BUSINESS PLAN ON CLEANING
SERVICE INDUSTRY
Course Name : Entrepreneurship and SME Management
Course Code
: FB-205
Report on
: Business plan (Cleaning service industry)
Submitted To:
Chandon Kumar Pal
Assistant Professor
Department of Finance & Banking
Jatiya Kabi Kazi Nazrul Islam University
1
31 October, 2021
Chandon Kumar Pal
Assistant Professor
Department of Finance and Banking
Jatiya Kabi Kazi Nazrul Islam University
Trishal, Mymensingh
Subject: Submission of a report.
Dear Sir,
I am submitting herewith my report entitled “Business Plan on Cleaning Service” as
fulfilment of the course requirement.
The purpose of this report is to know the basic concepts on how to make an effective
business plan. The report shows a detail scope of works, strategies, work plan and
contractual condition.
If you need any information about this project, please inform me. I would be delighted if the
report contains entire information about my business plan.
Your obediently,
Jahidul Islam Joy
ID No.: 19132643
Session: 2018-2019
Department of Finance and Banking
Jatiya Kabi Kazi Nazrul Islam University
2
Table of Contents
Executive Summary ............................................................................................................................ 4-5
Company Overview ............................................................................................................................. 6-7
Industry Analysis
……………………………………………………………………………………………………………………….8
Customer Analysis …………………………………………………………………………………………………………………… 9-10
Competitive Analysis …………………………………………………………………………………………………………………11-12
Marketing Plan ………………………………………………………………………………………………………………………….13-14
Operations Plan ………………………………………………………………………………………………………………………… 15
Management Team …………………………………………………………………………………………………………………16-17
Financial Plan …………………………………………………………………………………………………………………………..18-22
3
1. Executive Summary
JIJ CLEAN, located at Mymensingh is a new home cleaning service providing home and
apartment cleaning to its clients. JIJ CLEAN is headed by Jahidul Islam Joy, an experienced
home cleaner and cleaning services manager.
JIJ CLEAN will focus on providing weekly home cleanings to upper class residents as well as
specialty cleaning services to other clients. These specialty services will include exterior
cleaning services (porches, patios, building exteriors) and deep cleaning of homes that have
heavy build-up of debris and garbage (preparation for moving or estate sales).
The founder, Jahidul Islam Joy, will also develop proposals for cleaning services specific to
the needs of the client and the amount of space to clean. He will write newsletters to clients
describing the best practices in home cleaning, reviewing new products, and answering
frequently asked client questions.
Customer Focus
JIJ CLEAN will primarily serve the residents within a 10 miles radius of our location. The
demographics of these customers are as follows:
•
•
•
•
•
•
27,827 residents
Average income of Tk. 74,700
58.9% married
49.6% in Mgt./Professional occupations
75% of residents are homeowners
Median age: 38 years
In addition to this relatively wealthy adult demographic for a cleaning service business,
there are five large apartment buildings in the area. The management companies of these
apartment buildings may require cleaning services to prepare for new tenants to move in.
Success Factors
JIJ CLEAN is uniquely qualified to succeed due to the following reasons:
•
JIJ CLEAN will fill a specific market niche in the growing community we are entering.
In addition, we have surveyed the local population and received extremely positive
feedback saying that they explicitly want to make use of our services when launched.
•
Our location is in a high-wealth area where customers are in need of house cleaning
services.
•
The management team has a track record of success in the cleaning services
business.
4
•
The local area is currently underserved and residents rely on independent and often
illegal house cleaners.
