Do I sell, close or carry on?

[jackfruit1234]

Hi All

i need to grab some advice if possible because I am stressing myself out trying to work out a solution.

I have an established and fairly profitable cleaning business, however during the lockdown times when we had to close I started another project. Which I enjoy but takes up a lot of time. This was ok because the cleaning business was quiet and I had a couple of staff who basically do all the labour work and i do the admin stuff, which i could do of an eve etc.

Anyway fast forward to now and the cleaning business is busy, again! Very busy actually, but i am having endless staff issues with covid/isolation/family members being ill/ not turning up etc etc

Before, this would be ok, because i could cover shifts etc, but now i have another project I am having to cancel jobs or sub contract them to another company and then make no money from said job.

my dilemma is, do i close down the cleaning business (which is established, profitable (in the right hands) and busy) or do i try to sell it (the issue with a sale is my business took a 25k BBL during lockdown which we now need to pay off) so i worry this would put off potential buyers.

I guess the thought of simply closing it down seems a bit of a waste, as the company has a great brand and I am getting lots of enquiries.

or is there another option I haven't thought of?

Sorry for the long rant, I guess in these times it would be great to have a business partner i could talk these things through with!

 

[AstEver]

I think you need to describe the project you are working on, its feasibility, potential, risk, investment required etc. because from what I understand you are asking whether you should replace a good and growing business with undefined X. The ventures need to be compared.

 

[The Byre]

Selling your cleaning business is probably not an option for a whole series of reasons unless it is of considerable scale and doing a seven-figure turnover. As @AstEver states, any answer has to be made knowing what business number two is.

 

[jackfruit1234]

Yes good point. The other project is in video production and it's something I enjoy doing and has great personal scale, but it is a very different scenario to being a director of a cleaning company. Within video production I am paid for my time, therefore the more time I spend on it, the more money I make. But this is then detriment to the cleaning company.

In terms of figures the cleaning company turnover was 100k in it's first year and has been 60k for the past 2 years with covid. So it isn't BIG money we're talking, but it's a nice business to have if it's your sole project.

 

[japancool]

Hire a manager for the cleaning company?

 

[jackfruit1234]

Hire a manager for the cleaning company?

I think my history with unreliable staff is putting me off this solution. It's the labour work and reliable staff I need help with more so than admin/management, I just lack the time to train and keep an eye on new staff. However definitely food for thought.

 

[The Byre]

OK, so let's go -

Video production is more fun than cleaning kitchens and offices. The problem is scalability. One way around this is to let people do their own videos after you give them a few free online lessons on how to do this and how to set up such things as the old three-point lighting and stuff like that. Then they come to you for the colouring, editing and sexy graphics - all of which is cheap, quick and easy to do.

If video production is proving profitable, a combination of full production and help with DIY production could be the answer.

As @japancool says, a manager for the cleaning company seems to be the obvious solution - or maybe just giving some staff key responsibilities such as scheduling, leaving you to do the financials.

Selling the company - 60k turnover sounds more like a job and it's a whole lot harder to sell a job than a company that an investor can look at once a week or month to check that all is as it should be.

 

[jackfruit1234]

OK, so let's go -

Video production is more fun than cleaning kitchens and offices. The problem is scalability. One way around this is to let people do their own videos after you give them a few free online lessons on how to do this and how to set up such things as the old three-point lighting and stuff like that. Then they come to you for the colouring, editing and sexy graphics - all of which is cheap, quick and easy to do.

If video production is proving profitable, a combination of full production and help with DIY production could be the answer.

As @japancool says, a manager for the cleaning company seems to be the obvious solution - or maybe just giving some staff key responsibilities such as scheduling, leaving you to do the financials.

Selling the company - 60k turnover sounds more like a job and it's a whole lot harder to sell a job than a company that an investor can look at once a week or month to check that all is as it should be.

I appreciate this advice, thank you. I have some thinking to do...

 

[Lucan Unlordly]

I read an article some months ago about a chap who was in a very similar situation, albeit in a different business - sandwich rounds, supplying garages etc., but with the same staffing issues.

He was exploring the possibility of forming some sort of co-operative, giving staff the opportunity to buy into the company in the hope that doing so would solve any issues in one fell swoop.

 

[MBE2017]

Personally I would stick with the cleaning business, much more scaleable and easier to get sales etc. Unless of course you cannot stand it, walking away from a good albeit small profitable business as a potential 2/3 years or more of recession appears to be heading our way is, very brave IMO.

An old acquaintance of mine started a cleaning company, then franchised it, now apparently the largest UK cleaning franchise, also has a lawn care franchise launched alongside it several years ago as well, plus numerous care homes etc. All from cleaning houses.

 

[Nico Albrecht]

Just close it down or sell to a competitor for goodwill so you might get a few hundred £ out of it for the customer data base.

It makes no sense in times of covid that a cleaning business is having reduced turnover.

I know a couple bigger ones over here in NI doing residential and commercial cleaning and all at least doubled turnover during covid times and some went even higher than that.

Getting a cleaner in Belfast commercial or residential is a nightmare in the last year, all busy booked out months ahead and prices went up.

If you lost turnover in the last 19 months something else is wrong.

 

[simon field]

^^^ Agreed. Everyone’s busy. That means more dirt to clean up!

 

[BusterBloodvessel]

Without meaning to be blunt…60k turnover isn’t a business to sell, in my opinion. Gross profit is….? Well, whatever it is, it’s your wage, not profit for the business. You would basically be asking someone to buy a job.

 

[Talay]

Without meaning to be blunt…60k turnover isn’t a business to sell, in my opinion. Gross profit is….? Well, whatever it is, it’s your wage, not profit for the business. You would basically be asking someone to buy a job.

Yes, no shame in it but unless you can put one or two guys in there to run it and still generate significant profits then it is a job.

 

[Paul Norman]

It is a bit subjective, really.

I would suggest that the video production is never going to be as lucrative as the cleaning business - unless you have a really strong following, and get a reputation for being amazing. But you will only ever be selling your time.

Closing the cleaning business is an option. That will be a fair bit of admin, but all over fairly quickly. You might even have a bit of cash left over if you do this - obviously I don't see the accounts.

Running the business will, by the sound of it, require a manager. Like many people, and for good reason, you are hesitant about employing a manager. But that could be a seriously good option. Just put a LOT more thought into the recruiting than most people usually do, and think about the training. Every hour you spend training them will be a hour invested, not lost. A really good manager might need less training than you think, too.

The key to hiring a good manager? Whatever you were thinking of paying, up it. If you want someone to step in, add value, and not require you there to remind them to fasten their shoe laces, it will not be cheap. Here, I would be thinking around £40k PA. This is the north east. I suspect those of you in London just spat your coffee out and chuckled.

 

[KeithGreen]

Selling the business, or at least trying to sell it, is an option.

I sold a much smaller business in Edinburgh a couple of years ago, from memory the price was around £10k. In terms of the open market there are currently 21 commercial cleaning businesses for sale on a well known online market with turnover shown as between £5k and £75k. There are a few low cost online places you can advertise. It's not necessarily a quick option though, and approaching a few local competitors might achieve a quicker result, albeit probably a lower price.

In terms of "buying a job", well yes, but there are many buyers in this category, who are looking for independence and opportunity. Some go down the franchise route but there is a pool of buyers who don't/won't buy into a franchise and would prefer something independent.

Good luck.

 

[RadeyaGlobal]

Some great ideas other members have posted. I agree. Hiring someone to run the cleaning business while you pursue other things is a good idea. Giving ownership to workers or commission on revenue is also an option to motivate workers to do better work.