Business Plan For Equity Funding Of A Commercial Cleaning Service Venture

Background

The cleaning business idea was initiated on June 2017 with the intention of providing clean and safe environment for the residents of Sydney. Since then the organizations have shown interest on commercial cleaning service. The company attribute their success to a realistic commitment to the philosophy of the company that is conveying national organization capabilities based on culture, reliability honesty and transparency. For the few months of operation the company is committed in triumphing excellence in the industry because they believe in clean and secure environment is deserves by every citizen of Australia.

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The mission statement of the company is to deliver a commercial cleansing service through a culture based on family values of honesty, reliability and transparency.                            

(Ward, 2016).

Management team. Management team is concerned with managing day to day activities in the organization. Entire of this team is stated and their roles explained. This has help improving the company’s profile and persuading the reader that all the workers in such an organization have the right qualifications for undertaking the job perfectly. All the employees together with the qualifications are to be listed (Karlsson & Honig,2009). Management team include;

  • Personnel; these are employees who are concerned with smooth daily chores of the organization. Both the seniors and juniors are included here.
  • Advisor(s) to the organization are included here. This have had great strength to portray the use a business advisor.
  • The business lawyer and accountant

These are the destinations i.e., where the business is needed to be. The business goal is achievable and realistic in terms of time constraints in accordance with what is stated in the mission statement. (Nieman & Nieuwenhuizen, 2009).

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Business goals of the company has been  broken into three categories basing on the time they are intended to be attained. These categories include;

  • Short term
  • Medium term
  • Long-term goals

These are goals which describe actions which are done or to be done within the organization on a short period of time like on daily basis, weekly basis, monthly or even on quarterly basis. These goals are undertaken in order to attain the medium and long-term goals in the organization(Katz,2009).

The SMART approach was kept by the company when the management was setting the short-term goals. The approach has given an encouragement to the managers as well as the employees in aligning the goals of the business with individual goals.

Examples of these short-term goals in the company include;

a. Daily goals.

  • Holding a 20-minute strategy per morning
  • Converting 20 contacts to sales or appointments
  • Scheduling a 20-minute strategy meeting each afternoon

b. Weekly goals

  • Review 20 resumes
  • Have a weekly sales record for data totals.

c. Monthly goals

  • Drafting the sales data from the previous month to a monthly chart report.
  • Produce sales report of the previous month by every 12th of a present month

d. Quarterly goals

  • Quarterly report generation
  • Produce and send tax payments

These goals has help in bridging the gap existing between activities on a daily basis and the business long-term vision. These goals should last even for a period of more than a year for the new businesses. Because companies are expected to experience profits within a period of not less than 3 within 5 years, such companies prefer using a 5-year mark in denoting the end of medium and the onset of the long-term goals(Katz,2009).

Mission Statement

Examples of such SMART business medium-range goals present in the company are:

  • Deliver a quality survey to each member within a period of 20 days after immediate contact
  • Reduce, by 16%, the turnover in every quarter of the 4 of them

They have define vision of the business. Their intentions extend beyond the motive of making profits. These include development a well- educated workforce   as well as resource preservation(Katz,2009).

Such examples include;

  • Invest 3% of profits for improvement of technology
  • Become the leading company in the playing grounds with high degree of brand-building
  • Increase job-availability for the new graduates
  • Improve and increase time investment

These have been used in managing responsibilities, tracking results as well as in reviewing and revision. They define the plan tactics to practicality with a real budgets and management (Chen, Yao & Kotha,2009).

Each milestone has been given the following:

  • Identity
  • Due date
  • The responsible person
  • Start and stop time
  • Specific tactics relationships with strategy points.

In tabular form, milestone scheduling looks like as follows:

Milestone

Due date

Who is responsible

Details

This is concerned with both the quantitative assessment and the qualitative assessment. Market size in terms of volume and its value is also the one of the concerns of market analysis. It puts into consideration the segmentation of customers together with their buying patterns (Neck & Greene,2011).

It has help in the identification and the acknowledgement of competition as well as the market environment in terms of entry barriers and regulations. This has shown investors that an organization knows its market very deep, is the chief objective of market analysis.

Market analysis is better explained in the following sub-sections;

  • Market size
  • Customers being targeted
  • Needs of the customers
  • Completion and competitive advantage

This is concerned with the demographics as well as the segmentation of the company. While choosing the size of the market, the approach an organization uses largely depend on the business type it sells to the investor.

