Writing a Simple Cleaning Service Business Plan That Gets Results!
Starting a business can be overwhelming. There are so many variables to consider when you start a business. If you don’t have a plan, you may waste a great deal of time and money. Use these tips to write a cleaning service business plan.
Business plan tools
You’ll find variety of software tools to create your business plan. You can Google “business plan software” and find many examples. These software packages provide a template for your plan. The templates ensure that you cover each important component of your business plan.
Once you create your detailed business plan, you’ll write an Executive Summary. As the name implies, this is a 1-2 page summary of the most important points in your business plan. If you need to raise money, the Executive Summary is the first thing a potential investor or lender reads.
Assessing the market
You should start your business plan by assessing the number of people who buy the product or service you offer- and the price they are willing to pay.
Here’s an example: Assume that you manufacture and sell running shoes for women. You determine that 1,000,000 pairs of women’s running shoes are sold in the US each year. The average price per pair is $80. That means that the size of your market is $80,000,000.
Next, determine how much of that market you are can attract to your business. If the running shoe company believes that they can sell to 10% of the US market, they would eventually generate $8,000,000 in annual sales. Is that enough sales to justify starting the business? Can the running shoe firm operate profitably at that level of sales?
That’s the thought process for assessing the market.
Market assessment for your cleaning business
You can apply this process to your local cleaning business. While the information you collect will not be as precise, you’ll be able to get an idea of the size of the market. Consider these steps:
· Existing competitors: Take a look at the number of cleaning companies that serve your area. You can simply Google “residential cleaning companies” and your city name to get an idea. Once you find these competitors, go to their websites to find out what they charge. The more competitors you find, the larger the potential cleaning service market.
· Demographics: Let’s assume that your competitor research indicates that customers pay an average of $100 for a house cleaning. The typical client pays for cleaning every three weeks. They clean the house themselves between visits. How many people can afford the service? The partial answer is to find out the average income level of people in the area. Check out the Bureau of Labor Statistics for this type of information.
· Size of the market: Based on your research, you estimate that the market for cleaning services in your area is $4,000,000 annually. You’re trying to attract 5% of that market in year one, which would be $200,000 in sales. Is that level of sales large enough to justify starting your business? Can you be profitable at $200,000 in sales?
If your market assessment determines that you can generate sufficient sales, you can move on to the next step in your business plan.
Determine your ideal customer
Your ideal customer represents the characteristics of the clients who use your service the most often. You need to tailor your sales and marketing efforts to meet the needs of that ideal customer. This analysis considers age, gender, income level, occupation and other factors.
A business owner can use several types of resources to determine the ideal customer. If you’re worked in the industry, you already have an idea of the customers who use your service. Take a look at the people that your competitors target. What messages are they delivering on their website, or in their advertising?
Finally, you can survey clients or prospects. Send a short survey electronically. Make sure that you ask open-ended questions. These questions give the prospect a chance to write specific answers. That information is more meaningful than simply checking boxes.
Assume that your ideal customer is a woman between the age of 35 and 65 years old. She is married and has family. This customer earns an upper income wage, and does not have much free time. The client is willing to pay for cleaning, rather than invest their personal time on that task.
All of your marketing efforts can be focused on the ideal customer’s profile.
Once you identify that ideal customer, you can think about the marketing and sales tools you need. Here are some ideas:
· Website: If someone is referred to you, It’s very likely that the prospect will want to see a website. Fortunately, there are online publishing tools that let you build a website with no programming knowledge. WordPress software, for example, allows you to select from hundreds of themes and create a great-looking website.
· Search engine optimization (SEO): Other prospects may Google “residential home cleaning” for their city. You’ll need a strategy to increase your ranking in Google search results. One strategy is to post content that your audience can use to solve a problem. As more people find your site and read your content, you can move up in the search rankings.
Advertising: Many homeowners look for services in their local community paper. You can work with an ad expert to write the text and design the look of an ad.
How you are different: Your marketing message
Next, think about the message you want to deliver to clients. What do you want them to know about you? To succeed, you need to differentiate yourself from the competition.
Entrepreneur magazine provides some great ideas to differentiate your business from your competitors:
· Market yourself as an expert: When we need to solve a problem, many of us seek out an expert. One strategy is to market yourself as an expert. In this case, you’re the person who knows how to clean someone’s home safely and efficiently. You can post cleaning articles on your website, or write guest posts on other websites.
· Position your business as a movement: Tell your audience why you’re passionate about your business. Tell people that your real business is giving homeowners more leisure time. Your business is about move than simply cleaning homes. This strategy can help you make a better connection with your audience.
· Improve on an existing product: Your competitors have home cleaning business. Maybe you can add a service that your competitors don’t offer. For example, your firm might provide both carpet cleaning and home cleaning services. Your business offers more than the competition.
Writing an operations manual
Another critical component of your business plan is to create an operations manual. Every routine procedure that you perform can be documented in a procedures manual. Here are some typical routines you perform in a cleaning business:
· Estimates: You visit the client’s home and provide a written estimate. The estimate explains the work you will do and the cost.
· Staffing: You have a process to staff each cleaning job.
· Equipment: The business has a process to sign out equipment so it can be used on a cleaning job. When equipment is returned, it is signed in. This procedure helps prevent items from getting lost or stolen.
· Payroll: The firm collects payroll information from staff members. Workers post their time and report it to you. To run payroll based on the hours posted.
· Billing: Your business has a process to send invoices to clients and collect payments.
Include written procedures in your business plan. This document helps you think through all of the tasks you need to perform. You can use this knowledge to plan your hiring.
Budgeting and forecasting
The most important reason to use business plan software is your budgeted financials. Typically, a business plan will include at least 3 years of projected financials. If you need to raise funds from investors or a lender, they will want to see these projections.
Start with a budgeting profit and loss statement, also referred to as an income statement. Analyze one particular job, and the costs you incur to complete that work.
Say, for example, that your typical job is a $100 sale. You incur $85 in expenses and earn a $15 profit (15%). Identify all of the costs you incur in that $85 total. Next, consider how many jobs to intend to complete in a month. This is your starting point to create a profit and loss statement for the month.
Balance sheet and cash forecasting
After you create an income statement, move on to the balance sheet. This financial statement include three categories:
· Assets: Resources you use to make money in your business (inventory, for example)
· Liabilities: Bills and loans you must repay
· Equity: The value of your business. Equity is also stated as (assets – liabilities)
If you raise money by selling ownership in your business, you are selling equity. Bank loans are considered a liability.
Finally, you’ll have to consider how your will maintain a positive cash balance. You need to collect cash from customers and pay your vendors.
This may be the most challenging part of your business planning. Without sufficient cash, you can’t operate. After all, you need to make payroll every month. A business can operate at a profit and not be able to collect enough cash to operate next month. Think carefully about your cash flow and use software to forecast cash.
Planning can lead to success
If you put a great deal of thought and effort into your business plan, you’ll have a better chance at succeeding. That’s because you’ve thought about every aspect of your business. Invest the time necessary to develop a comprehensive business plan.