Business Plan

SAJE Cleaning Solutions

SAJE cleaning solutions is a residential house cleaning service serving upper-class families in Multan. Through generous human capital investments we will exceed our customer's expectations. We will be servicing the wealthy single-income households and affluent two-income households.

Submitted to Sir Khurram Bukhari Entrepreneurship

12/19/2011

Business Plan 2011

Name

Roll No.

Khawaja M.Jawad

BB-08-65

Shariq Hanif Ahmad Adnan M.Ehsan Ullah

BB-08-18 BB-08-38 BB-08-04

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Business Plan 2011

Preface:

The following business plan details the key aspects of our entrepreneurial venture. SAJE cleaning solutions is designed keeping in mind the sole purpose of liberating people from their hassles of getting their newly constructed house clean and ready for moving in. through dedicated service and professionalism, we are aiming at developing our market on the sole idea that our work will speak for itself. Our business plan includes details about our venture, the market segment we will be targeting, the marketing tools that we will be using to capture our customers. We have also outlined the relevant financial data and our pricing strategy with respect to our different packages. We hope that the core motive of our entrepreneurial venture is attained and we will be able to help people and make their life easier in whatever way we can.

-The SAJE team

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Dedication

With the name of ALLAH ALMIGHTY, the most gracious and the most beneficent of all ,who conferred us a lot of blessings although we were not worthy for those. We dedicate our report to our families who supported us whole heartedly during the preparation of this report and bore patiently as we worked long hours for the completion of this report.

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Acknowledgement
We would like to acknowledge the unprecedented help from our honorable teacher Sir Khurram Bukhari, who was our guide and mentor, and helped cultivate in us the entrepreneurial spirit.

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Table of Contents
Executive Summary....................................................................................................................................... 7 Business concept........................................................................................................................................... 8 Company hierarchy ....................................................................................................................................... 8 Objectives ..................................................................................................................................................... 9 Mission statement ........................................................................................................................................ 9 Business environment................................................................................................................................... 9 Marketing plan ............................................................................................................................................ 10 Market Segmentation ............................................................................................................................. 10 Promotion Strategy ................................................................................................................................. 11 Competitive Analysis ................................................................................................................................... 12 Sales Strategy .............................................................................................................................................. 13 Start-up Summary ....................................................................................................................................... 14 Financial data .............................................................................................................................................. 15 Start up expenses:................................................................................................................................... 15 Pro forma Profit & Loss account ................................................................................................................. 16 Pro forma Balance sheet ............................................................................................................................. 17 Pricing: ........................................................................................................................................................ 18 Golden package....................................................................................................................................... 18 Silver package ......................................................................................................................................... 18 Bronze package ....................................................................................................................................... 18 Conclusion: ................................................................................................................................................. 19

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Executive Summary
The purpose of this report is to give a detailed account of our entrepreneurial new business plan. The business idea that we proposed was that of a cleaning solutions company named SAJE Cleaning Services that would provide services to Upper and Upper-middle class people who have completed construction of their homes. The idea was based on the general observation that contractors or masons who take responsibility for the task of clearing the post construction debris do a sloppy job and often do more harm than good. So, as a solution to this problem, we shall provide our services, which shall be delivered by skilled and trained professionals. The business will be a partnership comprising of four partners. We have a high projected growth rate as the business is unique in nature and once the concept gains popularity, we shall have great competitive advantage over the potential new entrants. We formulated some short term objectives (3 years) which include exceeding expectations of our customers, increasing the number of our clients by 20% each year and generate enough cash flows to sustain the business. After this we presented our mission statement. The office of our business would be located in Business City, Multan. There is no formal business that offers the type of services that we shall offer, so there is a great potential for growth and expansion. Our only competition would be the informal parties which include contractors and laborers. Our target market includes people who appreciate a professional, reliable and trustworthy cleaning service and are willing to pay a premium for our services. We segmented our target market into two main categories: One income households (Annual turnover of more than Rs. 10 million) and two income households (Salaried people with individual incomes around Rs. 50000). Our marketing strategy would be three pronged namely colored brochures and newspaper ads, word of mouth referrals and cable TV ads. After developing a marketing strategy, we undertook a competitive analysis. Here we analyzed our business strategy to relate it to the potential competition and the strengths and weaknesses of our potential competitors. Then, we explored how to gain a distinct competitive advantage over the competition and create entry barriers once we are past the initial phases of our business. After establishing the marketing strategy, we go for the sales strategy. The people will interact with us through telephonic contact first and then face to face interaction at the place where services are required, so that estimation is more accurate. We then proceed to estimating our start up requirements (legal fees, marketing expenses, equipment, inventory, employee uniforms etc.). The next phase in our business plan is the presentation of financial data which includes initial expenses (Office rent and furniture, stationary, visiting cards, stamps, brochures & uniforms), pro forma profit and loss statement, balance sheet and pricing strategy.
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Business Plan 2011

