The janitorial services industry entered Q2 2025 with steady demand but growing pressure from rising labor costs and economic uncertainty. While cleaning and facilities services remain essential, especially in sectors like healthcare, education, and commercial offices, firms are facing tighter margins and an increasingly competitive labor market. At Lion Business Advisors, we’ve seen stable buyer interest in well-established janitorial businesses, especially those with recurring contracts and a strong employee retention model.
Key Trends This Quarter
Margins Under Pressure: According to Vertical IQ, industry-wide profit margins are being squeezed due to increases in wages, healthcare benefits, and insurance premiums. Many firms are raising service prices in response, but customer pushback, especially among cost-conscious commercial clients, is limiting pricing power.
Commercial Market Caution: Office occupancy rates continue to vary by region, affecting demand for nightly janitorial services. Some urban markets are still seeing slower-than-expected returns to full office occupancy, dampening volume for nightly or five-day-per-week contracts.
Employee Retention is Critical: Labor shortages remain one of the top challenges. Companies that offer consistent hours, streamlined training, and competitive wages are performing better. Buyers are asking more detailed questions about staff turnover and onboarding processes during due diligence.
Texas-Specific Insight: In markets like Austin and Dallas, demand is holding up better than in some other states, thanks to strong construction activity and population growth. However, competition is high and buyers are favoring firms with strong Google reviews, digital marketing presence, and well-documented systems.
Outlook for Q3 2025
We anticipate continued consolidation in the janitorial space as smaller owner-operated firms seek retirement or exit amid operating stress. Buyers remain active, especially those already in the facilities services space looking to expand their footprint or secure new regional contracts. Valuation multiples are holding steady for businesses with $1M+ in revenue, sticky recurring revenue, and a low owner dependency model.
If you’re considering an exit, now is a good time to assess how your contracts, staff structure, and online presence stack up. Take our Sellability Score assessment to see how your janitorial business would perform in today’s market
Industry Insight Report: Janitorial Q2-2025
The janitorial services industry entered Q2 2025 with steady demand but growing pressure from rising labor costs and economic uncertainty. While cleaning and facilities services remain essential, especially in sectors like healthcare, education, and commercial offices, firms are facing tighter margins and an increasingly competitive labor market. At Lion Business Advisors, we’ve seen stable buyer interest in well-established janitorial businesses, especially those with recurring contracts and a strong employee retention model.
Key Trends This Quarter
Margins Under Pressure: According to Vertical IQ, industry-wide profit margins are being squeezed due to increases in wages, healthcare benefits, and insurance premiums. Many firms are raising service prices in response, but customer pushback, especially among cost-conscious commercial clients, is limiting pricing power.
Commercial Market Caution: Office occupancy rates continue to vary by region, affecting demand for nightly janitorial services. Some urban markets are still seeing slower-than-expected returns to full office occupancy, dampening volume for nightly or five-day-per-week contracts.
Employee Retention is Critical: Labor shortages remain one of the top challenges. Companies that offer consistent hours, streamlined training, and competitive wages are performing better. Buyers are asking more detailed questions about staff turnover and onboarding processes during due diligence.
Texas-Specific Insight: In markets like Austin and Dallas, demand is holding up better than in some other states, thanks to strong construction activity and population growth. However, competition is high and buyers are favoring firms with strong Google reviews, digital marketing presence, and well-documented systems.
Outlook for Q3 2025
We anticipate continued consolidation in the janitorial space as smaller owner-operated firms seek retirement or exit amid operating stress. Buyers remain active, especially those already in the facilities services space looking to expand their footprint or secure new regional contracts. Valuation multiples are holding steady for businesses with $1M+ in revenue, sticky recurring revenue, and a low owner dependency model.
If you’re considering an exit, now is a good time to assess how your contracts, staff structure, and online presence stack up. Take our Sellability Score assessment to see how your janitorial business would perform in today’s market
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