Pressure Washing Business Buyer Checklist (Australia)

Pressure Washing Business Buyer Checklist

Work through these phases in order. Phases 1 and 2 are for initial screening — complete them before you request financials. Phases 3 through 5 are confirmatory due diligence after you have an accepted offer or conditional contract.

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Phase 1: Initial Business Assessment (Pre-Offer)

Use this phase to decide whether the business is worth pursuing before you invest significant time.

Revenue and client base

• Confirm the revenue split between commercial and residential clients. Write down the percentage. Anything under 25 percent commercial is a warning sign for transferability.
• Ask how many active clients the business has served in the last 12 months. "Active" means invoiced at least once.
• Identify the top five revenue-generating clients by name (or anonymised description if under NDA). What percentage of total revenue do they represent?
• Ask how many of those clients have been with the business for more than two years.
• Check whether any commercial clients are under written agreement. Ask to see a sample contract (redacted is fine at this stage).

Owner dependency

• Does the owner personally attend jobs, or does the crew operate independently?
• Are the key commercial clients relationships with the owner as an individual, or with the business entity?
• Would any commercial clients be likely to seek competing quotes if ownership changed?
• Does the business have any staff or regular subcontractors, and can they describe what each person's role is without the owner present?

Business operation basics

• How long has the business been operating under current ownership?
• Is there a job management system in use (ServiceM8, Tradify, etc.)? If yes, how complete are the records?
• Does the business have a Google Business Profile, and what is the current rating and review count?
• Are there any pending disputes with clients, staff, or suppliers?

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Phase 2: Equipment Assessment (Pre-Offer)

• List all equipment included in the sale. For each item, note: type, make/model, year of purchase, current condition (as described by seller), and ownership status (owned outright vs financed).
• Identify any equipment under finance. Ask for the current payout figures and confirm whether these will be cleared from the sale proceeds or assumed by the buyer.
• For each hot-water unit: ask for the last service date, service records, and any known issues. Hot-water units are the most capital-intensive item in a pressure washing business and the one most sellers quietly defer maintaining.
• For any elevated work platform or specialised commercial equipment: confirm current certification status and service history.
• Ask whether any major equipment item is scheduled for replacement or repair within the next 12 months.
• Check the condition of vehicles included in the sale. Ask for service records.
• Confirm that all hoses, lances, and ancillary equipment are included and in serviceable condition.
• Note any equipment that is leased rather than owned and understand the lease terms.

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Phase 3: Financial Verification (Post-Offer, Pre-Settlement)

• Obtain three years of financial statements (profit and loss, balance sheet) prepared by an accountant.
• Obtain three years of tax returns lodged with the ATO, including BAS lodgements. Reconcile total revenue against BAS GST collections to verify revenue is real.
• Obtain three years of bank statements (business accounts). Cross-reference deposits against invoiced revenue.
• Request a client-by-client revenue breakdown for the last two years. Confirm which clients are active and which have churned.
• Work through the Seller's Discretionary Earnings (SDE) calculation with your accountant. Identify every add-back the seller is claiming and verify each one is genuine and non-recurring.
• Common add-backs to scrutinise in pressure washing businesses: vehicle expenses (personal use component), phone and fuel (personal use), equipment written off in the year of purchase, owner's superannuation contributions above the standard rate, any one-off repairs or insurance payouts included as revenue.
• Check accounts receivable: are invoices being paid on time? What is the average debtor days figure? High debtor days in a small service business can indicate client relationship problems.
• Confirm that all GST/BAS obligations are current. Ask the seller to provide ATO correspondence confirming no outstanding liabilities. Obtain a statutory declaration if needed.
• Confirm superannuation obligations for any employees are fully paid up. Unpaid super becomes a liability of the new owner if not cleared at settlement.
• Check PAYG withholding compliance for any employees or workers classified as subcontractors.