Business concept
SAJE cleaning solutions is a residential house cleaning service serving upper-class families in Multan. Through generous human capital investments we will exceed our customer's expectations. We will be servicing the wealthy single-income households and affluent twoincome households. These targeted families will be willing to pay a premium for our service because of the high level of professionalism and trustworthiness that we offer, not replicated by any of our competition. SAJE Cleaning Service's projected growth rate is very high each year with respectable profit margins as a percentage of sales. By the end of year one, SAJE will have six additional employees. This house cleaning business plan will help us navigate the startup, and subsequent management of the business.

Company hierarchy

Director Operations (Khawaja M. Jawad)

Human Resource Manager (Ehsan Khan)

Marketing Manager (Shariq Hanif)

Finance Manager (Ahmad Adnan)

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Objectives
SAJE Cleaning Service's objectives for the first three years of operation include:

To create a service based company whose #1 goal is exceeding customer's expectations. To increase our number of clients served by 20% per year through superior service. To develop a sustainable home-based business, living off its own cash flow. The utilization of SAJE Cleaning Service on a regular basis by at least 30% of the leads that contact us for more information.

Mission statement
SAJE Cleaning Service's mission is to provide the customer with all residential cleaning services in an environmentally sound, completely trustworthy, and professional manner. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers. SAJE Cleaning Service, soon to be located in Multan, will offer residential home cleaning services. We will offer a wide range of services to the residential client, from general on site cleaning to a full plumbing and wiring checkup. The business will be based out of our own office rented in Business city, Multan. All the partners will be responsible for scheduling, estimates, training, inventory, ordering, payroll and customer care management. The business organizational type will be a partnership, with 8 employees within the first 6 months.

Business environment
The concept that we are offering is not currently in practice. We are providing cleaning services to the newly constructed homes and offices. It is common observation and our market analysis also suggests that people face a lot of problems in making their newly built homes and offices
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useable. We are of the view that our business will expand exponentially once people get to know about our services and listen to our satisfied customers. Up till now people hire labor to clean up the waste and debris left behind after construction but they lack the required skill and professionalism to do the job in the correct manner. People get annoyed when due to their inexperience; these workers do more harm than good.

Marketing plan
SAJE Cleaning Service will target the upper end of the house cleaning market. SAJE is offering a high quality, totally trustworthy service for high income households. Our service will ooze professionalism. We are perfectionists and this will be clear by our service. We will be targeting two segments of the populations: 1. Wealthy one-income households. 2. Affluent two-income households. Both of these targeted groups appreciate a professional, reliable, trustworthy, cleaning service and are willing to pay a premium to get this top shelf level of services.

Market Segmentation
We will target the market of people who have recently constructed their homes and also want to move in quickly. There are many housing schemes in our city where construction is in process or completed already. We are going to offer different packages for people of different income groups. Our main target is those people who belong to working class/office going/business oriented population. People who have little or no time to take the pain of supervising the cleanup work. We are dividing these people into two main categories; 1. One income households(one person earning a very handsome amount) 2. Two income households(salaried people)
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People belonging to the first class have 1 person earning (generally the male) and the spouse is dependant so there is no chance that she can take part in the supervision process. Generally this class will include the high earning business men or executives (with an annual turnover of more than Rs. 10 million) that usually go for constructing a house of minimum 15 Marla and above. People belonging to the second class usually have 2 people who are earning but are mostly salaried (with a monthly salary of more than Rs. 50,000 individually or more than Rs. 100,000 combined). It very difficult for any of the partner in the house holds to leave their job and look after the cleaning process. This group of people will can generally pay for the cleaning services but they want a complete package and want a guaranteed and honest working force. These people usually go for constructing houses from 5 Marla to 1 kanal. Additionally, there are some potential customers that MHCS has labeled as assorted "well-off" households. These are families that have the money for our services that do not fit neatly into the two previous categories.

