A cleaning business valuation isn’t just a number. It can decide whether you walk away with a fair deal or leave tens of thousands of dollars on the table.
To get the price right, you have to look beyond revenue. What matters most is profit, repeat contracts, and how risky the income looks to a buyer. That’s why a janitorial company with recurring office cleaning contracts will sell for way more than one doing occasional house cleanings, even with the same revenue.
In this guide, we show you exactly how to value a cleaning business using methods based on real market data. We also explain what makes cleaning companies more or less valuable to buyers, and how to prepare for a sale or purchase.
Key Takeaways
- Most cleaning businesses sell for about 1.5 to 2.6 times SDE (owner pay + business profit), based on recent market data.
- Where your business falls in that range depends on how stable and low-risk it is—more recurring work and cleaner records usually mean a higher multiple.
- Businesses with stable cleaning agreements get much better prices compared to one-off work.
- Buyers pay more for cleaning businesses they can verify and that run without constant owner involvement.
When To Seek a Professional Valuation
For people looking to sell their cleaning businesses, a professional valuation is almost always necessary. Buyers and their lenders need numbers they can trust. An independent certified business appraiser can review your finances and help support your asking price.
Buyers should also consider professional valuations when purchasing larger cleaning businesses or when the deal involves significant risk, like unpaid loans or relying too much on just a few clients. The cost of an appraisal is small compared to overpaying by tens of thousands or missing red flags.
Where to find professional valuators
Business brokers handle both valuation and the sale process. They’re the most common choice for cleaning businesses. Many offer free consultations and charge fees based on successful sales.
Certified valuation analysts and accredited senior appraisers provide formal, written appraisals for legal and tax purposes. Find them through theNational Association of Certified Valuators and Analysts or American Society of Appraisers.
Look for experienced professionals with experience in the cleaning industry.
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How To Value a Cleaning Company: Common Methods
Buyers and appraisers use a few ways to figure out how to value commercial cleaning businesses and other cleaning companies, depending on the available financial data. Here are the most common methods for small and medium-sized cleaning companies.
Did You Know?
Even if you’ve hired a professional, understanding the methods below gives you negotiating power. If a seller claims their business is worth far more than industry averages, buyers can push back with data. Similarly, sellers can use data to justify premium pricing.
Seller’s discretionary earnings (SDE)
Seller’s discretionary earnings (SDE) show the total cash a single owner-operator gets each year from the business. It includes their salary, benefits, and the actual profit left over after all business expenses.
SDE is most commonly used for small to medium-sized cleaning companies where the owner is actively involved in running the business. It’s more accurate than net profit (the amount left to the business after paying all expenses) because it gives a fuller picture of how the owner compensates themselves.
Two identical cleaning businesses might show very different net profit figures because one owner pays himself a $60,000 salary, whereas the other takes on $20,000 and runs more personal expenses through the company.
SDE is calculated by starting with the company’s profit before taxes and adding back certain expenses and other items that increase the owner’s real benefit. These include:
- Owner’s compensation: Any salary, benefits, or personal perks the current owner pays themselves. Buyers add this back because a new owner may pay themselves differently.
- Non-cash expenses: Items like depreciation (how much you write off for equipment losing value over time). On paper, these reduce profit, but they aren’t “real” costs as no money actually leaves the company bank account.
- Interest: Loan interest is added because the new owner will have a different financing structure.
- Discretionary spending: One-time or non-essential business expenses (e.g., personal use of a company vehicle, one-time legal fees).
Once you calculate SDE, you multiply it by a number called a “valuation multiple” to estimate what the business is worth. This multiple comes from analyzing what similar cleaning businesses have actually sold for in recent transactions. Professional appraisers and business brokers maintain databases of these sales to determine the right multiples based on factors like business size, contract quality, and operational efficiency.
According to a BizBuySell analysis of cleaning and janitorial businesses sold between 2020 and 2024, the typical SDE multiple is 2.0. This means an average cleaning business sells for about 2x its annual SDE.
However, the report also shows that the SDE multiple can change based on the business’s quality:
- It can be as low as 1.5 times SDE for smaller businesses that require full-time owner involvement.
- It can go as high as 2.6 times SDE for larger, well-run companies with consistent performance and low owner involvement.
Example calculation
Imagine you’re selling your residential cleaning business and can show buyers these numbers:
- Pre-tax profit: $75,000.
- Owner salary: $40,000.
- Health insurance: $8,000.
- Vehicle expenses: $6,000.
- Equipment depreciation: $5,000.
This adds up to a total SDE of $134,000. And because you have mostly recurring weekly clients, clean books, and well-documented systems, you can use a relatively high SDE multiple of 2.3. This results in a $308,200 valuation.