Financial Highlights
JIJ CLEAN is seeking a total funding of Tk.1,000,000 of debt capital to open its cleaning
service. The capital will be used for funding capital expenditures and location build-out,
hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
•
Headquarters design/build: Tk. 500,000
•
Working capital: Tk. 500,000 to pay for marketing, salaries, and lease costs until JIJ
CLEAN reaches break-even
Top line projections over the next five years are as follows:
Financial Summary
Revenue
FY 1
560,401
FY 2
782,152
FY 3
1,069,331
FY 4
1,379,434
FY 5
1,699,644
Total Expenses
EBTIDA
Depreciation
328,233
232,168
7,000
391,429
390,722
7,000
552,149
517,182
7,000
696,577
682,858
7,000
776,687
922,956
7,000
EBIT
225,168
383,722
510,182
675,858
915,956
Interest
6,016
5,264
4,512
3,760
3,008
Pre Tax Income
Income Tax Income
219,152
76,703
378,458
132,460
505,670
176,985
672,098
235,234
912,948
319,532
Net Income
142,449
245,998
328,686
436,864
593,416
Net Profit Margin
25%
31%
31%
32%
35%
5
2. Company Overview
JIJ CLEAN, located at Mymensingh is a new home cleaning service providing home and
apartment cleaning to its clients. It is headed by Jahidul Islam Joy, an experienced home
cleaner and cleaning services manager.
While he has been in the cleaning services sector for some time, it was in January, 2021 that
he decided to launch JIJ CLEAN. Specifically, during this time, Jahidul Islam Joy met with a
former friend and fellow independent cleaning services provider in Dhaka who has had
tremendous success. After discussing the business at length, he clearly understood that a
similar business would enjoy significant success in this town.
Specifically, the customer demographics and competitive situations in Dhaka were so similar
that he knew the business would work. After surveying the local population, Jahidul Islam Joy
went ahead and founded JIJ CLEAN.
JIJ CLEAN’s History
Upon returning from Dhaka, surveying the local customer base, and finding a potential retail
office, Jahidul Islam Joy incorporated JIJ CLEAN as an S-Corporation on March 2021.
The business is currently being run out of home office, but once the lease on JIJ CLEAN’s office
location is finalized, all operations will be run from there.
Since incorporation, the Company has achieved the following milestones:
•
Found office space and signed Letter of Intent to lease it
•
Developed the company’s name, logo and website located at www.jij-clean.com
•
Determined equipment and fixture requirements
•
Began recruiting key employees
JIJ CLEAN’s Services
JIJ CLEAN will be able to provide clients with the following services:
•
Weekly Home Cleaning: regular, general home cleaning services, customized to the
needs of each client, for apartments, small homes, and large homes.
•
Exterior Cleaning: cleaning of exterior walls, patios, porches, driveways, etc
•
Deep Cleaning: garbage removal and deep cleaning of walls, floors, and carpets for
tenants who are moving, home sales, and landlords of apartment buildings
6
•
JIJ CLEAN Newsletter: frequently asked questions, cleaning tips, and product reviews
for clients
As we understand, the key to a successful cleaning service is being responsive to the particular
needs of clients. We will have a full-time assistant manager who will, among other things,
manage operations including scheduling, supply procurement, inventory, and bookkeeping.
This will free up the time of us to work on sales and customer service.
7
3. Industry Analysis
The cleaning services industry is generally strongly correlated with the strength of the real
estate market. However, last year, according to Investopedia, the commercial and
residential contract cleaning services market was $48.4 million in Bangladesh. Investopedia
reports that the market will grow at 5.3 % annually for the next three years and that “gains
will be driven by the shift toward “”do-it-for-me”” cleaning services in the residential market
and by the outsourcing of noncore functions in the non-residential market.”
This industry includes non-residential interior building, residential interior, swimming pool,
street and parking lot, exterior building, chimney, transportation equipment, window, and
more. Within the residential interior segment, some providers specialize in areas such as
carpets, kitchens, walls, and floors. Major competitors include HandyMama Sheba Lagbe,
Nepcons, Bangladesh maid agency etc., although local markets are often dominated by
small businesses.
Trends in the industry include the following:
•
Customer interest in companies that clean with all-natural or environmentallyfriendly products only.
•
Customer interest in companies that clean with non-toxic products.
