Offering a $100K Downpayment Prior to Full Acquisition of a Carpet Cleaning Company
We ran across a business owner on Facebook who was looking to try and sell their carpet cleaning company, and had a chat to learn more about their business.
Doing the Deal with the Right Partners
Upon acquiring a local carpet cleaning company ourselves this past September 2023, we hired an SEO and local leads expert after the first month of taking the company over.
He immediately became a big resource for us and decided to include him as an equity partner in this new acquisition of another carpet cleaning company in another state. We had a quick chat with him and his partner, which we realized would add even more firepower and credibility because of past carpet cleaning experience, contracting experience, experience with scaling service-based business, and a unique way of providing targeted leads.
Unique & Aggressive Deal Structure and Offer to the Sellers
Our new partners wanted to offer $100,000 as an immediate downpayment which would be 10% of the $1 million valuation of the company. We are asking for 3 to 12 months to complete the full acquisition to be able to finance the entire deal through the SBA and also have them seller-carry 10% of the remaining $900,000 which would be $90,000.
Upon acceptance of the LOI, we would immediately implement new systems and marketing for aggressive expansion into one of the neighboring cities. Since they were already spending quite a bit of money in marketing through magazines and paid advertising, we would funnel 1/3 of those dollars into our local SEO and leads strategy. 67% of those expenses would be eliminated immediately.
The current owners will help to either hire and train a new manager or train up a key staff member within the company. They will consult as needed, but help us to plug in the new systems with porting over their customer base and more.
Ultimate Win-Win Scenario For All Parties
The sellers will get an immediate $100,000 upfront.
The buyers will immediately get 50% of the cash flow.
The sellers will be able to start transitioning out of the daily tasks immediately.
The upfront cash will protect the sellers in case of the acquisition falling through.
Increasing the revenue and profits of the company will be shared, so everyone is able to ride the upside.
Buyers are protected because of immediate capturing of the profits and also have an opportunity to recoup the initial investment.
Recruiting additional talent will be easier because the owners of the first carpet cleaning acquisition have expertise within recruiting and staffing.
Sellers will retain full ownership of their company until the acquisition is complete.
The existing staff will have more opportunities for growth as expansion occurs.
It will go from a team of 2 owners to 6 partners, which provides more brainpower and speed for growth.
Please stay tuned as I will provide an update…
