What is adjusted EBITDA for a cleaning company?

Adjusted EBITDA is earnings before interest, taxes, depreciation, and amortization, normalized to remove one-time expenses or owner discretionary costs. For cleaning contractors it typically equals revenue minus direct labor, supplies, subcontractor costs, and overhead. Buyers use it to compare profitability across businesses with different capital structures.

How is enterprise value calculated for a janitorial business?

Enterprise value applies a multiple to adjusted EBITDA. Service businesses like commercial cleaning typically trade at 2x to 5x EBITDA depending on contract quality, customer concentration, recurring revenue percentage, and regional market conditions. The multiple reflects what an informed buyer would pay for the cash flow stream.

What counts as overhead in a cleaning business EBITDA calculation?

Overhead includes rent, utilities, insurance, office salaries, marketing, vehicle costs, equipment depreciation, and administrative expenses that are not directly tied to labor hours on customer sites. Owner salary above market rate for the role is sometimes added back in adjusted EBITDA calculations to reflect true operational cost.

EBITDA Estimator

Buyers pay for transferable earnings — not founder hustle.

Inputs

Annual revenue ($)

Direct labor ($)

Supplies & subs ($)

Total overhead ($)

Owner add-backs ($)

Above-market owner pay, personal vehicle, one-time legal, and other non-recurring add-backs for Adjusted EBITDA / SDE.

Estimates adjusted EBITDA and enterprise value range for a commercial cleaning business based on annual revenue and operating costs. Used to gauge business valuation for sale, acquisition, or financing decisions.

Instruction

Enter your annual revenue and direct labor cost in dollars.
Add supplies and subcontractor expenses plus total overhead.
Read the adjusted EBITDA and mid-range enterprise value estimate.

Worked example

A contractor reports $1,500,000 annual revenue, $780,000 in direct labor, $120,000 for supplies and subcontractors, and $210,000 total overhead.

The calculator computes adjusted EBITDA by subtracting all operating costs from revenue, then applies a valuation multiple to produce an enterprise value range.

Questions operators ask

What is adjusted EBITDA for a cleaning company?: Adjusted EBITDA is earnings before interest, taxes, depreciation, and amortization, normalized to remove one-time expenses or owner discretionary costs. For cleaning contractors it typically equals revenue minus direct labor, supplies, subcontractor costs, and overhead. Buyers use it to compare profitability across businesses with different capital structures.
How is enterprise value calculated for a janitorial business?: Enterprise value applies a multiple to adjusted EBITDA. Service businesses like commercial cleaning typically trade at 2x to 5x EBITDA depending on contract quality, customer concentration, recurring revenue percentage, and regional market conditions. The multiple reflects what an informed buyer would pay for the cash flow stream.
What counts as overhead in a cleaning business EBITDA calculation?: Overhead includes rent, utilities, insurance, office salaries, marketing, vehicle costs, equipment depreciation, and administrative expenses that are not directly tied to labor hours on customer sites. Owner salary above market rate for the role is sometimes added back in adjusted EBITDA calculations to reflect true operational cost.