Introduction: Unveiling the Realities of a Cleaning Business

This post delves into the intricate world of a small cleaning business, "A***** Team," through a series of site visits and conversations with key individuals. It explores the operational dynamics, financial complexities, and personal challenges faced by those within this industry. The insights gathered offer a valuable perspective on entrepreneurship, partnership dynamics, and the often-unseen realities of running a service-based business.

Part 1: A*** Team - Business Model and Sale Overview**

A***** Team, a professional cleaning service, offers a wide range of services including deep cleaning, painting, upholstery care, electrical handyman work, parquet and marble flooring polishing and varnishing, curtain cleaning, and handover/end-of-tenancy cleaning. The business primarily relies on high-margin services like flooring and curtain cleaning to drive profitability.

Key Business Highlights:

Client Acquisition: A mix of property agent referrals, HIP flyer contacts, online inquiries, and strong word-of-mouth.
Digital Presence: Investment in SEO and a functional website.
Financials:
- Monthly Revenue: $30,000 - $40,000
- 2023 Take-Home Earnings: $300,000
- Main Cost: Labor, with rates varying by skill level.
- Valuation: Initially listed for $80,000 (considering SEO, website, and equipment). An offer for $60k was later made, and rejected.
Operations:
- Staffing: Primarily freelancers and part-time workers.
- Management: Partner J handles administration; owner DN focuses on hands-on operations.
- Equipment: Owns necessary cleaning and maintenance equipment.
Market Position:
- Competitive Edge: Diverse, high-quality service range.
- Clientele: Regular customers in real estate and commercial sectors.
Most Profitable services

Parquet Flooring Polishing & Varnishing
Marble Flooring Polishing
Curtain Cleaning
Handover/End of Tenancy Cleaning

Challenges and Future Potential:

Challenges: Manpower limitations, lack of detailed financial records, and reliance on cash transactions.
Opportunities: Growth potential in untapped markets, streamlining operations with technology.
Reason for Sale: Personal reasons – physical and time demands, conflicts with partner.
Post-Sale Plans:
- DN: Plans to study Interior Design at NAFA and spend more time with her child.
- J: Considering a degree in cybersecurity.
Advice to New Owner:
- Develop an app (like Sendhelper) if technologically inclined.
- Focus on high-margin services (parquet/marble polishing, curtain cleaning).
- Aim for a $1/sq ft pricing strategy.

Business Origin: The owner, a former chef, started the business during COVID-19 after his restaurants closed. He initially worked as a contractor for Sendhelper, learning various trades on the job.

Part 2: Site Visit 1 - The Tropica, Tampines (January 24, 2024)

This visit provided a glimpse into the financial realities of specific jobs and highlighted potential management issues.

Financial Breakdown of Current Project (as shared by DN):

| Job | Revenue (SGD) | Cost (SGD) | Profit (SGD) | Profit Margin (%) | | ----------------- | ------------- | ---------- | ------------ | ----------------- | | Varnishing Job | 1,060 | -246 | 815 | 77 | | Painting Job | 2,750 | -984 | 1,767 | 64 | | LED Job | 850 | -260 | 590 | 69 | | Sofa Job | 240 | -150 | 90 | 38 | | Marble Job | 480 | -305 | 175 | 36 | | Parquet Job | 900 | -600 | 300 | 33 |

Key Observations:

Profitability Discrepancy: Contrary to claims, marble and parquet jobs showed lower profit margins due to higher costs.
Financial Management Concerns: DN's management of multiple companies and phone numbers, along with calculating earnings based on her personal bank account balance, raised red flags. This method likely overestimates actual profits.
Strained Partnership: DN shared details of a challenging business partnership marked by constant conflict and verbal abuse.
Background of male Business partner: Former financial advisor, has a tumultuous personal and professional history, including infidelity and legal trouble. His tendency of exploit vulnerabilities.