•
Market downturn leads to growth in residential customers hosting dinners and
events at their homes to save money, leading to increase in cleaning services before
and after such events.
•
Customer interest in expert advice as to how they clean and maintain their homes
better.
8
4. Customer Analysis
Demographic Profile of Target Market
JIJ CLEAN will serve the residents of Mymensingh and the immediately surrounding areas in
a 10 miles radius.
The area we serve is populated mostly by the middle and upper class and lead busy
lifestyles; as a result, they have both the need for cleaning services and the means to pay for
it.
The precise demographics of the town in which our location resides is as follows:
Mymensingh Sadar
Sankipara
Total Population
26,097
10,725
Square Miles
6.89
3.96
Population Density
3,789.20
2,710.80
Population Male
48.04%
48.84%
Population Female
51.96%
51.16%
Age 18-24
3.68%
3.52%
Age 25-34
5.22%
4.50%
Age 35-44
13.80%
13.91%
Age 45-54
18.09%
18.22%
Income 50,000 to 74,999
11.16%
6.00%
Income 75,000 to 99,999
10.91%
4.41%
Income 100,000 to 124,999
9.07%
6.40%
Income 125,000 to 149,999
9.95%
8.02%
Income 150,000 to 199,999
12.20%
11.11%
Target Population by Age Group
Target Population by Income
9
Income 200,000 and above
32.48%
54.99&
Customer Segmentation
The Company will primarily target the following three customer segments:
1. Middle and Upper Class Homeowners: The area in which the Company will operate
has a significant population of homeowners. Many homes have two working parents
with limited time to keep up with housekeeping and cleaning. Even homes with one
parent staying at home can have a need for regular cleaning services or specialty
services from time to time, especially when there are three or more children to care
for.
2. Wealthy Renters: Many wealthy singles and couples chose to rent apartments and
homes rather than to buy because of a temporary living situation in [company
location]. These renters tend to work long hours at consulting companies, banks, and
financial services and do not have the time or interest in cleaning their apartments
regularly.
3. Apartment Management Companies: There are five apartment buildings in the
vicinity which may be interested in outsourcing their cleaning services for apartment
units when they are vacated.
10
5. Competitive Analysis
Direct & Indirect Competitors
The following two cleaning services firms are estimated to serve 50% of the house cleaning
services customers within a 10 miles radius of JIJ CLEAN, as determined by a survey of 100
homes. Independent housekeepers are used by many more, although the exact number is
difficult to determine.
HandyMama
HandyMama is an established local business and home cleaning service that has been in
operation for five years. The company earns approximately half of its revenue through
residential cleaning and half through business and office cleaning. JIJ CLEAN is very familiar
with this competitor, having served as its sales manager for the past three years.
HandyMama’s customer reviews are often mixed. There are often reports of cleanings being
incomplete. While HandyMama does send crews back to redo any shoddy work, their
reputation has been damaged by these incidents over time.
JIJ CLEAN will create a brand built around the specific cleaning needs of homeowners and
renters rather than serving both home and business owners.
Amar Sheba
Amar Sheba is a nationally franchised brand that cleans more than 300,000 homes,
apartments, and condos in Bangladesh every month. Founded in 2010, the company has
more than 300 locations and calls itself the largest home cleaning franchise network in
Bangladesh.
Amar Sheba operates on a similar model to JIJ CLEAN, providing customized proposals to
clients based on an estimate of their specific needs. They encourage weekly service, but can
provide service on any schedule chosen by a customer or one-time cleanings.
However, Amar Shebadoes not offer any rates on their website, insisting that a home
inspection must take place before any cleaning rates can be discussed. JIJ CLEAN will offer
basic rate ranges (competitive with Amar Sheba) on their website, helping customers to
come to a decision faster. Furthermore, JIJ CLEAN will build its brand as a cleaning expert
through its intelligent weekly newsletter.
