LUBM302 New Venture Creation Assessment

Learn how to create a new venture with LUBM302 New Venture Creation Assessment. This guide covers business description, opportunity analysis, marketing strategy, management and operations, financial analysis and projections, and more. The business is named Clean4U and provides cleaning services to residential households. The company aims to provide trustworthy and efficient services at affordable rates. The target market includes families with single or double income who require professional cleaning services. The industry analysis is done using Porter's Five Forces Model and the environmental analysis is done using the PESTEL framework. The marketing strategy includes competitor-based pricing and promotion through flyers and social media. The management team consists of high-skilled professionals with experience in accounting, sales, marketing, operations, and business strategy.

LUBM302 New Venture
Creation Assessment

Table of Contents
Executive Summary.........................................................................................................................4
Business Name, Mission, Vision and Objectives............................................................................4
Vision...........................................................................................................................................4
Mission........................................................................................................................................4
Objectives....................................................................................................................................4
Business Description.......................................................................................................................5
Product(s)/ Service(s) offered by the business............................................................................5
Unique Benefits/value proposition..............................................................................................5
Opportunity Analysis and Research................................................................................................5
Explanation and Justification of the chosen market....................................................................5
Industry Analysis.........................................................................................................................6
Environmental Analysis...............................................................................................................6
Competitive Analysis...................................................................................................................7
Marketing Strategy and Plan...........................................................................................................8
Products/Services.........................................................................................................................8
Pricing..........................................................................................................................................8
Promotion....................................................................................................................................8
Place.............................................................................................................................................9
6.0 Management and Operations.....................................................................................................9
6.1 Management Team and Ownership Details...........................................................................9
6.2 Roles of Team Members, skills, and Qualifications..............................................................9
6.3 Training Needs Analysis......................................................................................................10
6.4 Organizational Chart............................................................................................................11
7.0 Financial Analysis and Projections..........................................................................................11
7.1 Sources and Uses of Capital................................................................................................11
7.2 Cash Flow Projections.........................................................................................................11
7.3 Balance Sheet Projections....................................................................................................12
7.4 Income Statement Projections.............................................................................................13
7.5 Breakeven Analysis.............................................................................................................14

7.6 Exit Plan...............................................................................................................................14
7.7 Milestones............................................................................................................................14
8.0 Conclusion...............................................................................................................................15
REFERENCES................................................................................................................................1

Executive Summary
Clean4U is a company that will provide cleaning services to the individual residential
households. The main reason behind such commencement of such a business is to respond to the
requirements of families having single income and families who are affluent having double
income which includes carrying out of cleaning services by the individuals who are professional,
trustworthy and very efficient. Therefore, the fees charged by this company will be worth the
quality of services provided to the clients. Recently, businesses in this industry is showing a
tremendous growth as the families are bending more and more towards the working culture and
thus, requires assistance from the professionals to get the other chores of the households being
done and that too efficiently and professionally. Referring to the competition facts say that
cleaning industry lists among the top 10 industries in the UK and has shown growth rate which is
almost twice of the overall growth rate of the economy.
Business Name, Mission, Vision and Objectives
The company which will be providing cleaning services to the individual residential
households is named Clean4U which clearly explains the services that it will be providing.
Vision
To gain recognition among the client, employees and most importantly, in the industry as
the most trustworthy and the leading cleaning service providers at affordable rates.
Mission
To create environment of peace, cleanliness and hygiene at the place of the client. To the
provide the cleaning services of best quality and thus, exceeding the benchmark of what the
customer is expecting. Also, to emphasize on continuous improvements of the services by
focussing on the quality and productivity. The achievement of these missions will involve
various steps like adhering to the management functions of the company, planning of goals,
strategies and objectives keeping in consideration the flexible approach. Organisation of the
activities effectively and then leading of employees through training, accepting suggestions and
resolution of the conflicts.
Objectives
Following will be the objectives of the company:
 To make the business profitable within first 2 months of the commencement of operations.

