ABC Cleaning Services: Business Plan, Budget and Financial Analysis

This assignment presents a comprehensive business plan for ABC Cleaning Services, targeting the upper-class residential market in Australia. The plan details the services offered, including kitchen, bathroom, and general cleaning, emphasizing the use of advanced equipment and human capital training. The business targets affluent individuals and dual-income families. The market analysis highlights the growth potential of the Australian cleaning services market, with revenue projections and competitor analysis. The assignment includes detailed cost estimations for direct materials, direct labor, and overhead expenses. It also presents a master budget with revenue, direct material, direct labor, overhead, cost of sales, support department, and a budgeted statement of profit and loss. The financial projections include net income and a reflection on the challenges and learning experiences during the budget preparation, concluding with a list of references. The assignment was prepared for a Performance Management and Control course at La Trobe University.

Cleaning Services Business
Assignment on cleaning services in Australia
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Cleaning Services Business
ABC Cleaning services in Australia
The ABC cleaning services will provide cleaning services to the upper class residential
of Australia. The services can delight the customers through generous human capital
training investment. The agency provides cleaning services ranges from cleaning of
kitchen, bathrooms, bedrooms, balconies, banquet halls, common plots etc. It uses one
of the most sophisticated and advance accessories to clean the floor. The business
will operate as a part of service industry. We would hire professionals to perform the
entire task considering safety measures. The increased income is directly proportionate
with the increase number of upper class families. More than 20% of the entire
population is considered as the affluent families and the number is increasing
continuously (Australian bureau of statistics, 2017).The agency will basically target two
kinds of customers: 1 the affluent individual who has a spouse who does not work but is
not likely to do any household core work. There are many customers who feel that
having house cleaner is a status symbol. 2. Both spouse are working and cannot afford
to spend time in cleaning. Both of these customers hire cleaning agencies for better
services at home.
We have selected Australian market to deliver our cleaning services because Australian
market is one of the most growing markets in last five years for these particular
services. It has been observed that the overall revenue is expected to rise by 3
percentage by next year and amounts to be $12.8 billion (ibisworld.com.au, 2019). More
than 100 agencies are working towards cleaning services and ABC will work in the
same line expected to serve 10,000 customers ages 32-55 and live in residential valued
over $250,000 (Helga.D.Svala, 2017).
Vision
The vision of the ABC cleaning service agency is to increase the number of clients by
20% every year and make agency environmentally sound and best in the respective

Cleaning Services Business
area. The mission is to be the number one cleaning service agency with having trained
professionals and technological advanced equipments on place. Overall the market size
for this particular agency is projected to develop at a CAGR of 6% and aim to reach
$74,299 million by 2022 (alliedmarketresearch.com, 2017). It is observed that the
cleaning services have gained popularity because of several factors but increase in
disposable income and number of working women in the society has been considered
as one of the most influential factor in the society.
Standard cost
Estimation of direct material cost
Estimated Material Budget
Sr No. Particulars Budgeted amount in $
1 Uniforms 100
2 Cleaning equipment and tools 550
3 Computer equipment 1000
4 Office furniture 200
5 communication devices 400
6 Stationery 100
7 Cleaning supplies (liquids) 270
8 Magnetic Car signs 80
Total expenses (estimated) 2700

Cleaning Services Business
Based on the existing business in the industry, we have calculated estimated direct
material cost for ABC cleaning agency in Australia. The major expenses are done for
acquiring technological equipments (Rogers, 2019). It has been observed that direct
material costs are covering almost 30% of the overall budget. However, it varies with
the services offered. Here, we have included communication devices, stationary,
cleaning supplies and other equipment as a part of direct material cost.
Estimation of direct labour
Estimated Labour Budget
Sr
No. Particulars Person Hours per
visit
Budgeted amount in $
per hour
Total
Costing in
$
1 Basic Object cleaning 4 15 60
2 Fitting 2 12 24
3 Drying 1 15 15
4 Chemical Cleaning 1 22 22
5 Vacuum Cleaning 1.5 17 25
6 Quality check and
control 1 14 14
7 Annual inspection 4 10 40
Total expenses (estimated) 200
Here, the ABC cleaning service agency is a labour intensive industry. Here, as a part of
the business, we need to hire many skilled laborers who are aware about fitting, drying,
cleaning processes with chemicals. The target market will be affluent families along with

Cleaning Services Business
middle class families where both spouse are working. Based on their needs, the
vacuum cleaning and basic object cleaning facility will change. Overall, $200 will be
expected to be spent in direct labour every month. Approx. 15 hours will be needed per
visit. Hence, the calculation will be based on the number of visits asked by the
customers (Crowe).
Estimated overhead cost
(N.A, 2015)
Estimated Overhead costs
Sr No. Particulars Budgeted amount in $
1 Property Taxes 110
2 Accounting and legal expenses 300
3 Insurance 350
4 Utilities 200
5 Depreciation 120
6 Licenses 60
7 Government fees 45
8 Administrative salaries 185
Total expenses (estimated) 1370
The overhead expenses are prepared based on the theory and related practical
implications. The overhead expenses majorly covers the operating expenses of the
cleaning agencies such as property taxes, licensing, and accounting expenses.

