Commercial Cleaning Company Valuation
29 valuation methods · 43 industries · Results in under 10 minutes
In short
A commercial cleaning company is usually valued on seller's discretionary earnings: EBITDA plus the owner's pay. VA values recurring cleaning contracts as their own layer, at a multiple that rises with the share of customers who renew.
Who this is for
Owners of commercial janitorial and office, medical and facility cleaning companies preparing to sell, bring in a partner or plan succession, and buyers who need recurring cleaning contracts separated from one-off and post-construction work.
How is a commercial cleaning company valued?
VA values an owner-run commercial cleaning company on seller's discretionary earnings: EBITDA plus the owner's pay, because a buyer replaces the owner. Recurring cleaning contracts are valued as their own layer, at a higher multiple than one-off work, and that multiple rises with the share of customers who renew. One-off and post-construction cleaning is valued at a lower multiple that rises with the company's size and falls as work for new construction takes a larger share. Comparable companies, precedent transactions and a discounted cash flow check the result, and an asset floor keeps it above what the company's own assets would recover. This tool is informational only. Output is driven by your inputs and does not constitute a formal appraisal or certified valuation.
What drives the value of a commercial cleaning company?
- Recurring cleaning contracts, and the share of customers who renew them
- How contracts transfer to a new owner, and how much notice customers can give
- Hourly workforce stability: turnover, supervision and wage levels
- The mix of offices, medical sites and other facilities, and how concentrated it is
- Margins after labor, which decide how much of each contract reaches earnings
- How much of the business depends on the owner's own customer relationships
What lowers the value of a commercial cleaning company?
- Contracts that customers can cancel on short notice
- High turnover in the hourly workforce
- A few customers making up most of the revenue
- Thin margins after labor
How much is a commercial cleaning company worth? A worked example
Contracts and the renewal rate
A commercial cleaning company with $4 M of revenue, $400 K of EBITDA and $120 K of owner pay has $520 K of seller's discretionary earnings. Recurring contracts bring in 80% of revenue. If 85% of contract customers renew, the trades model values the contract share of earnings at 4.7× and the rest at 2.95×, about $2.26 M before debt. If only 65% renew, the contract multiple falls to 4.3× and the value to about $2.1 M.
Illustrative figures from the industry model alone. A full report blends it with a discounted cash flow, comparable companies and precedent transactions.
Value your commercial cleaning company in under 10 minutes
- 1.Upload your financial statements, or type the figures in.
- 2.Confirm the add-backs and the industry details the model asks for.
- 3.Get a valuation range, the methods behind it and a PDF memorandum.
Which numbers matter most?
Seller's discretionary earnings
EBITDA plus the owner's own pay and perks. VA uses the pay you enter; for a small owner-run company with no figure entered, it estimates a working owner's salary.
Contract revenue
Revenue under recurring cleaning contracts. VA values it as its own layer, separate from one-off jobs.
Contract renewal rate
The share of contract customers who renew each year. The multiple on the recurring layer rises with it.
New-construction share
The part of revenue from work on new buildings. It follows the building cycle, so VA lowers the multiple on one-off work as it grows.
Labor cost share
Wages and benefits as a share of revenue. Buyers read it to see how much of each contract turns into earnings.
What do you need to value a commercial cleaning company?
- Profit and loss statements and balance sheets, ideally for the last three years
- Figures for the current year to date
- A list of add-backs: the owner's pay and perks, and any one-off costs
- Loan and lease balances
- A list of cleaning contracts, with renewal dates and notice periods
- Revenue split between contracts and one-off jobs
- Labor cost as a share of revenue, and the owner's own pay
Example scenarios
Contracts customers keep
A janitorial company cleans the same offices every night under contracts most customers renew year after year. VA values that contract layer at a multiple that rises with the renewal rate, so the company is worth more than a peer with the same earnings from one-off jobs.
Contracts on short notice
A cleaning company's contracts can be cancelled on short notice. The model values the earnings and renewal rate entered, and buyers weigh how easily customers could leave after a change of owner.
Further reading
How to Value an HVAC Business in 2026: SDE and EBITDA Multiples
HVAC businesses sell for about 2x to 3.3x SDE for small shops and 5x to 9x EBITDA for larger firms. See 2026 multiples by size and what drives the number.
Is a Business Worth 3 Times Profit? When It Is 2x, When It Is 5x, and Which Profit Counts
Is a business worth 3 times profit? Often, if the profit is SDE. When 2x or 5x applies instead, which profit counts, and what diligence does to the price.
How Much Is a Business Worth With $500,000 in Sales? The Revenue Ladder From $100K to $3 Million
Revenue does not set a price, earnings do. See what businesses at $100K, $200K, $300K, $500K, $1M, $2M and $3M in sales are worth at 10%, 20% and 30% margins.
Frequently asked questions
How is a commercial cleaning company valued?
On seller's discretionary earnings, EBITDA plus the owner's pay, with recurring cleaning contracts valued as their own layer at a higher multiple than one-off jobs. Comparable companies, precedent transactions and a discounted cash flow check the result.
Why does the renewal rate matter so much?
Most of a cleaning company's revenue sits under contracts, so the share of customers who renew decides how much a buyer can count on. In VA's trades model the multiple on the contract layer rises with it.
Do contracts transfer to a buyer?
Most can, but some need the customer's consent. The model values the contracts you enter; buyers check the terms, and short notice periods lower what they will pay.
Does workforce turnover lower the value?
It does not change the model's multiple, but high turnover raises costs and puts contracts at risk, which buyers price in.
What if I pay myself less than a manager would cost?
Seller's discretionary earnings add back your own pay, so the level you pay yourself does not change that figure. A buyer who hires a manager will still look at EBITDA after a market salary, which is why the EBITDA-based checks are shown too.
Is this a certified appraisal?
No. This is an informational estimate. A bank loan, a partner buyout or an estate matter may require a certified business appraisal, which this does not replace.
Terms used on this page
- Seller's discretionary earnings (SDE)
- EBITDA plus the owner's own pay and perks. It shows what the business earns for one owner who works in it, and it is the figure most buyers of small owner-run businesses price.
- Add-backs
- Costs added back to reported earnings because a new owner would not bear them: personal expenses run through the business, one-off costs, or owner pay above what the role would cost to fill.
- Recurring revenue
- Revenue that repeats without a new sale, such as maintenance agreements, service plans or contracts customers renew.
- Renewal rate
- The share of customers on agreements or plans who renew each year.
- Valuation multiple
- The number earnings are multiplied by to reach a value. It rises with how durable the earnings are and how easily a new owner can keep them.
As featured in
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Last reviewed September 25, 2026 against VA's valuation models.