Promotion Strategy
SAJE is focusing on these people because they appreciate a professional, reliable, trustworthy, and immaculate house cleaning service, and are more than willing to pay for this. The wealthy are consistent customers. These groups always have the money for our services, just as they always need/desire a clean house. Our customers desire quality and are willing to pay a premium price for a service that they can trust and which extrudes professionalism. This basically allows them to forget that they have to deal with whatever it takes to get a clean house. We do all of this in a seamless, customer centric manner. We will market our company through a three-pronged approach. One prong is the distribution of a color brochure detailing our services. The distribution of this document will be targeted to hit

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our chosen segment. This will be done by setting up strategic relationships with contractors and developers of newly emerging housing schemes. Along with brochures, news paper ads will also be printed in leading English and Urdu news papers with high circulation e.g. Nawa-e-waqt and Dawn or The News. The second prong of our approach will be through word of mouth referrals. Since, in Pakistan, the social network of people is very strong and they tend to talk about the experiences of their lives, so a positive word of mouth will definitely boost our business and help us make new clients. The third prong of our approach will be the airing of cable TV ads on local cable channels. These ads will depict a model house that our team has cleaned detailing the pricing and the different packages along with our salient features.

Competitive Analysis
The competitive analysis is a statement of the business strategy and how it relates to the competition. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage and the barriers that can be developed in order to prevent competition from entering your market. The potential competition that our business may face in its initial and growth stage is from all the contractors, sub contractors and laborers, who want to cash in on the clean up business, once the construction is done. The strengths of the existing potential competitors include experience, contacts, networking, and influence over existing workforce and well established credibility in the market. Their weaknesses include lack of professional expertise, well established procedures, highly trained personnel, carelessness on the part of the laborers due to temporary hiring and exploitation of workers. The strategy that would provide us with a distinct advantage over our potential competition is that we would highlight our expertise and professionalism (i.e. Cleaning would be our core/primary service whereas for our competition it would be secondary). Also our competitive advantage will be based on our large investment in human capital. SAJE begins with a training program for new employees. At the outset, employees will be trained on how to clean. Granted everyone has some idea on how to clean, but
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we will show them a methodical way producing a far cleaner home more efficiently. We will then be training employees to work effectively on teams. While there are some households that prefer individual cleaners instead of a team, a request that we are more than happy to oblige, we generally work in teams as they are more efficient. Working efficiently on a team takes training, and through this team training, we are able to make significant gains in efficiency. To create barriers for new entrants in our market, we would adopt the approach of building an excellent market image through timely and extremely satisfactory service that would be achieved through well defined processes and high emphasis on quality of services rendered. The first step is to look at the market from the customer's viewpoint. Based on our own observations and conversations with people who have interacted with contractors or sub contractors in the near past, we conclude that people prefer to have their homes cleared of debris and construction waste by specialized professionals and some even prefer to sell it. An analysis of strong performers will reveal the causes behind such a successful track record. This analysis, in conjunction with an examination of unsuccessful companies and the reasons behind their failure, should provide a good idea of just what key assets and skills are needed to be successful within a given industry and market segment. Through this analysis we will create a marketing strategy that will generate an asset or skill which our competitors do not have and will provide you with a distinct and enduring competitive advantage. Once we establish the key assets and skills necessary to succeed in this business and have defined our distinct competitive advantage, we will need to communicate them in a strategic form that will attract market share as well as defend it. Strategies primarily revolve around establishing the point of entry in the product life cycle and an endurable competitive advantage.

Sales Strategy
The sales process will begin through the qualification of leads generated from our marketing campaign. The marketing campaign will primarily generate leads through interest sparked from our brochures. Someone will call to receive more information about our service, while we will be able to give them an estimate over the phone, we would prefer to be able to get into their home and speak with them. On one hand we would be able to offer them a more accurate
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estimate. More importantly however, it provides us an opportunity to impress them with our company. We feel confident that since we are dealing with the affluent, who for many services are less price sensitive, are more likely to be impressed with our professionalism, "feel" an immediate trust bond forming, and sign up for the service. For those clients whom we are only able to speak with over the phone, we will initially quote them a price. Because they are less price sensitive then the general population, we will then detail why our service is priced a bit higher than most. SAJE Cleaning Service will explain all of the different training systems and methodologies that each employee goes through, and what expectations are reasonable for the customer to form about our superior service. This conversation will leave the prospective customer the impression that SAJE is indeed different from the run of the mill laborers who are hired to clean up and thus our prices are justified. Lastly, we will be qualifying the leads by explaining up front that our service is more expensive. This is not a fact that we are trying to hide. We are setting up an expectation for the customer that they can indeed expect more with our service.