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Phase 4: Commercial Contract Review (Post-Offer, Pre-Settlement)

This phase applies if the business has commercial clients. If it's purely residential, move to Phase 5 and note the impact on your valuation.

• Request copies of all written commercial client agreements. Read the key terms: contract duration, renewal mechanism, termination for convenience clauses, assignment provisions.
• Assignment provision — critical: does the contract allow it to be assigned to a new owner without the client's consent? If it requires consent, plan your approach to obtaining that consent before settlement.
• Check expiry dates. How much contracted revenue is at risk of non-renewal within 12 months of settlement?
• Identify any commercial clients with a "termination for convenience" clause that allows them to exit with short notice. Price that risk into your offer.
• Confirm the pricing terms in each contract. Are they fixed, CPI-indexed, or subject to annual negotiation?
• For any client accounting for more than 20 percent of revenue: consider requesting an introduction before settlement so you can assess the relationship independently.
• Confirm that the seller will not solicit or approach commercial clients after settlement. Check that the sale agreement includes an appropriate restraint of trade clause covering this.

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Phase 5: Legal, Compliance, and Licensing (Post-Offer, Pre-Settlement)

• Confirm that all operators holding Working at Heights certification (or equivalent in your state) will either remain with the business post-settlement or that you have a plan to replace that credential.
• If the business performs rope access work or operates elevated work platforms: confirm current licence and certification status for all relevant staff. These credentials are held by individuals, not the business entity.
• Public liability insurance: confirm the current cover amount (minimum $10 million for most commercial clients; $20 million for some councils and industrial facilities). Check the renewal date and that no claims have been made in the last three years.
• Workers' compensation: if the business has employees, confirm current workers' comp cover is in place and premiums are up to date.
• Check whether any state-specific licencing applies for commercial pressure washing in the relevant jurisdiction. Requirements vary by state for work involving chemicals, working at heights above certain thresholds, or asbestos proximity.
• Environmental compliance: confirm the business disposes of wastewater from pressure washing jobs in compliance with local council and EPA requirements. Commercial pressure washing can generate wastewater containing hydrocarbons, detergents, and other regulated substances.
• Check whether the business holds any trade waste discharge permits or council approvals for specific site work. These may not transfer automatically.
• Review any prior WHS incidents, near-misses, or WorkSafe investigations. Ask the seller directly and confirm in writing.
• Verify the ABN has been active for the duration claimed. Check ASIC records for the business entity and confirm there are no adverse entries or outstanding obligations.

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Phase 6: Post-Acquisition Risk Assessment

Complete this before you finalise your offer price. Be honest in your answers.

• What percentage of current revenue is at material risk of not transferring? (Be conservative — assume residential clients have 30 percent churn on ownership change, and commercial clients without written assignments have 20 percent.)
• After applying your retention estimate, what is the expected Year 1 SDE?
• At your expected Year 1 SDE, what multiple are you actually paying — not the multiple on the seller's reported SDE?
• What is the estimated capex required in the first 24 months for equipment replacement or upgrade?
• Have you stress-tested the deal: if you lose the top commercial client in month six, can the business still service the debt and pay you a reasonable wage?
• Is the handover period adequate? A minimum of four weeks is standard; eight weeks is better for commercial-heavy operations where the seller needs to make client introductions.

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Red flags — stop and reassess if any apply

• Revenue has declined more than 15 percent over two consecutive years with no clear explanation
• A single client accounts for more than 35 percent of revenue
• The seller cannot produce three years of tax returns
• Equipment is financed and the payout exceeds the agreed equipment value in the sale
• Key commercial clients are verbal-only arrangements with no documentation
• The seller refuses to provide bank statements or BAS lodgements
• Working at heights certifications are held only by the owner and the owner is not staying

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This checklist is designed to work alongside the financial red flags checklist, which covers the specific accounting patterns that indicate undisclosed liabilities or inflated earnings across any service business acquisition.

For the valuation side of the analysis — what multiples to apply once you've verified the financials — read how much a pressure washing business is worth in Australia.