Entrepreneurship and Small Businesses

This report presents the business plan for the residential cleaning business, Clean & Tidy Cleaning Company, in New Zealand. It focuses on marketing activities, target audience, market analysis, and recommendations to overcome risks.

Running head: ENTREPRENEURSHIP AND SMALL BUSINESSES
Entrepreneurship and Small Businesses
7/17/2019

ENTREPRENEURSHIP AND SMALL BUSINESSES 1
Executive Summary
This report intends to present the business plan for the residential cleaning business
that is "Clean & Tidy Cleaning" Company, which has been planned to establish in the New
Zealand for reducing the diseases from the environment and encouraging healthy living
among society. The report has majorly emphasized on the marketing activities that will be
adopted by the company because these activities will support the company in placing the
image of the business in the eyes of the target audience. The target audience of the company
are residential and commercial areas. In addition to this, the business will not just be operated
through an offline medium; it will also have an online business operation platform due to the
increasing trend of e-commerce. However, the market analysis highlights that the cleaning
industry could raise some of the challenges for the business such as damage to the property of
the customer, damage to the company’s equipment, employee occupational injuries, chemical
exposure, etc. To overcome these risks, the report is recommended for the company to
provide proper training to staff, using caution signs, etc.

ENTREPRENEURSHIP AND SMALL BUSINESSES 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Business Description and Background...................................................................................3
Marketing...............................................................................................................................4
Segmentation, Targeting, and Positioning.........................................................................4
Marketing Mix...................................................................................................................7
Operations and Production.....................................................................................................9
Value Chain Analysis.........................................................................................................9
Financial Analysis and Projections......................................................................................11
Human Resource Issues.......................................................................................................14
Critical Risks........................................................................................................................15
Conclusion and Recommendation............................................................................................15
References................................................................................................................................17

ENTREPRENEURSHIP AND SMALL BUSINESSES 3
Introduction
A business plan is a document that is planned for setting out the future objectives for
the business and strategies for attaining them. From the viewpoint of an entrepreneur a
properly framed business plan not only helps in focusing on any specific steps that are
important to succeed but it also assists in achieving the long-term and short-term goals
(Mebmer, 2016). While the business plan is said to be significant in the entrepreneurship but
not all the entrepreneurs require it. There are several businesses experts who have accepted
that having an effective business idea is not sufficient. In fact a great business idea could fail
if it is not formulated and executed with a proper strategic plan (Schramm, 2019). This report
intends to present the business plan of the business idea of running the efficient residential
services of cleaning. The report is well-prepared with the detailed analysis and explanation of
the key aspects of the business plan like marketing and financial analysis and projections. In
addition to this, the report is also highlighting the operations, production and issues of human
resources that the business can experience in the cleaning industry. In the end, the report has
presented the critical risks and recommendation to overcome those risks.
Business Description and Background
The business idea is of providing the cleaning services at the residential and
commercial area. The name of the business is “Clean & Tidy Cleaning" which will be
operated in New Zealand to encourage people to live a healthy and clean living. The business
idea is to provide a cleaning service at residential as well as commercial places. The type of
operations that will be provided through this business is cleaning of home stands as well as
office interior spaces, windows, along with carpets. In addition to the individual cleaning
services for home, the business also aims to provide exclusive services that will support the
business in differentiating itself from different rivals that are present in the industry. The idea

ENTREPRENEURSHIP AND SMALL BUSINESSES 4
of the business of starting the business of efficient residential services of cleaning could be
comparatively accessible because these types of businesses generally follow low economic
commitments and limited experience and education requirements.
The business idea has been introduced by Mr. James, who has worked in a
manufacturing company of home cleaning products. The business idea of cleaning services
came when James conducted research and identified that there are several households and
commercial areas which are unaware as well as unconscious about the cleaning. Hence, he
decided to introduce a business that could encourage people to maintain their healthy and
clean living.
Marketing
Marketing can be determined as the set of activities that are followed by the business
to relate profitability to the market (Pride & Ferrell, 2014). The “Clean & Tidy Cleaning”
business will adopt different marketing concepts to promote the business by increasing
awareness of the services among the target audience. Some of the marketing tactics and
strategies that will be adopted by the business are discussed below:
Segmentation, Targeting, and Positioning
Segmentation
Market segmentation is one of the activities that are adopted by the businesses under
which they divide the broader market into different sub-groups of patrons. The business
divides the market depending on the common characteristics like common interest,
demographic profiles, common needs, and similar lifestyles (Weinstein, 2013). The motive of
segmenting the market is to detect the high yield segments that are most profitable and offer
growth potential to the business. Four types of market segmentation could be adopted by the
business are:

ENTREPRENEURSHIP AND SMALL BUSINESSES 5
Demographic Segmentation – This is the most common types of segmentation that
is utilized by almost every business. Under this head to target the market, the company will
consider the variables such as income and family size.
Geographic Segmentation – Under this kind of segmentation the business divides
the market based on the geography of people (Dolnicar, Grün & Leisch, 2018). In the initial
period of the business, the company will launch its operations in the market of New Zealand.
Psychographic Segmentation – Under this type of segmentation, the business
divides its market depending on the lifestyle of people, views, activities, and interest.
Behavioural Segmentation – This kind of segmentation is used by companies to
dividing the market depending on their decision-making pattern and behaviour
(Chandrasekar, 2010).
Targeting
Targeting is all about breaking the potential market into different sections and then
aiming the marketing strategies on some of the main sections encompassed of consumers
whose demand closely matches with the services provided by the company. It works for the
business in increasing sales (Klobnak, 2011). The target market of “Clean & Tidy Cleaning”
business is residential areas and corporate buildings that prefer living at clean and tidy places
to avoid the chances of any major disease or side effects. Targeting the market will help the
company in focusing its marketing efforts to reach large number of audience to serve.
Positioning
Positioning is generally a place that is occupied by a brand in the mind of the patrons
and how it is differentiated from the rivals’ offering. For placing the product in the market,
business concentrate on the distinctive features of their service which could help in creating

ENTREPRENEURSHIP AND SMALL BUSINESSES 6
an appropriate place with the support of the marketing mix (Riezebos & Grinten, 2012).
"Clean & Tidy Cleaning" business will be positioned in the market as the most reasonable
and assessable cleaning service for residential area and corporate buildings, which could be
availed by simply a phone call or booking over the business website. “Clean & Tidy
Cleaning” Company could experience rivalry from some of the existing businesses of the
industry like the Cleaning Company and Property Cleaning Services. These players could
also impact the customer base as well as revenue of the Clean & Tidy Cleaning Company in
the New Zealand market; hence to avoid this company has to highlight the distinguishing
features of its services to the target market through perceptual mapping.
Low
Price
High
Quality
High
Price
Low
Quality
The
Cleaning
Company
Property
Cleaning
Service
Clean &
Tidy
Cleaning

ENTREPRENEURSHIP AND SMALL BUSINESSES 7
Source [(By Author, 2019)]
Marketing Mix
Marketing mix is the set of marketing activities or marketing tactics adopted by the
business to attain its marketing objective. Thus, the market mix is comprised of four broad
marketing decisions that are the product, price, place, and promotion (Richter, 2012). These
four aspects of the marketing mix highlight in details the complete planning and thinking of
the business to establish the product in the industry. The marketing mix planning of Clean &
Tidy Cleaning Company is presented below:
Product
Product is the item or service offered by a company for encountering the demand of
the target audience and earns a profit. The service that is offered by Clean & Tidy Cleaning
Company is residential and corporate building cleaning at affluent as well as middle-class
regions of New Zealand market. The motive of the business is to encourage hygienic and
healthy living to the people of New Zealand and decrease the chances of diseases and other
health issues.
Price
Price is said to be the amount that is charged by the company for exchange of the
service offered to the target audience (Schindler, 2011). Clean & Tidy Cleaning Company
will charge reasonable charges for its cleaning services from the target market such that
potential customer gets attracted towards availing the service. The strategy of pricing that can
be applied adopted by the company to set the prices of the service is Economy Pricing. It is
one of the strategies that are used by the business to offer products to the target market at
lower pricing. To do so, the business will put efforts to minimize its production as well as

ENTREPRENEURSHIP AND SMALL BUSINESSES 8
marketing expenses. This strategy has been adopted by the business to majorly targeting cost-
conscious customers.
Place
Point of sale where the business catches the eyes of the customers is considered as the
place in the marketing mix. Clean & Tidy Cleaning Company will allow customers to book
the services offline as well as an online platform. The company has intended towards
establishing its head office in the New Zealand market to encourage customers to avail the
cleaning service through face to face interaction. Along with this, the company will create its
business website to allow clients to book their cleaning service through online medium.
Promotion
Promotion is the kind of marketing communication utilized to aware or encourages
the target market to purchase the product or service by highlighting its benefits and features.
Clean & Tidy Cleaning business will promote the services in the New Zealand market by
adopting different elements of the promotional mix. Promotional mix is the blend of
promotional variables chosen by the marketers for guiding the company to meet its objectives
(Kaniz, 2014). Some of the elements or variables of promotional mix that will be selected by
Clean & Tidy Cleaning business for the promotion of the business are an advertisement,
direct marketing, and digital marketing.
Advertising – The advertising is one of the promotional modes that are generally
paid, with no personal message. Under this promotional variable, the businesses will make
use of mass media challenges like newspaper, magazines, radio, or television for the
promotion of the residential and commercial area cleaning. Besides this, the company could
also use brochures, billboards, direct mail, or billboards.