Depending on the involved market, the organization might need to divide it further into smaller divisions or segments. This segmentation of the market is of advantage where the organization’s competitor majorly keep focus only a particular segment (Black,2012).

Number of the potential consumers and the market value are the two major determinants to be looked at during market size assessment. Potential customer’s definition largely depends on business type an organization is involved in. A market size with higher percentage of the potential customers is more preferable than the one with a lesser percentage. However, this is not to be depended on alone because the market value has a great impact on the decision too.

Market value assessment is more tedious than the potential customers’ assessment. Public availability of the figure as to whether it is circulated via a consultancy firm or issued by a state agency/body (Casadesus & Ricart,2011).

Estimate can be done if the above selections are not readily available. The estimates building can done by two methods; bottom-up or top-down approach. The bottom-up approach involves beginning with the usage of unitary tenets to coming up with a global number whereas top-down is an approach which start by building the global number and later reduces it to domains. So, it is advisable to compare both of the approaches when the organization undertakes an estimate and also comparing the results from both of the approaches (Anderson & AL-Mubaraki,2012).

Management Team

The type of customers being targeted in the market by an organization is referred to as the target customers. This part is very important especially where the market of the business has clear segmentations being driven by different demands. For example, monetary value can be a driver for demand in a certain segment whereas prestige could be a demand driver in the other segment of the market (Beamish,2013).

Market analysis  has played an important role in showing  the potential investor that an organization is very well informed of its market and it knows the reason as to why they buy.

A detailed knowledge on the product/service’ demand drivers should be provided here. The organization’s competitive edge is placed here without an explicit mentioning so that the organization helps in preparing the reader so that he/she can embrace the organization’s positioning and make an investment in the company (Levy & Grewal,2012).

Market analysis has helps in this section in providing fair-minded view of who the organization is competing against. Strengths as well as weaknesses of the competitor should be explained together with the positioning. The main reason for this is to identify the weaknesses of the competitor so that it can aid the organization in using for positioning its own to the market. This is a competitive advantage This can be done through benchmarking of the company’s competitor against the available chief demand drivers (Asemi & Jazi,2010).

The organization’s successful growth has  largely depends on its ability to gradually build, nurture and retain its own loyal customers over a long period of time by building very strong competitive superiority (Brinckmann, Grichnik & Kapsa,2010).

Marketing has helps in the identification of customer’s need and ensure timely supply of the product in order to satisfy customers’ needs effectively. This therefore have ensures that the organization produces a product and services, making it available to the customers at a fair price, ensuring an effective supply to the consumers as well as informing them of the product and services characteristics through media in which they have an access to.

It is paramount that the organization concentrates on the four decisive areas as it plans its activities of marketing (Massa & Tucci,2013). These areas include;

  • Product or service
  • Price of the product
  • Place (or distribution)
  • Promotion

Inter-relation exists among them simply because making a decision on one of them brings an impact on the decisions to be made on the rest.

a. Product

In this section of the marketing plan, the organization ought to describe the products from the customer’s side of view

Business Goals

A product can be either tangible or intangible and each product passes through a logical life-cycle. It is therefore, important for the organization to get a clear understanding of such various stages and the unique challenges involved. The problems in which the product is trying to solve should be given here in details.

All the products in which the organization deals in, are listed. The most important characteristics of the customer as well as what the product will do for the customer. The organization should insert significance importance towards researching of the evolving and dynamic market needs in order to develop new products which are innovative and meet the emerging trends (McKenzie & Woodruff,2013).

For each of the provided service or good, its benefits are outlined; of what benefit is the product to a customer.

b. Pricing

The price of a product is that actual amount in which the end user of such a product do pay for it.  Product pricing in the company has depend on several factors but the organization has price its commodities at a price that is fair to both to the users of the product and the organization itself (McKenzie & Woodruff, 2013). For a product to sell in the market very fast, the organization has ensured that their prices of their goods and services are fair.

If the customers’ perception value is positive, then successful higher pricing than the goal money value is imperative and the vice versa is true.

Distribution strategies and the chain value may also affect pricing of the organization’s product as well as the way in which competitors do price their products

c. Promotion

Strategies and techniques for passing the information of the product to the customer are part and parcel of promotion heading. The organization has chosen to adopt advertising method, public relations, providing special offers and sales promotions to communicate to the intended final users of the organization’s product (Massa & Tucci, 2013).