Start-up Summary
SAJE Cleaning Service's start-up costs include equipment needed for a home-based business (to be detailed below), initial legal fees, marketing fees, cleaning equipment and supplies, uniforms, and signs for employee vehicles. The home office equipment includes a computer system (with the following minimum specifications: 2.88 GHz processor, 1GB RAM, 500 gigabyte hard drive, printer, and CD-ROM). Also required for the office are an additional land phone line, fax machine, and cellular phone. A few pieces of furniture will also be needed. The legal fees are used for the formation of the business as well as reviewing/generating employee and client contracts. Marketing fees are for the production of business cards and brochures.

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Cleaning equipment must also be purchased with one set of equipment per employee. The major per employee expense is a commercial vacuum cleaner (consumer models will not withstand continuous use) and assorted brooms, mops, and chemicals (biodegradable). Uniforms will be used to give off a professional image.

Financial data
Start up expenses:
Stationery Bill invoices Business cards Stamps Brochures Ball points Rs. 3600/1500 (4 bill books) 650 (500 cards) 300 (2 stamps) 1000(300 pieces) 150(20 pieces)

Cleaning equipment Uniforms Office Rent Office furniture

Rs. 40,000/Rs. 4500 Rs. 30,000 10,000 20,000

Total startup expenses

78100

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Pro forma Profit & Loss account

Year 1 400000 100000 500000 Year 2 560000 140000 600000

Revenue ( services ) Other revenue Total revenue

Expenses
Payroll Additional payroll Utilities Rent Marketing & promotion Other expenses* Operating Income Interest expense Taxes (15%) Income after taxes and interest Reinvestment Net profit 288000 20000 15000 72000 15000 10000 80000 0 12000 68000 17000 51000 288000 30000 20000 72000 10000 0 180000 0 27000 153000 50000 103000

Other revenue from selling the re-useable material from debris collected from construction site. Payroll; 6 employees working at 300 per day, 20 days approx a month, 8 months in a year Reinvestment; 25% of the net income will be re invested for expanding business.

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Business Plan 2011

Pro forma Balance sheet

Year 1 Year 2

Assets
Current assets Cash Inventories 25,000 20,000 34875 27625

Noncurrent assets
Total assets

2000 47000

3300 65800

Liabilities and owners equity

Current liabilities Account payable Loan 18000 12000 0 17000 47000 6000 9800 0 50000 65800

Owners equity
Re-investment Total liabilities &owners equity

We assume that there is an increase of 40% in the activity of business from year 1 to year 2.

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Pricing:
We are currently offering three packages that are designed to best meet the varying needs of the customers keeping in mind their budget restraints. Complete cleaning solutions including removal of the waste material and debris and cleaning of window and paint stains. This package will also include a complete check up of the plumbing and the final testing of the wiring of the house.

Golden package
cleaning: Rs. 7/sq. feet plumbing: Rs. 300/day electrician: Rs. 300/day

Silver package
cleaning: Rs. 8/sq. feet plumbing: Rs. 300/day or electrician: Rs. 300/day

Complete cleaning solutions including the removal of the waste material and debris and cleaning of window and paint stains. The customers can choose between either a plumbing check up or an electrical wiring check up. Complete cleaning solutions including the removal of waste material and debris and cleaning of window and paint stains.

Bronze package
cleaning: Rs. 9/sq. feet

We will be paying our employees a competitive hourly wage, quite a bit more than minimum wage. This is calculated to attract a much higher caliber employee that is not looking for temporary employment, but a stable job environment. This is compounded by the fact that in order to make our training cost effective for us, we need this person to be a part of the company for an extended period of time, not just a few months until a better job comes along. In addition to paying an above market wage, we will be offering extensive training. This personal development will be another attraction for the high caliber employee. The need for the higher
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class employee is necessitated because of the upper end clients that we serve. In order to exceed the customer's expectations of our services, we need to have the right employee that has been properly trained and feels a sense of empowerment on the job.

Conclusion:
SAJE cleaning solutions will be one of its kind cleaning business in Multan. People still dont have an idea about a proper cleaning service that exudes professionalism and will get them their moneys worth. We are still a long way from success but we believe that though dedicated services and evident professionalism, we will create awareness about ourselves and our work will speak for itself. SAJE cleaning solutions is designed keeping in mind the idea of reliving the customer from the hassle of another daunting task of cleaning up the house once they are done with the construction. We take all your problems and make them our own and what you get is a clean house ready for moving in. SAJE strives to excel in its services because we are a newbie and only through hard work, we can get recognition. Our business plan details all the important aspect of our business ranging from the segmentation, targeting, marketing plan and the relevant financial data. So if you have a newly constructed house that needs cleaning, look no further, because at SAJE cleaning solutions, we sure know how to clean up someone elses mess!!

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