Part 3: Site Visit 2 - 33 Cairnhill Residences (January 23, 2024)

This visit focused on the perspective of a Bangladeshi worker, Min, providing insights into labor costs, working conditions, and the broader network within the cleaning and renovation industry.

Min's Profile and Work Experience:

Background: Arrived in Singapore from Bangladesh at 18, now 27.
Early Career: Five years with his first company, starting at SGD 600/month (SGD 18/day + SGD 3/hour overtime). He described the newbie pay, where they are still learning.
Wedding Gift: Received SGD 2,000 from his boss upon his marriage.
Current Wage: SGD 50/day (8 am - 5 pm), SGD 7/hour overtime, plus SGD 5 for dinner if working until 10 pm.
Transport: SGD 40 one-way lorry transport, SGD 80 round trip.
Skills:
- Waterproofing
- Polyurethane (PU) injection
- Hacking
- Painting
- Timber painting, marble polishing, and all parquet work
- Electrical certificate (CoreTrade)
Efficiency: Min can complete a full HDB toilet hacking, including debris cleaning, in just one day. For this, he is paid SGD 80, while the company charges around SGD 600. Standard Daily Rate: For most other day jobs, Min's rate stands at SGD 60 per day.
Future Plans: Return to Bangladesh for 4-6 months to obtain a driving license. Envisions a team with a lorry driver and 2-3 workers.
Monthly Lorry Rental: $2000

Trust and Reliability:

Clean record during his five-year tenure at his previous company.
Trusted by current employer ML and Bangladeshi boss, Abu.

Accommodation and Financials:

Current Residence: MOM-approved hotel in Geylang, SGD 650/month rent.
Worker Levy: SGD 600, but approximately SGD 1000 handed to the boss.
Insurance: Covered by contracting company, ML.

Bangladeshi Boss (Abu):

Owns a 100 sq ft warehouse with tools and equipment.
Financially secure, able to retire comfortably in Bangladesh.
Family: Highly educated but unemployed son, two daughters (one married).

Min's Personal Life:

Owns sizable land in Bangladesh.
Prefers a modest lifestyle with his wife.
Aims to work until his children are independent.

ML Boss (Malaysian):

Started in tiling, transitioned to property rentals.
Rented, renovated, and leased out 75 properties in two years, plus 40 in partnership.
Rental Prices: Master bedrooms SGD 1850, standard rooms SGD 1600, smaller renovated rooms SGD 1200.

Construction Work and Cost Details:

Parquet Job:
- Three rooms: SGD 600
- Two rooms: SGD 500
- One room: SGD 300
- Material Costs: Varnish (5L) SGD 35, Lacquer SGD 30, Thinner SGD 30.
- Transportation: SGD 80 round trip.
- Worker Compensation: Regular worker SGD 60/day, Freelancer SGD 150/day.
- Established businesses can achieve cost margins of 45%, while startups might face 80% costs, resulting in only 20% margins.
Marble Job: SGD 1 - SGD 1.2 per square foot.

Part 4: Insights on J

Background: Former intelligence unit member in the army.
Recent Job: Toilet marble stain removal, acidic paste cost SGD 100-200, job negotiated down from SGD 1,000 to SGD 600.
Business Fatigue: J** and his colleague appeared exhausted from running the business.
Met with other buyers, a team of 3 restaurant chain owner and 2 interior designers.

Conclusion: The Complexities of a Small Business

These visits and conversations paint a vivid picture of the cleaning business, highlighting the interplay of personal relationships, financial management, labor dynamics, and market pressures. The story of A***** Team, DN, J, Min, and others underscores the challenges and rewards of entrepreneurship, offering valuable lessons for anyone considering a similar venture. The initial ambition of acquiring the business gave way to a realization of the complexities involved, leading to a shift in perspective: perhaps building a similar venture from the ground up would be a more viable path.

Behind the Scenes: A Deep Dive into the Cleaning Business - Insights, Challenges, and Opportunities