 To reduce the fees for the services by at least 15% as compared to other competitors by the
end of the first year of operations.
 To be able to serve at least 2000 residential households by the end of the first year of
operations.
Business Description
Product(s)/ Service(s) offered by the business
The company will be providing cleaning services to the residential households. The fees
will be charged on the basis of the work involved at a particular site i.e., overall cleaning,
outdoor cleaning, terrace cleaning, etc. Also, in case of households requiring continued services
the company is having monthly, quarterly and yearly subscription packages which will naturally
be more cost effective when compared to one time cleaning tasks (Bowen, 2018). Services like
mopping, vacuuming, surface wiping, carpet cleaning, dusting, window cleaning, laundry and
floor polishing are rendered which are available in both cleaning packages as well as one time
cleaning job.
Unique Benefits/value proposition
Only the best quality and least harmful cleaning tools and goods likes soaps, chemicals
and detergents will be used along with standardized and certified cleaning machinery &
equipment for utmost efficiency and safety (Jiménez Barbosa and et.al., 2019). All these tools,
goods and machinery will go through regular technical tests to ensure that they are working
properly and are not dangerous to the place and people around their working. It is specifically
ensured that the person working at different sites work with honesty and integrity to ensure
safety of personal property of the client at their premises.
Opportunity Analysis and Research
Explanation and Justification of the chosen market
The major market that is targeted here is residential households and families belonging to
2 socio/economic group. First one includes the families where only single person is working and
the other is not but has chosen to get the work done by professional helpers (Ceballos and et.al.,
2021). Second one includes families and households where all the members are working and are
work for long hours thus, have no time to manage the cleaning and laundry work. Thus, trust is
the most essential element in the operations of Clean4U. This way the customers will be willing
to allow the entry of the helpers in the empty houses without the risk of any theft and damage.

This is a serious issue on which the foundation of this business is dependent and thus it is taken
very seriously.
Industry Analysis
For the analysis of the industry, Porter’s Five Forces Model can be utilized which is as follows:
THREAT OF NEW ENTRANTS
Entrance in this industry will be requiring significant capital and investment in the resources.
If certain challenges are imposed on the new entrants the company will be facing low level of
threats.
THREAT OF SUBSTITUTE SERVICES
Being a part of growing industry, availability of substitute providers of the service especially
at much cheaper rates is high thus resulting in the increased competitiveness of the
environment.
RIVALRY AMONG EXISTING FIRMS
Although there are limited number of players in the industry now but it is growing at a very
high rate thus such rivalry is bound to happen in the industry.
BARGAINING POWER OF SUPPLIERS
Since the requirement of cleaning materials and tools is very consistent and high therefore,
suppliers have strong power of bargaining in this industry. Although the suppliers are more but
the power is still significant.
BARGAINING POWER OF BUYERS
The bargaining power of the buyers which is high in this industry can be tackled by enhancing
and diversification of the customer base.
Environmental Analysis
The environmental analysis will involve the PESTEL framework which is as follows:
POLITICAL ECONOMIC
 Regulations on the consumer goods
sector.
 Legal framework for enforcing the
contracts.
 Intervention of the government in the
market of consumer goods.
 Level of skills possessed by the
workforce in the cleaning industry.

 Tariffs related to consumer goods.
 Legislation regarding wages i.e.,
minimum wages and overtime.
 Rate of economic growth.
SOCIAL TECHNOLOGICAL
 Demographics of the population.
 Class structure and hierarchy of the
society.
 Culture of the relevant economy.
 Technological obsolescence of the tools
and equipment used.
 Cost structure of such tools and equipment
which will impact the fees to be charged.
ENVIRONMENTAL LEGAL
 Laws relating to the environment
pollution.
 Waste management of these consumer
goods.
 Utilization of the ecological products.
 Anti – trust laws in the relevant industry.
 Consumer protection laws.
 Employment laws.
 Health and safety laws.
Competitive Analysis
Such an analysis of competitiveness will involve SWOT analysis which is as follows:
STRENGTHS WEAKNESSES
 Management motivation is the topmost
priority by satisfying, recognizing and
rewarding the staff.
 Management commitment to address the
customer’s needs.
 Spending power of the consumers have
increased.
 Founder has in-depth experience in this
industry.
 Proper and appropriate marketing
techniques need to be implemented for
targeting the known demographics.
 Sustained growth requires accessing the
regular flow of capital.
 Pricing set needs to be competitive.
OPPORTUNITIES THREATS
 Families and households becoming more
and more interested in working (Cleaning
Company SWOT Analysis for Business
 Initial few months of operations may be
taken for settling and thus, there are
chances of losses.