Independent Housekeepers
Dozens of independent housekeepers operate their own businesses, generally illegally, for
area residents. These housekeepers advertise their services through word-of-mouth and
flyers in supermarkets and local stores. They offer low rates (as low as Tk. 100 per hour) to
clean homes and require payment in cash.
11
While many customers seek out these “off-the-books” workers to clean their homes, others
are wary of hiring illegal workers who avoid taxes and don’t hold insurance or business
licenses. Those who are legal to work in this country can potentially become employees of
JIJ CLEAN, effectively buying them out as competition.
Competitive Pricing
Weekly Cleaning
1000-1500
1500-2000
1250-1750
Deep Clean
1500-2000
2000-2500
1750-2250
Exterior Cleaning
3000-4000
3500-5000
2500-4000
Competitive Advantage
JIJ CLEAN enjoys several advantages over its competitors. These advantages include:
•
Client-oriented service: JIJ CLEAN will have a full-time sales manager to keep in
contact with clients and answer their everyday questions. Jahidul Islam Joy realizes
the importance of accessibility to his clients, and will further keep in touch with his
clients through weekly newsletters about cleaning.
•
Management: Jahidul Islam Joy has been extremely successful working in the
cleaning services business and will be able to use his previous experience to assure
clients of the care that JIJ CLEAN will take to do the job right. His unique
qualifications will serve customers in a much more sophisticated manner than JIJ
CLEAN’s competitors.
•
Relationships: Having lived in the community for 20 years, Jahidul Islam Joy knows
many of the local leaders, newspapers and other influences. Furthermore, he will be
able to draw from his ties to homeowners from his work at HandyMama’s Cleaning
to develop an initial client base.
12
6. Marketing Plan
JIJ CLEAN will use several strategies to promote its name and develop its brand. By using an
integrated marketing strategy, JIJ CLEAN will win clients and develop consistent revenue
streams.
The JIJ CLEAN Brand
The JIJ CLEAN brand will focus on the Company’s unique value proposition:
•
Client-focused home cleaning services, that treat each home individually and get the
job done right the first time
•
Service built on long-term relationships
•
Big-firm expertise in a small-firm environment
Promotions Strategy
➢ Targeted Cold Calls
JIJ CLEAN will initially invest significant time and energy into contacting potential
clients via telephone. In order to improve the effectiveness of this phase of the
marketing strategy, a highly-focused call list will be used; targeting individuals in
homes are most likely to demand the services of a cleaning company. As this is a very
time-consuming process, it will primarily be used during the startup phase to build an
initial client base.
➢ Referrals
JIJ CLEAN understands that the best promotion comes from satisfied customers. The
Company will encourage its clients to refer their friends and neighbours by providing
discounts for new client produced. This strategy will increase in effectiveness after the
business has already been established.
Additionally, JIJ CLEAN will aggressively network with local area hardware and cleaning
supply stores that sell products used by JIJ CLEAN. This network will generate referral
leads and give out flyers to customers at no charge in exchange for the steady
purchase of cleaning supplies. In return, clients who seek to use the high-quality
products that JIJ CLEAN uses will be directed to these stores.
➢ Internet
JIJ CLEAN will invest resources in two forms of geographically-focused internet
promotion—organic search engine optimization and pay-per-click advertising. The
Company will develop its website in such a manner as to direct as much traffic from
search engines as possible. Additionally, it will use highly-focused, specific keywords
to draw traffic to its website, where potential clients will find a content-rich site that
presents JIJ CLEAN as the trustworthy, well-qualified home cleaning firm that it is.
➢ Publications
JIJ CLEAN will place print advertisements in key local publications, including
newspapers, area magazines, and local sport programs. Additionally, the Company will
print brochures and place them in specific locations frequented by target individuals,
such as supermarkets and real estate offices.