EBITDA
EBITDA (earnings before interest, taxes, depreciation, amortization) is used for larger cleaning companies where the owner acts more like an investor than a daily manager. Because these businesses (e.g., large janitorial services or multi-location franchises) can run without the owner’s direct involvement, they attract different buyers and higher valuations.
To understand the company’s core profitability, you calculate its adjusted EBITDA by taking the net income and adding back:
- Interest from business loans.
- Taxes.
- Depreciation (the wear and tear on physical assets like vehicles or equipment).
- Amortization (the depreciating value on non-physical assets, like franchise fees).
- The owner’s above-market salary and other one-off expenses.
Unlike SDE, EBITDA “normalizes” the owner’s salary, adjusting it to reflect what it’d look like under typical, market-rate conditions. You add back only the portion of the owner’s pay that’s above the market rate for a manager. If the owner earns $80,000 but a manager would cost $55,000, you add back the $25,000 difference.
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Check out Investopedia’s “Understanding Adjusted EBITDA: Definition, Formula, and Calculation Guide.”
Example calculation
- A large janitorial company has an EBITDA of $400,000.
- Stable businesses of this size can attract multiples in the 3x to 4.5x range.
This results in a valuation between $1,200,000 ($400,000 x 3) and $1,800,000 ($400,000 x 4.5).
Revenue multiple
Revenue represents total annual sales—it’s all the money that comes into the business before paying any expenses.
Similar to the methods above, you can multiply revenue by an industry-standard multiple to get a quick estimate of a cleaning business’s value. But unlike SDE and EBITDA multiples, which use profit, revenue multiples are much smaller because sales figures alone don’t show profitability. So buyers keep the multiple low to avoid overvaluing the business.
BizBuySell reports cleaning businesses sold at between 0.43 and 0.87 times revenue between 2022 and 2024, with an average of 0.68. That means a cleaning business doing $500,000 in total sales, on average, sells for around $340,000.
This method is typically used only for quick screening when you’re first looking at a business, comparing similar operations, or valuing fast-growing companies (e.g., a new maid service with inconsistent expenses).
Example calculation
You’re considering purchasing a window cleaning business doing $600,000 in annual sales. Using a 0.70 revenue multiple gives you a $420,000 valuation.
Comparing the market
Looking at what similar cleaning businesses actually sold for nearby is another technique to consider. Appraisers use this to reality-check other methods and brokers pull recent sales data to back up asking prices.
It’s not used alone because finding truly comparable cleaning businesses isn’t easy. A 50-client commercial janitorial service isn’t the same as a 200-home residential cleaner. You need to adjust for service type, contract length, employee count, and local market, making it more likely errors will creep in. But for a rough estimate, it’s a good start.
Example calculation
You want to sell your cleaning business and see that 3 similar businesses nearby sold at 2.1, 2.4, and 2.6 times SDE. An average of 2.37 times your $250,000 SDE suggests you can expect $592,500, adjusted for your specific situation.
What Actually Drives Value in Cleaning Businesses
Understanding valuation methods is one thing. But knowing what pushes numbers higher or lower is just as important for buyers and sellers. To find out, we asked experts in the industry.
Recurring revenue beats everything. When asked what factors have the biggest impact when valuing a cleaning company, Vance Morris, owner of Eastern Shore Carpet Cleaning: “Recurring revenue. The higher this number, the higher the multiple on value.”
A cleaning business with most of its revenue coming from weekly office cleanings will sell for significantly more than one constantly hunting for the next one-time job.
Systems make businesses sellable. Vance also says having systems in place for marketing, operations, financials, employees, and customer retention “all significantly increase the value. The more turn-key [the business] is, the higher the multiple.”
Can the business run without the owner there every day? Are procedures written down for hiring, training, operating, and quality checks? Or is everything in the current owner’s head? Buyers pay more when they can jump in and start making profits.
Did You Know?
Cleaning software like Connecteam can help create systems for operations. You can onboard and train employees, organize scheduling, track time with GPS, manage quality through digital checklists, and so much more.
Clean financials are mandatory. Tim Conn, president and co-founder of Image One USA, says that “consistent revenue, recurring contracts, strong margins, and a diverse service mix” matter most. But you need to “keep financials clean and transparent” to prove it.
This means keeping business accounts separate from personal, ensuring tax returns matching financial statements, and tracking profit for each service type.
Diversify clients to add value. “A company of 750K could not be valued over 300K in case 80 percent of the revenue relies on one property management business,” said Jeffrey Hensel, broker associate at North Coast Financial:
That’s because, when a business relies too much on 1 contract, if that contract disappears, the whole business collapses. Buyers won’t pay much for that risk.