Plan, 2018).
 Increase in the disposable income of the
families due to increased working.
 Being in the growth stage, industry shows
new revenue opportunities.
 Company will require communication
with customers who want to contract with
the small businesses.
 Inability to find proper source of finance
for this start up.
Marketing Strategy and Plan
Products/Services
The range of services offered here will include mopping, vacuuming, surface wiping,
carpet cleaning, dusting, window cleaning, laundry, furniture cleaning, furniture steaming, lawn
cleaning and floor polishing. These services will be provided both as per the package system and
individually to those who wants to utilize these services once in a while or on a regular basis
respectively (Fuentes and et.al., 2022). Further explained the customer will be provided with the
materials, tools and equipment by the service provider itself or if he wants, he can provide his
own materials, tools and equipment of cleaning to the helper who will perform the task of
cleaning and then fees will be charged accordingly. Also, the organizing work can also be
provided for the customer if demanded specifically by him.
Pricing
This is the most crucial part of any business in which the business will decide its pricing
strategies. Now deciding pricing for a product is way different from the pricing of a services
(Padmanabhan and John, 2020). Therefore, there are 3 strategies for such pricing i.e., cost – plus
pricing in which a percentage of mark-up is added in the cost price, competitor – based pricing in
which pricing is decided based on the priced set by other rivals in the same area and value –
based pricing in which pricing is done based on the worth of the service from the customer’s
point of view. For this business, competitor – based pricing is most appropriate as it will lead to
charging of prices which will neither be too high nor be too low. But it shall be noted that this
strategy will be needing frequent modifications to gain the competitive advantage over other
rivals and be on the top in the industry and the relevant market.
Promotion
This will include communicating with the target consumers on why they need the
particular service and why the prices set are appropriate and justifies such services. It will

involve tasks of advertising, relations with the public and media strategy for introduction of the
service (Teasdale and Kademi, 2018). Thus, it will involve marketing strategies for promotion of
the services. Distribution of flyers is one of the traditional methods as it is most probable that the
people who need such cleaning services will come across such flyers and then contact the
company. These flyers can be stuck anywhere like in the local supermarkets, community centres,
etc. Someone can be paid to deliver these flyers door to door or even put in the mailboxes of the
people (Lin and et.al., 2022). Social media which is the most influential medium of promotion
through platforms like Instagram, LinkedIn, Facebook, Twitter, etc. It is necessary to keep the
messages concise and direct to attract the customers.
Place
Being a service, place here means the place from where these services will be managed
and supervised (Aspøy, 2020). There can be a central office where all the back office team will
be working to manage the work and the helpers who will be working for the company by going
to the client’s premises. Also, a service helpline needs to be set up dedicated wholly to the
grievances and queries of the customers.
6.0 Management and Operations
6.1 Management Team and Ownership Details
The management team of Clean4U is a group of individuals that are hired by the owner
of the company. These are high skill professionals entitled to perform key responsibilities of the
business. Highest positions in the management of Clean4U is having the management team
members. These group members specialize in some or the other key areas like accounting, sales,
marketing, operations and business strategy (LEI and GUO, 2018). The business is owned a sole
proprietor. The owner of the company appoints members of the management team with purpose
of delegating the authorities keeping in mind the vision of expanding the business gradually.
Executive members of the management of Clean4U consists of a chief executive officer, chief
financial officer, chief marketing officer and chief operations officer.
6.2 Roles of Team Members, skills, and Qualifications
Management Team has the role of increasing the productivity of the company by dividing
the overall managing responsibilities of the company. They possess certain skills and knowledge
helping in the success of the company. The owner of the company has previous five years of
experience in the cleaning business. The owner had a partnership business in the same industry