ENTREPRENEURSHIP AND SMALL BUSINESSES 9
Direct Marketing – The direct marketing variable of the promotional mix will be
used by the businesses to target particular significant potential users by using telemarketing,
emails, text messages, and customized letters (Rapp, 2009).
Digital Marketing – It is a kind of marketing that is used to promote the service or
product in the market by using digital technologies over the internet, display advertising,
mobile phones, etc. Under this, Clean & Tidy Cleaning business will promote the business by
designing its website and persuading customers to purchase the product.
Operations and Production
Value Chain Analysis
Value Chain Analysis is a strategic tool that is utilized to analyse the internal
company’s activities. The objective of the value chain analysis is to classify the most valued
business activities and one that can be enhanced to attain competitive advantage (Schmitz,
2005). These activities are comprised of the following elements:
Primary Activities
Inbound Logistics
Inbound logistics is comprised of the procedures that are comprised of receiving,
internal distribution, and storing of the stock or raw material of the service or product. Under
inbound logistics, the Clean & Tidy Cleaning business will give priority to the sourcing of
raw materials, cleaning products, and equipment.
Production/Operation
This element of value chain analysis is comprised of all the activities that are related
to producing finished product or service for the company. The main concern of the company

ENTREPRENEURSHIP AND SMALL BUSINESSES 10
is to offer cleaning services at residential and commercial areas with the use of high-quality
equipment and material, to deliver satisfactory service.
Outbound logistics
The outbound logistics is comprised of activities that are attached to delivering the
services and products to the consumer (Scheer, 2013). Under this, the cleaning business will
put efforts for maintaining good relationships with the key suppliers, marketing executives,
distributors, and customers for effective operations.
Marketing and sales
Marketing and sales are the processes that are related to place the service or product
in the market and managing strong customer relationships. Under this, the cleaning business
will make use of diverse promotional mix tools for the marketing such as advertisement,
direct marketing, and digital marketing.
Services
Service is comprised of all the activities that help in maintain the value of the service
to the consumers. Under this, Clean & Tidy Cleaning Business ensures customer satisfaction
after delivering the best service through feedback and resolving customer problems.
Support Activities
Firm infrastructure
The infrastructure of the firm is comprised of establishing an organizational structure
and effective infrastructure of the business. The business has planned to establish head office
of the “Clean & Tidy Cleaning" business in New Zealand to encourage people to live a
hygienic and healthy living. In addition to this, the company will design a business website

ENTREPRENEURSHIP AND SMALL BUSINESSES 11
through which it will provide detailed information about its services to the potential
customer.
Human resource management
Under human resource management, the development of the personnel in the business
is the main motive. Some of the activities under this head are recruitment, training, and
coaching the workforce (Kumar, 2010). The business will hire personnel who are skilled with
detailed knowledge of using cleaning equipment and products such that any type of damage
could be avoided.
Procurement
This is one of the key activities of the business that is related to the effective
procurement of the raw material from the business partners or suppliers of the business that
could result in reduced business cost (Russill, 2010). The Company has planned to procure
raw material and machinery from the local suppliers because they could provide quick
service at cheaper rates.
Technology
This part of the analysis is linked with the development of the service and product of
the business externally and internally. The technologies that will be used by “Clean & Tidy
Cleaning” business are carpet cleaning machine, paving a driveway, ceiling cleaning
equipment, tile and grout cleaning machine, etc.
Financial Analysis and Projections
Assumptions Amount
Start-up fund 34500
Start-up assets 62500

ENTREPRENEURSHIP AND SMALL BUSINESSES 12
Total funding required 97000
Assets
Non-cash Assets 1800
Cash in hand 25700
Additional cash raised
Total Assets 27500
Liabilities and capital
Current Borrowing 17000
Long term liabilities 0
Accounts payable 0
Other current liabilities 0
Total Liabilities 17000
Capital
Planned investment
Partner A 25000
Partner B 15000
Total 40000
Total Planned Investment
Total capital 40000
Total Capital and Liabilities 57000
Total funding 97000
Profit and Loss Account
for the year ending 31st March 2019
Particulars
Year 1
Sales
Residential $ 1,10,480.00
Corporate
$
79,490.00
Direct cost of sales
$
14,650.00
Gross Margin $ 1,75,320.00

