For the purposes of this investigation a comprehensive review of a new cleaning company will be provided. The company, named “Next Best to Mom” seeks to provide college students and young professionals with all of the home-based and cleaning-based services provided by “mom.” The goal of the project is to begin operations in Waterloo Ontario and eventually expand operations to other college towns. In an effort to provide a solid basis for the development of this business venture, the following report contains: an analysis of the proposed market for the service, a review of the relevant business environment, a review of the marketing mix being utilized, and a financial performance analysis. Through a careful consideration of these issues, it will be possible to provide a comprehensive overview of how the business will initiated and developed.
Target Market
As noted above the target market for this service will be college students and young professionals—i.e. individuals between the ages of 18 and 35—living in the Waterloo Ontario area. The decision to initiate this business venture is predicated upon two specific issues related directly to this population: increased discretionary income and the inability to manage hectic professional and student schedules while managing many of the household duties typically performed by mom.
[...] The strings are so tight some experts have come up with a name for these college students—the ‘coddled generation'” (College student While this situation may ultimately seem like a bane for administrators at colleges and universities, the continued dependence of college students on their parents can be an asset to the proposed business. The organization can market its services to this target market in an effort to ease anxiety about being away from home. In addition, for parents that want to provide their children with all of the amenities of home but cannot afford to travel to school each week, “Next Best to cleaning services can provide a viable alternative for easing parental concerns over the student's ability to manage all of the new pressures of college life. [...]
[...] Employees will be asked to use their own vehicles for work. However one automobile will be purchased for the business. Insurance and gas will also be included. Total cost for the car purchase will be $13,500 and $700 monthly for car insurance and gas. Table 1 below provides an overview of these cost and revenues. Table Pro Forma Financial Statement Operating Revenues Revenues Operating Expenses Labor Supplies Expense Expenses What makes this business so profitable is the fact that few capital expenses need to be made. [...]
[...] In addition to the specific legal requirements for running a home-based business, cleaning service owners also need to consider the issue of insurance as it applies to both themselves and employees working in the business. Insurance requirements for home-based businesses vary by state and occupation. As such, the specific laws governing insurance must be taken into consideration. In most instances, business owners will want to carry the following types of coverage: liability insurance, this will protect the homeowner if an employee damages something in the home; workers compensation, this will ensure that the employee will receive care if he or she is hurt while on the job; and bonding, this will ensure that the homeowners have recourse if the employee steals from the home. [...]
[...] Thus, while the competition in the Waterloo Ontario area may command a significant amount of the residential market share, the goal for this organization is to create a whole new market niche, which focuses on service differentiation as a means to attract new clients to the cleaning services industry. Social Issues In addition to the macroeconomic issues that must be addressed by the organization, it is also evident that there are social issues that must also be considered. Among the most notable is a current trend among young adults and professionals to move toward autonomy and independence. [...]
[...] With this in mind, advertising will consist of weekly advertisements for the service in each local newspaper. In addition, advertisements will be placed in college campus newsletters and in local professional magazines. In addition, flyers will be posted on college campuses. Promotions for first-time clients and for referring a friend will also be used to bolster initial response to the business. An advertisement will also be placed in the local telephone directory and a website will be developed and published with all search engines. [...]
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