How to use the valuation calculator
- Choose an earnings basis. Most small cleaning businesses are valued on SDE (seller's discretionary earnings) — profit plus the owner's pay. Larger companies with a manager in place are often valued on EBITDA.
- Enter your numbers. Revenue, net profit before taxes, the owner's salary and draws (for SDE) and add-backs such as depreciation, interest and one-time or personal expenses.
- Answer the buyer questions. Recurring revenue, the owner's role, client concentration, growth and commercial contracts each move the multiple up or down.
- Read the range. You get a low–high value range and a midpoint, plus how the multiple was built. It's an estimate to plan with — not an appraisal.
How the estimate is calculated
SDE = net profit + owner's salary & draws + add-backsEBITDA = net profit + add-backs (interest, taxes, depreciation, one-time items)Multiple = base multiple + adjustmentsValue range = earnings × (multiple − 0.5) … earnings × (multiple + 0.5)
The calculator starts from a mid-range base multiple — 2.25× for SDE and 3.75× for EBITDA — and adjusts it for the things buyers usually pay more or less for:
| Factor | Adjustment |
|---|---|
| Recurring revenue | under 30%: −0.30 · 30–60%: 0 · over 60%: +0.40 |
| Owner's role | owner cleans: −0.40 · owner manages: 0 · runs without owner: +0.40 |
| Largest client | over 20%: −0.30 · 10–20%: −0.10 · under 10%: 0 |
| Revenue trend | declining: −0.40 · flat: 0 · growing 10%+: +0.30 |
| Commercial contracts | none: 0 · some: +0.15 · mostly multi-year: +0.30 |
The SDE multiple is kept between 1.0× and 3.75×, and the EBITDA multiple between 2.0× and 6.0×. These weights are simplified rules of thumb, not a valuation standard.
Estimate, not appraisal. Real offers depend on your books, contracts, staff, location, the buyer and deal terms (cash, seller financing, earn-outs). For a sale, loan or partner buyout, get a formal valuation from a qualified business appraiser or broker.
Typical valuation ranges for cleaning businesses
Typical ranges seen for small cleaning businesses in the US and Canada. Individual deals vary widely.
| Business type | Typical multiple |
|---|---|
| Owner-operated residential cleaning | often 1.5–3× SDE |
| Residential with crews and a manager | often 2–3.5× SDE |
| Commercial / janitorial with contracts | often 2.5–4× SDE, or 3–5× EBITDA for larger firms |
| Implied revenue multiple | often 0.3–1× annual revenue |
Worked example
A residential cleaning company has $600,000 of revenue and $90,000 of net profit. The owner pays themselves $60,000 and there are $10,000 of add-backs. 30–60% of revenue is recurring, the owner manages while crews clean, no client is over 10% of revenue, revenue is flat, and there are some written commercial contracts.
- SDE: $90,000 + $60,000 + $10,000 = $160,000 (27% of revenue).
- Multiple: base 2.25× + 0.15 for contracts = 2.40×.
- Midpoint: $160,000 × 2.40 = $384,000.
- Range: 1.90× to 2.90× → $304,000 – $464,000, about 0.64× revenue.
If the same business grew recurring revenue above 60% and could run without the owner, the multiple would rise to 3.20× — a midpoint of about $512,000 on the same earnings. That's why owners preparing to sell often spend a year or two building recurring revenue and a management layer first.
5 ways to increase what your cleaning business is worth
- Build recurring revenueWeekly and bi-weekly clients and commercial contracts make future income predictable — the thing buyers pay for most.
- Step out of the cleaningIf the business depends on you, a buyer is buying a job. Hire a lead or manager and document how the work is done.
- Spread your client baseNo single client should be a big share of revenue. Losing one shouldn't sink the business.
- Keep clean booksSeparate personal and business expenses, and keep tidy profit-and-loss statements for at least three years. Messy books lower offers or kill deals.
- Show steady growthA few years of rising revenue and profit support a higher multiple than one good year.