ENTREPRENEURSHIP AND SMALL BUSINESSES 13
Expenses
Payroll (12)
$
37,540.00
Sales and marketing
expenses
$
10,520.00
Depreciation
$
3,560.00
Utilities
$
9,963.60
Insurance
$
4,800.00
Rent
$
14,600.00
Employee benefits
$
15,485.00
Payroll Taxes
$
26,300.00
Training
$
13,450.00
License and permits
$
4,700.00
Total $ 1,40,918.60
EBIT
$
34,401.40
Interest Expense
$
10,500.00
Profit before tax
$
23,901.40
Tax
$
7,170.42
Net profit
$
16,730.98
Balance sheet
as at 31st March 2019
Assets Year 1
Current Assets
Cash $ 25,700.00
Accounts Receivable $ 46,230.00

ENTREPRENEURSHIP AND SMALL BUSINESSES 14
Other Current $ 7,398.98
Total current $ 79,328.98
Long term Assets
Property plant, equipment $ 35,600.00
Accumulated depreciation $ 3,560.00
Total non-current assets $ 32,040.00
Total Assets $ 1,11,368.98
Liabilities and capital
Current liabilities
Accounts payable $ 17,700.00
Current Borrowings $ 17,000.00
Other current liabilities $ 3,320.00
Total current liabilities $ 38,020.00
Long term borrowings $ 16,618.00
Total non-current liabilities $ 16,618.00
Total liabilities $ 54,638.00
Paid-up capital $ 40,000.00
Retained earnings $ 16,730.98
Total Capital $ 56,730.98
Total liabilities and equity $ 1,11,368.98
Projected Cashflow
Year 1
Cash received
Cash sales $ 56,991.00
Cash received from receivables $ 9,246.00
Cash flow from operating activities $ 66,237.00
Cash Spending $ (73,337.00)
Additional Residential Equipment $ (35,600.00)
Cash from investing activities $ (1,08,937.00)
Proceeds from borrowings
Borrowings $ 17,000.00
Cash from financial activities $ 17,000.00
Net cash flow from activities $ (25,700.00)

ENTREPRENEURSHIP AND SMALL BUSINESSES 15
Cash at the beginning 0
Cash at the ending $ 25,700.00
Human Resource Issues
The term ‘human resource' is used to define the people who are employed by the
company to execute the operations and the department which is accountable for managing the
employees of the company. It is said to be one of the main parts of the business as they are
considered as the face of the company (Hendry, 2012). However, businesses deal with several
human resources issues which are required to be resolved for avoiding any severe damage to
the business. Some of the human resource issues are unavailability of skilled workforce, lack
of motivation, employee turnover, etc. There are some of the human resources issues that can
be faced by the "Clean & Tidy Cleaning" business are:
Unavailability of skilled workforce in the cleaning business results in enforcing
business to hire unskilled labor. The cleaning industry is one of the industries which has yet
been neglected by society due to lack of knowledge and awareness. However, this impacts
the businesses that operate in the industry and force them to hire unskilled labor and invest in
providing them training.
Business experience challenges in training the unskilled labor which results in
delayed business operations. Providing training to the unskilled labor leads to increasing
operational cost of the business.
Critical Risks
Critical risk is determined as the event that can result in severe damage to the business,
customer, or employee. Some of the critical risk that could be experienced by the "Clean &
Tidy Cleaning" business is:

ENTREPRENEURSHIP AND SMALL BUSINESSES 16
 Damage to the property of the customer
 Damage to the company’s equipment
 Employee occupational injuries (Insure On, 2014)
 Chemical Exposure, etc.
Conclusion and Recommendation
The above report has presented the detailed business plan of a residential and
commercial cleaning business that is "Clean & Tidy Cleaning" Company. The business aims
to encourage people in New Zealand to live a healthy life by availing the cleaning service of
the business. The report has elaborated the marketing strategies that the company will use for
the promotion of the business such that people in the New Zealand market could get to know
about the negative impact of dirty and unhealthy living. In the conclusion, it could be said
that the Clean & Tidy Cleaning Company can effectively survive in the New Zealand market
if it is successfully able to overcome human resource issues and critical risk that are
discussed above in the report.
The critical risk that the Clean & Tidy Cleaning Company can experience in the
market can be overcome by adopting some of the strategies like - Using Caution signs,
Equipment of residential and commercial area cleaning must be kept at a fireproof place, and
properly training the employees of the business.

ENTREPRENEURSHIP AND SMALL BUSINESSES 17
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ENTREPRENEURSHIP AND SMALL BUSINESSES 18
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