13
➢ Pricing Strategy
JIJ CLEAN’s pricing will be competitive compared with HandyMama and lower than
Amar Sheba, although higher than illegal independent housekeepers. For regular,
weekly clients, pricing will be based on the average labour needed for a job and a
steady fee will be set. For one-time clients, or clients who are trying out the firm’s
services, a competitive hourly rate will be charged.
14
7. Operations Plan
JIJ CLEAN will carry out its sales operations through phone calls and home visits/consultations.
House cleanings will be scheduled within time ranges (i.e., 10 am – 4 pm Wednesday) rather
than at exact times to allow leeway for jobs that may be longer or shorter than expected.
After clients are served a number of times, appointments will be scheduled more tightly
together based on the average service time for each home.
The headquarters will not be used for client meetings, allowing savings on the renovation
costs needed for this space. This space will house the three full-time, non-cleaning staff as
well as cleaning supplies for the cleaning staff. Cleaning staff will be required to travel to client
homes in their own vehicles and will be reimbursed for travel expenses.
Jahidul Islam Joy will work as the primary salesperson for the company’s services, although
the assistant manager and administrative assistant may be trained in sales activities over
time. The assistant manager will manage company operations, under Jahidul Islam Joy’s
supervision. The administrative assistant will handle basic scheduling work for the assistant
manager, as well as light bookkeeping, answering phones, and organizing human resources.
Milestones
JIJ CLEAN’s long term goal is to become the highest quality provider of consistent home
cleaning services in the Mymensingh area. We seek to do this by ensuring customer
satisfaction and developing a loyal and successful clientele.
The following are a series of steps that will lead to this long-term success. JIJ CLEAN expects
to achieve the following milestones in the following months:
Date
Milestones
March
Finalize lease agreement
April
Design and build headquarter
May
Hire and train initial staff
June
Kick-off of promotional campaign
December
Reach break-even
15
8. Management Team
Every business need management team to run the business successfully. JIJ CLEAN also has a
management team. It consists of positions. They are•
•
•
•
•
Managing Director
Assistant Manager
Administrative Manager
Marketing manager
Staff Manager
The above roles will be played byPosition
Name
Managing Director
Jahidul Islam Joy
Assistant Manager
Sazib Sarker
Administrative Manager
Sanjida Yasmin
Marketing Manager
Saiful Islam Miraj
Staff Manager
Rakibul Islam
The roles of the following positions will be•
•
•
•
•
Managing Director: Managing director will supervise every operations and decisions
made for JIJ CLEAN
Assistant Manager: The assistant manager will manage company operations
Administrative Manager: The administrative assistant will handle basic scheduling
work for the assistant manager, as well as light bookkeeping, answering phones, and
organizing human resources.
Marketing Manager: The marketing manager will create marketing plans and execute
them.
Staff Manager: Staff manager will manage all staffs, record their activities.
16
Company Structure:
Managing Director
Assistant Manager
Administrative
Manager
Marketing Manager
Staff Manager
Hiring Plan:
In order to launch the business we will hire the following employees:
•
Cleaning Staff: 9 full-time, experienced home cleaners. Must be read and speak
Bangla in order to take directions directly from clients, as needed. Cleaning staff will
be added consistently to fill the growing need for JIJ CLEAN services.
17
9. Financial Plan
Revenue and Pricing
JIJ CLEAN’s revenues will come primarily from cleaning fees from residential clients.
JIJ CLEAN’s main revenue stream will be :
Revenue Stream
Average Price
% of Revenue
Regular weekly cleanings
1250
95%
Deep cleaning service
3500
1%
1750
4%
Exterior cleaning service
Key Cost Drivers
As with most services, labor expenses are the key cost drivers. Cleaning staff will earn a
competitive salary, allowing JIJ CLEAN to hire workers who previously operated independent
businesses. Furthermore, the costs of supplies and travel to client sites are expected to be
roughly 20% of revenue.