but he was not satisfied with the operations of that business and decided to start a separate
business on his own (Beltrán-Martín and Bou-Llusar, 2018). Owner hired certain professionals
and staff members for the working of the company smoothly and effectively. After the CEO the
company has a chief for managing all the financial and accounting related aspect of the
company. CFO of the company have excellent accounting and finance skills required for
preparing the budgets and strategies for the financial aspect of the business. The marketing
strategies of the company are looked after by the chief marketing officer. With the competence
of CMO company seeks to effectively target the audience in the market (Lacerenza and et.al.,
2018). The main role of the CMO is create product differentiation. For handling the complex
operations company’s owner has appointed a chief operations officer. The skills are used in
identification of the data that is to be used for analysing. Data analysis results helps in smooth
functioning of the company by easier implementation of change in areas of need.
6.3 Training Needs Analysis
Training need analysis is used by companies in identifying the areas where training and
development are required by the employees. Training and development programs are arranged
on the basis of such need analysis for building the competency levels of the employees. These
make employees capable of making the company profitable in the changing environment of
business. Knowledge, skills and abilities are the three types of training need analysis (Burke and
Cocoman, 2020). Among the staff members hired by the company there are various fresher too.
So the company’s management will take a training session to enhance the knowledge of such
individuals regarding the company and its expectations from them. Having clarity about the work
that is expected by company among the employees is highly crucial for efficient and effective
output by the company. Through this type of training it is assured that employees are capable of
working within the industry.
The other type of training that is at the core focus of Clean4U is skills. Both the hard and
soft skills of the employees are developed. Experienced employees train the new employees for
this purpose (Purnell, 2020). Technological skills are also built in this manner at the company.
Abilities of staff members are enriched by gradually increasing the level of responsibilities and
abilities given to them. Which type of employees fit into what training criteria is analysed
interviews and examining their work.

6.4 Organizational Chart
7.0 Financial Analysis and Projections
7.1 Sources and Uses of Capital
The three main sources of capital are retained earnings, equity and debt capital. Clean4U
will retain its earnings starting from the second year of the business for growth and development
of the business (Bostian and et.al., 2020). Equity capital is the funds of its sole owner that is
invested in for the establishment. Loans will be taken from the bank for the purpose of fulfilling
the rest of the fund requirements by the company.
7.2 Cash Flow Projections
Projected Cash Flow Statement
2023 2024 2025
Cash Flow From Operations
Net Profit 362837.5 390920.5 405721.9
Plus: Depreciation & Amortization 250 225 175
Change in Accounts Receivable 0 0 0
Change In Inventory 0 0 0
Change in Accounts Payable 2500 1000 1500
Change in Income Tax Payable 3662.5 -798 93.435
Change in Sales Tax Payable 20000 500 717.5
Change in Prepaid Revenue 0 0 0
Net Cash Flow From Operations 336425 389993.5 403235.9
Investing Activities
Net flow from investing activities 0 0 0
Financing Activities
CEO
CFO
Accounting and
Finance Manager
Staff Members
CMO
Marketing
Manager
Staff Members
COO
Operational
Manager
Staff Members

Investment Received 24000
Change in Short - Term Debt 0 0 0
Change in Long - Term Debt 0 0 0
Net Cash From Financing 24000
Cash at Beginning of Period 0 30000 28000
Net Change in Cash 30000 -2000 12000
Cash at End of Period 30000 28000 40000
Projected cash flow statement is a very effective tool of projecting the cash flows of the
entity whether it is commencing its operations or even is already existing. It will show how much
cash is going to go out and come in the entity therefore, a positive cash flow is a good indicator
that shows the efficient working of the entity as shown in the above projected cash flow in which
all the balances of cash at the end of the period are positive which are due to net profits earned
by the business each year.
7.3 Balance Sheet Projections
Projected Balance Sheet
2023 2024 2025
Cash 30000 28000 40000
Accounts Receivable 200 200 200
Inventory - - -
Other Current Assets
Total Current Assets 30200 28200 40200
Long-term Assets
Equipment 2000 2000 2000
Cleaning Equipment 4750 4525 4350
Other Long Term Assets 390500 423360 433847.3
Total Long Term Assets 397250 429885 440197.3
Total Assets 427450 458085 480397.3
Accounts Payable 2500 3500 5000
Income Taxes Payable 3662.5 2864.5 2957.935
Sales Tax Payable 20000 20500 21217.5
Short-Term Debt
Prepaid Revenue 450 300 500
Total Current Liabilities 26612.5 27164.5 29675.44
Long-Term Debt
Long-Term Liabilities
Total Liabilities 26612.5 27164.5 29675.44
Paid-In-Capital 35000 35000 35000
Retained Earnings 3000 5000 10000
Earnings 362837.5 390920.5 405721.9
Total Owner's Equity 400837.5 430920.5 450721.9