Cleaning Services Business
Master Budget
Revenue Budget
Revenue Budget (First Month)
Sr
No. Particulars Number of customers
served
Total Price of each
service in $
Total
Revenue
1 ABC Cleaning
Sales 68 350 23800
Total expenses (estimated) 23800
Direct Material Budget
Direct Material Cost
Sr No. Particulars Budgeted amount in $
1 Uniforms 80
2 Cleaning equipment and tools 500
3 Computer equipment 780
4 Office furniture 189
5 communication devices 338
6 Stationery 110
7 Cleaning supplies (liquids) 287
8 Magnetic Car signs 78
Total expenses (estimated) 2362
Direct Labour Budget
Direct Labour Cost (Monthly)
Sr
No. Particulars Person Hours per
visit
Budgeted amount in
$ per hour
Total
Costing in
$
1 Basic Object cleaning 4 14 56
2 Fitting 2 12 24
3 Drying 1 14 14
4 Chemical Cleaning 1 23 23
5 Vacuum Cleaning 1.5 17 25
6 Quality check and control 1 11 11
7 Annual inspection 4 10 40
Total expenses (estimated) 193

Cleaning Services Business
Direct Overhead Costs
Direct Overhead costs
Sr No. Particulars Budgeted amount in $
1 Property Taxes and Rent 128
2 Accounting and legal expenses 289
3 Insurance 333
4 Utilities 198
5 Depreciation 125
6 Licenses 78
7 Government fees 44
Total expenses (estimated) 1195
Cost of Sales Budget
Cost of Sales Budget (Monthly)
Sr No. Particulars Budgeted amount in $
1 Direct Labour cost 13124
2 Direct Material Cost 2362
3 Transportation cost 186
4 Utilities and overhead 1195
Cost of goods sold 16867
Support Department Budget
Sr No. Particulars Budgeted amount in $
1 Administrative expenses 250
2 Marketing expenses 256.4
Cost of goods sold 506.4

Cleaning Services Business
Budgeted statement of profit and loss
Sr No. Particulars Amount in $
1 Revenue (Sales) 23800
2 Cost of Goods sold 16867
3 Gross Margin 6933
Operating Expenses
4 Administrative expenses 250
5 Marketing expenses 256.40
Total Operating Expenses 506.4
6 Operating Income 6426.60
7 Income Tax 17% 1092.52
8 Net Income 5334.08
Reflection
The business will operate in the service industry and hence it is difficult to measure its
success. The service industry businesses measure their success through the quality of
the services provided to the customers. The budget was difficult to prepare as the direct
labour cost and overhead cost for particular business were varied and complex.
However, the tables were prepared in excel and easy to edit the tables and graphs. The
entire range of information has been taken from the existing cleaning business in the
industry. Overall the assignment was interesting and learned new aspect of business
plans.

Cleaning Services Business
References
alliedmarketresearch.com. (2017). Cleaning Services Market by Service Type.
Australia: allied market research.
Australian bureau of statistics. (2017). Household Income and Wealth, Australia,.
CANBERRA: Australian bureau of statistics.
Crowe, M. (n.d.). A Cost Percentage Breakdown Of A Cleaning Contract. Retrieved
September 15, 2019, from https://www.cleanlink.com:
https://www.cleanlink.com/cleanlinkminute/details.aspx?id=52459
Helga.D.Svala. (2017). Mothers house cleaning. palo alto software.
ibisworld.com.au. (2019, September). Commercial Cleaning Services - Australia Market
Research Report. Retrieved September 15, 2019, from
https://www.ibisworld.com.au:
https://www.ibisworld.com.au/industry-trends/market-research-reports/
administrative-support-services/commercial-cleaning-services.html
N.A. (2015). Cleaning Business Financing & Budget Allocation. Retrieved September
15, 2019, from https://www.profitableventure.com:
https://www.profitableventure.com/cleaning-business-budget-allocation/
Rogers, K. (2019, March 5). Direct and Indirect COGS in a Service Industry. Retrieved
September 15, 2019, from https://smallbusiness.chron.com:
https://smallbusiness.chron.com/direct-indirect-cogs-service-industry-75032.html