The major cost drivers for the company’s operation will consist of:
•
•
•
Salaries
Cost of cleaning (supplies and travel to homes)
Lease on company headquarters
Moreover, ongoing marketing expenditures are also notable cost drivers for JIJ CLEAN.
Capital Requirements and Use of Funds
JIJ CLEAN is seeking a total funding of Tk. 1,000,000 of debt capital to open its cleaning
business. The capital will be used for funding capital expenditures and location build-out,
hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
•
Headquarters design/build: TK. 500,000
•
Working capital: TK. 500,000 to pay for marketing, salaries, and lease costs until JIJ
CLEAN reaches break-even
18
Key Assumptions & Forecasts
The following table reflects the key revenue and cost assumptions made in the financial
model.
Number of customers per day
Per location
2022
4
2023
6
2024
8
2025
10
2026
12
Average order price
1750
Annual increase in order price
6.00%
Annual lease (per location)
Tk. 50,000
Yearly lease increase %
2.50%
Pro Forma Income Statement:
2022
2023
2024
2025
2026
Product/service 151,200
A
333,396
367,569
405,245
446,783
Product/service 100800
B
222264
245046
270163
297855
Total revenues
252000
555660
612615
675408
744638
Cost of goods
sold
57960
122245
122523
128328
134035
Lease
60000
61500
63038
64613
66229
Marketing
20000
25000
25000
25000
25000
Salaries
133890
204030
224943
236190
248000
4000
4500
5000
5500
Revenues
Expenses & costs
Other expenses 3500
19
Total expenses
& costs
271850
412775
435504
454131
473263
(19850)
142885
177112
221277
221374
36960
36960
36960
36960
36960
(56810)
105925
140152
184317
234414
23621
20668
17716
14763
11810
(80431)
85257
122436
169554
222604
Net Operating
Loss
(80431)
(80431)
0
0
0
Income Tax
Expense
0
1689
42853
59344
77911
(80431)
83568
79583
110210
144693
-
15.00%
13.00%
16.30%
19.40%
2023
2024
2025
2026
EBITDA
Depreciation
EBIT
Interest
PRETAX
INCOME
NET
INCOME
Net
Profit
Margin
(%)
Pro Forma Balance Sheet:
2022
ASSETS
Cash
16710
90188
158957
258570
392389
Accounts
receivable
0
0
0
0
0
Inventory
21000
23153
25526
28142
31027
20
Total Current
Assets
37710
113340
184482
286712
423416
Fixed Assets
246450
246450
246450
246450
246450
Depreciation
36390
73920
110880
147840
184800
Net Fixed
Assets
209490
172530
135570
98610
61650
247220
285870
320052
385322
485066
Debt
317971
272546
227122
181690
136273
Accounts
Payable
9660
10187
10210
10694
11170
Total Liabilities
327631
282733
237332
192391
147443
Share Capital
0
0
0
0
0
Retained
Earnings
(80431)
3137
82720
192930
337623
Total Equity
(80431)
3137
82720
192930
337623
247200
285870
320052
385322
485066
TOTAL
ASSETS
LIABILITIES & EQUITY
Total
Liabilities
& Equity
Pro Forma Cash Flow Statement:
2022
2023
2024
2025
2026
CASH FLOW FROM OPERATIONS
Net Income From (Loss)
(80431)
83568
79583
110210
144693
Change in Working Capital
(11340)
(1625)
(2350)
(2133)
(2409)
21
Depreciation
36960
36960
36960
36960
36960
Net Cash Flow from
Operations
(54811)
118902
114193
145037
179244
Cash from Equity
0
0
0
0
0
Cash from Debt
317971
(45424)
(45424)
(45424)
(45424)
Cash from Financing
317971
(45424)
(45424)
(45424)
(45424)
Net Cash Flow
16710
73478
68769
99613
133819
Cash at beginning of period
0
16710
90188
158957
258570
Cash at end of period
16710
90188
158957
258570
392389
Cash Flow from Financing
SUMMARY
22