The reason for choosing a particular communication channel over the other has be given. Also, the organization has given its plan on the usage of graphics as a support. Promotional budget, before the onset and on the ongoing, has been provided.

d. Distribution

It is also known as place or placement. It has a role of describing the process or method in which the product or service is delivered to the customers. The organization should have an assessment of which channel is likely to be most suitable to its own product. Depending on the nature of the product being provided by an organization, the length of the distribution channel is determined.

Market Analysis

Highly perishable goods require a much shorter chain of distribution as compared to those products whose perishability rate is low (Massa & Tucci,2013).

This section is concerned with the arithmetical expression of marketing strategies and the sections of operations on business plan. The organization requires sound records as well as well as financial management to aid in keeping assets together with liabilities (Casadesus & Ricart,2011). And, the company already knows its current and the expected cash positions.

Projecting the flow of cash is the key part of a business plan. This planning is such a simple concept involving a considerable development effort.

5-year Pro-forma financial statements

They are the probable statement of financial position which illustrate the financial outcomes especially if the operation of business is in line with Operations plus marketing sections.

This long-term financial planning which is strategic is meant to end and to replace short-term-deficit decrease. The company should have an ability of evaluating the financial implications which are long-term (Nieman & Nieuwenhuzen,2009).

Elements;

  • Company’s present economic position review
  • Predicted future revenues and expenses
  • Examining of the individual policy choices
  • Predict on some key specific revenue fund, expenditure as well as fund balances.

It is among the essential financial reports which the organization requires for financial management together with reporting.  It shows the items of value in which the company holds (Assets), the company’s debt (Liabilities). What remains after subtracting liabilities from assets is the owner’s equity.

This demonstrates how balance sheet changes will account. It is concerned with inward and outward cash flow within the organization and also aids in short-term liability determination.

It is helpful to the following group of interest;

  • Accounting personnel; in knowing whether the firm will have the ability of covering the payroll
  • Potential lenders; need a clear view of the firm’s repayment ability
  • Shareholders of the business

Budget estimates and use of funds.

The amount of money borrowed has been stated by the organization together with the purpose in which the borrowed money would be used for.

Collateral for securing the loan by the business has been provided together with its value. A tie exist between the figure and financial projections.

This sections has given a clear scope to the prospective borrowers about the entire project the organization is undertaking.

For a start-up, use of funds is dependent on the stage they are in. Because of its early stage the company has been saving money mainly for development purposes. Product and services complexity has been a determining factor since a quite significant lump sum amount has been used in research for a start-up (Katz, 2009).

A risk can be defined as event with uncertainty. It should be noted that risks are not always negative and thus they become an opportunity.

Marketing Plan

Risks are uncertain while the organization is still planning the project but as it goes along, risks develop (Chen, Yao & Kothas,2009). Therefore, these risks in the comapnay can be handled in the following 4 ways;

  1. Avoidance; the fundamental issue to undertake on a risk is avoiding it because if the organization can prevent from its occurrence, automatically, it will not have any negative impact on its project.
  2. Mitigation. If the organization has got no ability of risk avoidance, the best remedy is to mitigate; this is to mean the organization can take an action which can reduce the adverse damage of the risk
  3. Transfer. The most efficient and effective way of handling a risk. It is done through making a payment to another person who is to accept and do it on behalf of the organization. An efficient way of doing this, is through having an insurance cover.
  4. Acceptance. If all the above have failed, acceptance is the only option remaining.

This occurs when an investor who previously had put money into the startups gets back the money back, especially several years later, for a much more amount of money than the one they had originally spent. So, for an organization looking for the venture capital ought to have this exit strategy as it a requirement by the investor (Schaper et al,.2014).

This strategy usually happens in two ways;

  • The startup can be an acquired by a relatively bigger company for monetary value which is enough for giving a return to an investor.
  • A startup can experience growth and prosperity enough to enable it register for providing shares to the demanding public for an amount.

During an exit strategy, a valuation is of much importance. Establishment of price expectations is done by a valuation professionalism where the organization’s state of finance, position of the market as well as the strengths besides the weakness of an organization (Neck & Greene,2011).

Expertise on valuation uses methods which include;

  • Cash flow operation
  • Revenue value

Conclusion

A business plan is a paramount factor for a startup organization for looking of capital venture. This includes conducting a very suitable analysis of the market and marketing plan. It is by a well-inter-relations of the market mix that success of any organization strives.

References

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Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014. Entrepreneurship and small business.

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Karlsson, T., & Honig, B. 2009. Judging a business by its cover: An institutional perspective on new ventures and the business plan. Journal of Business Venturing, 24(1), 27-45.

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