does that affect value?
A valuer allows for the cost of paying someone else to do that work. If you also hold the customer relationships, a buyer will see a risk that customers leave with you.
General educational information, not advice. Examples are hypothetical and do not value a real business. The right treatment depends on the purpose, the evidence and the agreed scope.