Aircraft cleaning businesses have excellent growth potential as more airlines (and other transportation companies) embrace sanitation in a post-covid world. This helps put customers’ minds at ease and reduces liability. Consequently, there is a large market for established aircraft cleaning businesses, ship cleaning businesses (including cruises), and railcar cleaning businesses. This review discusses how you can sell your aircraft cleaning business for optimal value, along with insights into the industry as a whole and how to formulate a proper valuation for your business.
About The Aircraft Cleaning Industry
There is a much higher demand for aircraft cleaning businesses than many realize. The aircraft cleaning industry is a large industry comprising numerous different business types. The most notable types of aircraft cleaning (and cleaning for other forms of transportation cleaning) include:
- Aircraft equipment cleaning
- Interior aircraft cleaning
- Transportation cleaning
- Ship cleaning
- Railcar cleaning
- Building interior cleaning
There are many benefits to an aircraft cleaning business. For instance, there is relatively little competition for established businesses. There are excellent margins as well. In a post-covid world that includes a hyper-focused approach to sanitation on aircrafts, the demand for aircraft cleaning services has never been higher.
You should also check: HOW WILL YOU INVEST THE MONEY FROM THE BUSINESS SALE
How to Value Your Aircraft Cleaning Business
There are different types of business valuations. Additionally, there are different purposes for a business valuation. For example, you may need a valuation for wealth planning purposes, tax compliance, litigation support, or partnership disputes. However, a valuation to plan your exit strategy is different. The valuation goal for selling your business (or the stake in your aircraft cleaning business) is to determine the company’s fair market value. To do so, you should understand what a buyer considers when determining the quality of a business acquisition.
Of course, your financial information (i.e. discretionary earnings, net profit, EBITDA) play an integral role. This is often the first and primary thing that potential buyers consider. There is also “rule of thumb” data, which are also called valuation multiples. These valuation multiples use the most recent sales data to determine the calculated average of sales within the aircraft cleaning business. Specifically, the rule of thumb data for the aircraft cleaning industry includes:
- Aircraft cleaning businesses sold between 2.03 to 3.93 times the Seller’s Discretionary Earnings (SDE)
- Aircraft cleaning businesses sold between 0.45 and 0.58 times the annual net sales
- Aircraft cleaning businesses sold between 2.95 and 4.92 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
How to Sell Your Aircraft Cleaning Business
The steps to selling an aircraft cleaning business include business valuation, sale preparation, finding a buyer, due diligence, and sale closing. Of course, a personalized strategy is highly recommended to increase your chance of receiving offers that meet your goals and provide fair market value. Below is a general look at each step in the process.
Business Valuation
As discussed, a business valuation for your aircraft cleaning business provides an idea of how much prospective buyers are willing to pay based on the analysis of sales history within the industry, your company’s financial information, and the unique advantage you provide over the competition. This is a necessary first step to determining when and for how much you sell your business.
Sale Preparation
It helps to prepare the documents you will need ahead of time. Otherwise, the process could drag on, and you risk losing the interest and trust of prospective buyers. Your business broker and lawyer can help you prepare needed documents. In general, you will need your profit and loss statements (as well as additional financial statements), ongoing client information, tax returns, and insurance policies. Keep in mind, this is not an exhaustive list, and additional documents might be necessary as well.
Find a Buyer
Your business broker should understand how to bring your aircraft cleaning business to the market in a confidential manner. The process used to value your aircraft cleaning business should also provide a realistic valuation that allows you to receive qualified offers while ensuring the maximum sale price. This stage ends with a buyer signing a letter of intent (LOI) to purchase your aircraft cleaning business. Of course, before this happens, negotiations, contingencies, and more might be negotiated as well.
Due Diligence
The due diligence process provides the buyer an opportunity to review all aspects of the business, confirm financial data, and ask questions. Although the seller should be transparent and forthcoming, this should not be a disorganized process that drags on for weeks and months. Instead, your business broker should help ensure a speedy process that is organized to minimize the time between the letter of intent and the signing of the purchase agreement.
Sale Closing
The sale closing involves documentation review and final signatures. Your lawyer (and the buyer’s lawyer) may be present, but most of the legal and brokerage work is completed before the closing begins. So, you can expect a relatively simple process that focuses on the transfer of the business and the confirmation that the payment for the business is sent.
Plan Your Exit Strategy With Sigma Mergers and Acquisitions
Sigma Mergers and Acquisitions help owners plan their exit strategy. We do this by providing you with a free business valuation and customizing the sale strategy for your aircraft cleaning business. If you are interested and would like more information, then schedule a consultation at a time that is convenient for you.
Scot Cockroft is the Owner & President of the #1 ranked Business Brokerage, Business sales and M&A firm in Texas. Scot has been named Named Deal Maker of the Year by Dallas Business Journal.
He is committed to a “different” type of business brokerage firm, one that is NOT about a sales pitch but, rather, results! In short, a business brokerage firm that is committed to performance-based compensation. Scot believes in these principles as well as a candid honesty with clients. His candid style often takes buyers and sellers by surprise, but is often what assures successful connections between the two.
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