Tips for Getting an Accurate Valuation
For sellers
- Get books audit-ready. Separate personal and business expenses now. Document every SDE add-back with receipts and explanations. Consider a certified public accountant (CPA) review or audit to give buyers confidence.
- Document everything. Buyers need 3–5 years of financial statements and matching tax returns. If you’re selling, hire a CPA at least 12 months before listing.
- Reduce your role. Train a supervisor to handle daily operations. Delegate client calls, quality checks, and scheduling.
- Build steadier, repeat revenue. Stop chasing one-time jobs. Focus on landing cleaning contracts that automatically renew, like offices, medical facilities, or retail stores with weekly or nightly schedules. Multi-year agreements are even better.
- Build real systems. Write down your operations: how you hire cleaners, your training process, quality control procedures, and how you handle scheduling and supplies. For instance, do you use a top-notch cleaning business software solution?
- Measure your repeat contract revenue. Calculate which percent of your revenue comes from recurring contracts versus one-off jobs. Professional valuators and serious buyers will ask for this number during negotiations. A high recurring percentage is one of the strongest arguments for a higher valuation multiple because you can prove your revenue is stable and predictable, reducing the risk for the buyer.
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The BizBuySell Insight Report shows actual small business sale prices broken down by region and industry.
For buyers
- Verify everything. When valuing a cleaning business for sale, get tax returns and bank statements. Compare them to industry standards. For example, experienced cleaning technicians typically earn $20–$25/hour, and well-run operations keep owner earnings at 31% of revenue. If numbers are way off, find out why.
- Examine business contracts carefully. Understand the length, cancellation clauses, profit per account after labor and supplies, and service type. A portfolio of 50 commercial clients with year-long contracts beats 200 residential clients who can cancel anytime.
- Calculate real margins. Ask for a financial breakdown showing the income and all associated costs for each provided service type. Office cleaning has different margins than residential or specialized work.
- Assess the owner’s role. If the seller personally manages all clients, does quality checks, and handles sales, then you’re buying a job that depends on 1 person. Factor in the time needed to rebuild the relationships they handle.
Pro Tip
Use the Connecteam cleaning services app to systematize scheduling, track work with GPS verification, and create digital checklists, building the turn-key systems buyers want.
Getting Your Business Valuation-Ready
Valuing a cleaning business comes down to two things: how much reliable profit it produces and how risky that profit is for the buyer.
Most small cleaning companies are priced using SDE, while larger ones often use EBITDA. Revenue multiples can help with quick estimates, but they don’t show profitability.
If you’re selling, focus on clean financials, repeat contracts, and simple systems that run without you. Tools like Connecteam can help organize schedules, track time, and standardize quality checks, which can reduce day-to-day admin. Connecteam also offers a free plan for small teams (up to 10 users),making it easier to manage growth without adding extra admin work.
If you’re buying, verify the numbers, review contracts carefully, and watch for risks like client concentration.
If you want a strong, defensible price, consider getting a professional valuation or broker opinion before you negotiate.
FAQs
Calculate the seller’s discretionary earnings (SDE) by adding the owner’s salary and benefits to the business’s profit. Multiply that SDE by 1.5 to 2.6, based on factors like stability and customer contracts.
A commercial cleaning business is usually valued using SDE or EBITDA, depending on size. Buyers multiply profit by an industry multiple, then adjust for contract length, recurring revenue, client concentration, and owner involvement. Businesses with long-term contracts and clean financials sell for more.
A cleaning business multiple is the number used to value the business based on profit. Most small cleaning businesses sell for 1.5 to 2.6 times SDE. Larger, well-run companies may sell for 3 to 4.5 times EBITDA, depending on risk and stability.
Successful cleaning business profit margins average 31% of revenue for owner earnings. Margins vary by service type, labor costs, and operational efficiency.
A cleaning business typically makes $10,000 to $50,000 per month in revenue, depending on size and service type. Monthly profit varies widely, but well-run cleaning businesses often keep 15%–30% after expenses and owner pay.
For higher-value businesses or formal transactions, consider hiring a certified appraiser. For smaller deals, an experienced business broker often provides enough guidance.
FAQsYou can increase cleaning business value by building recurring contracts, cleaning up your financials, reducing owner involvement, documenting systems, and diversifying clients. Tools like Connecteam can help by organizing schedules, tracking time, and standardizing checklists—making the business easier to run without you./
Disclaimer
The information in this guide is intended for general informational purposes only and does not constitute financial, legal, or accounting advice. Business valuations vary based on each cleaning company’s unique circumstances. Always consult a qualified accountant, business broker, or certified appraiser before making financial decisions related to buying or selling a cleaning business.