Total Liabilities & Equity 427450 458085 480397.3
In the same way as projected cash flow statement, projected balance sheet will show the
projected or estimated position of the business that is about to commence in the coming years.
As per the above projected balance sheet of Clean4U for the years ending 2023, 2024 & 2025 the
entity appears to operate in a good position and thus also has a positive impact on the cash flows
of the company (Trygstad, Larsen and Nergaard, 2018). Such projection is necessary to know the
estimation of where the company will be standing in the future to prepare for any sudden issues
and challenge that may be faced by the company.
7.4 Income Statement Projections
Projected Profit & Loss Statement
2023 2024 2025
Revenue 500000 512500 530437.5
Direct Costs 60000 61200 62424
Gross Margin 440000 451300 468013.5
Gross Margin (%) 88.00% 88.06% 88.23%
Operating Expenses:
Salaries & Wages 25000 26250 27562.5
Employee Related Expenses 18000 18540 19096.2
Marketing & Sales Expenses 8000 8000 8000
Utilities 1500 1500 1500
Insurance 3000 3000 3000
Start-up Expenses:
Equipment 2000
Legal Fee expense 1500
Marketing Fee 750
Cleaning Equipment 5000
Supplies 2500
Uniforms 5650
Expenses on Employee Vehicle Signs 350
Total Operating Expenses 73250 57290 59158.7
Operating Income 366750 394010 408854.8
Depreciation and Amortization 250 225 175
Income Tax 3662.5 2864.5 2957.935
Net Profit 362837.5 390920.5 405721.9
Net Profit Ratio 72.57% 76.28% 76.49%
As per the above projected profit and loss statement of Clean4U, it is clear that the
company is projecting its profitability position to be very strong as the net profit ratio projected
herein are 72.57%, 76.28% and 76.49% which are quite strong and thus, company aims to start at
a very profitable front. The projected profit and loss statement includes in its estimates expenses

that a service organisation incurs like legal fee expenses, marketing expenses, cleaning
equipment expenses, supplies expenses, uniform expenses, etc. Therefore, being a service
organisation, the net profits projected are up to the standards of an organisation in such service
organisation.
7.5 Breakeven Analysis
Break Even Point
Particulars Formula
Amoun
t
Selling Price per Unit 200
Less: Variable Cost per Unit 75
Contribution
Selling
Price -
Variable
Cost 125
Fixed Cost 100000
Break Even Units
Fixed cost/
contributio
n 800
Break Even Sales
Breakeven
Units *
Selling
Price per
Unit 160000
The company charges £200 for the one hour of its services. £75 is the total of variable
cost that is incurred for providing such services. Company’s fixed costs are £100000. Per hour
services charge less variable costs provides the value of contribution that the service generates to
cover the fixed costs of company. For calculating breakeven units fixed cost is divided by the per
hour contribution. The result is 800 which means clean4U will cover its fixed cost and reach a
situation of no profit no loss after the services being provided for 800 hours. Services for any
hours above this will start earning profit for the company.
7.6 Exit Plan
Exit plan refers to the selling of the company by its founders. In exit plan exit strategies
are developed before actually going into the business. The reason is that the exiting a business
have a great impact on its development (Zhao and et.al., 2022). Some of the common exit plans
are mergers and acquisitions, selling the business and taking the company public. Clean4U
business exit plan will be merger and acquisition.

7.7 Milestones
Millstones that the company is looking forward and working for achieving includes
developing a business model that profitable. To ensure that each of its client is opting repeatedly
for the services (Ghazarian and et.al., 2022). Furthermore, having a marketing strategy that is
realistic & scalable. Hiring and training of employees at the best for building of a strong team.
8.0 Conclusion
On the basis of the business plan it can be said that the business idea is feasible and
profitable. Execution of the plan will assure generation of good returns for the money invested
by the founder. The plan has been prepared considering all the major aspects of the business
establishment.

REFERENCES
Aspøy, T. M., 2020. Job quality through upskilling? The case of the cleaning industry in the
collective system of Norway. Journal of Education and Work. 33(3). pp.229-241.
Beltrán-Martín, I. and Bou-Llusar, J. C., 2018. Examining the intermediate role of employee
abilities, motivation and opportunities to participate in the relationship between HR
bundles and employee performance. BRQ Business Research Quarterly. 21(2). pp.99-
110.
Books and Journals
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technology. International Transactions in Operational Research. 27(4). pp.1821-1844.
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Burke, D. and Cocoman, A., 2020. Training needs analysis of nurses caring for individuals an
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Ghazarian, A. L. and et.al., 2022. National Institute on Aging seed funding enables Alzheimer's
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Jiménez Barbosa, I. A. and et.al., 2019. Ocular surface and tear film changes in workers exposed
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