Sample Business Plan on Cleaning Company Business Plan
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EXECUTIVE SUMMARY
The Business Concept
Rainbow Residential Cleaning Services, LLC (Rainbow Residential Cleaning Services or the Company) a “hands on” professional cleaning company that specializes in Basic Cleaning, Deep Cleaning, and Client Preference Cleaning. The Company also provides laundry services and closet arrangements as well. The Company is located in Southfield, Michigan.
Rainbow Residential Cleaning Services provides excellent quality, reliability and value in its cleaning services. The Company is a fully bonded, licensed and insured professional cleaning company. It conducts full background checks on all of its staff and conducts rigorous training for all employees.
The Company unconditionally guarantees its work and will return to any client’s site to re-clean an area within 24 hours of notification. Rainbow Residential Cleaning Services is a member of several professional organizations including Ladies Who Launch, Michigan’s Women’s Marketplace, National Association of Career Women and the Southfield Area Chamber of Commerce.
The Company’s location is in a prime area. It appeals to the busy middle income household or the affluent. Rainbow Residential Cleaning Services will take advantage of the large number of homes and residences in the Tri-County Area surrounding Detroit, Michigan, to drive its growth.
Rainbow Residential Cleaning Services expects to gain a profitable market share within a very short period of time. Determinations have been made for the size of the market, amounts of budgeted advertising and promotional dollars and the competitive landscape.
Projections call for the Company to generate revenues of $90,000 in its next twelve months. Rainbow Residential Cleaning Services will achieve strong growth over the next several years, reaching $142,000 in revenues and more than $22,000 of net income by the fifth year.
The Opportunity
Cleaning Services Industry
Current commercial and residential cleaning services research by the Freedonia Group forecasts an increase of 5.3% per annum through 2011 totaling $62.8 billion. Specifically in the residential market, gains will be driven away from do-it-yourself cleaning.
Lack of time is a factor in many dual-income families. Often individuals that prefer a professionally maintained look in their homes contract residential cleaning services to perform these tasks. Another factor in this industry is demographics, as the population ages it is predicted that many older homeowners will be physically unable to maintain the cleaning of their residence as they had in the past. Safety and health concerns fuel this market as well, both in the residential and nonresidential segments. 1
Americans are typically on the go so shortage of time is a continuing concern as individuals find less hours in a day to clean their homes, but it should be noted that many people just simply don’t like the time-consuming, mundane task of dusting, scrubbing and scouring. Consequently, since the 1970s maid and home cleaning services have flourished.
According to the U. S. Department of Commerce, “Eighty percent of dual-income households will use a residential cleaning service this year. With demand growing, residential housecleaning has become one of the fastest growing industries in the country. It accounts for almost $20 billion in annual sales, with a projected growth rate of 20 percent.”
The number of households in the U.S. that use residential cleaning services has increased significantly over the past few decades, according to a recent American Demographics reports. In 2000 analysts predicted nearly 10 million Americans would turn to outside help for house cleaning chores; by 2006 this number is expected to increase to 10,740,000.
Typical clients of residential and commercial cleaning services are often:
Ø High income single parent families
Ø Dual-income households
Ø Affluent empty nesters and retirees
Ø Professional single adults
Ø Between ages 35 and 64
Ø Household income above $75,000
A member survey conducted by the Association of Residential Cleaning Services International (ARCSI) in the fall of 2003 revealed: 2
Home versus commercially based: The split was dead even, with 50% based from home and the other half located in commercial office space.
Annual sales of residential house cleaning companies: The overall average sales of survey participants totaled $387,192. Average annual revenues for home-based services totaled $106,250 compared with an average of $846,428 for those working from commercial office space.
Franchise versus independently-owned cleaning companies: 85% were independently owned compared with 15% franchise operated, although 41% had considered purchasing a franchise.
Staffing of house cleaning services: The average number of employees per cleaning service totaled 14 workers; 72% used teams versus 17% who sent out individual cleaners; 11% used a combination of teams and individual house cleaners.
Team composition: Of those house cleaning services working with teams, 35% used 2-person teams, 24% worked with 3 person teams and 41% alternated teams ranging from 2 to 4 people.
Joan Johnson, staff writer for the Colorado Springs Business Journal said, “Mop the floors, take out the trash, and scrub the toilet. Cleaning up after yourself and your loved ones is time consuming, and that's perhaps why more and more people are choosing to pay someone else to do the dirty work.”
Johnson added, “The U.S. Bureau of Labor Statistics says the cleaning services industry is expected to grow 5.5 percent annually through 2009. It is a $46 billon dollar a year business, with maid services making up 66 percent, or $30 billion.”
Director of marketing for Merry Maids, Sarah Smock, recently made the comment that the number one reason cleaning services are utilized is, "People want more time to do other things," she said. "It's not always fun things either, but they're looking to take house cleaning off their list of duties."
Smock said other factors that also explain the increased growth in maid service include:
Ø The number of two-income households
Ø Growing sizes of homes
Ø Increased children participation in extracurricular activities
One professional real estate broker said, “It makes a big difference. Some people just have no idea how to clean, so their house just doesn't match others on the market."