XYZ Cleaning Company
Major Project-Marketing Plan
Lisa Cannistraci
1
Table of Contents
Executive Summary 2
Company Description 3-4
Service 4
SWOT 5-6
Target Market 7-8
Price 8-9
Place 10
Promotion/Marketing Strategies 11-12
Profit and Loss Statements 12-13
References 14
2
EXECUTIVE SUMMARY
XYZ home services will offer many services to busy households along with some
commercial cleaning services as well. Our mission is to help improve and sustain the busy life
of families by helping to connect them to basic everyday services we can provide. Our services
such as house cleaning, yard maintenance will allow parents, care givers, and others the ability to
spend quality time with their loved ones with their limited amount of free time. Families come
in many different sizes and varieties and not one-stop- type services will work for all families
and our company understands this changing environment. Our goal is to provide options and
unique solutions to fit the growing need of this diversity. These families that we will be targeting
will range in the services desired; however, we are focusing on high level professionals that have
resources but limited amount of time. XYZ Company will offer high quality, professional, and
trustworthiness that these target markets demand. It is estimated that the average cleaning
company loses up to 55% of their customer base every year due to poor service. As one business
owner states – good work goes unnoticed for years, but a bad job gets you fired immediately.
(https://www.franchisehelp.com/industry-reports/cleaning-industry-report/)
Our goal is to provide exceptional services to our customers that develop loyal
relationships and leads to repeat customers and also produces new customers through word of
mouth advertising. Another goal is to increase our customer base each year by providing
personal and excellent service to each customer. The company will be led by a partnership of
Naomi and her husband Jay (owners) that will be responsible for the marketing and development
of the company. Our job will be more specifically in the area of marketing and sales in the initial
3
startup of the company. As we obtain more clients who desire our services we will continue to
hire additional employees.
COMPANY INFORMATION
Although cleaning services are very common and there are many out there XYZ
Company is a new start up service business in which we will be targeting working professionals
with higher incomes or 2 income working families. Commercial cleaning is not out of our
market completely, but since it requires additional licensing, expensive equipment, and large
pool of employees this market is not ideal for a startup such as XYZ Company. We will offer
various household cleaning services such as light housekeeping, heavy house cleaning services,
laundry services, yard maintenance, weeding, power washing of exterior of home, window
cleaning, and other specialized services based on individual situation. The climate is changes
with the seasons so to accommodate these changes we will offer services such as leaf removal in
the fall and snow plowing in the winter. The one thing we will offer every customer/client is
professionalism, convenience, and trustworthiness in all our services. In recent years there has
been a shift in this type of service, in the past families would have a nanny or a maid and this
person many times would live with them and actually be part of the family. Today, however, we
are seeing more and more families gravitate towards the cleaning company and hiring someone
to help when needed or even on a regular basis for general housekeeping needs. Live-in maids,
though, are now an anachronism—their outfits are more often seen as Halloween costumes or
part of sexual roleplays. (https://www.theatlantic.com/business/archive/2015/09/decline-
domestic-help-maid/406798/)
4
Housekeeping is a much needed service especially to the women population that is forced
to also be a part of the income that is produced in the household. We will specialize in easing the
burden for the working mom by taking care of some of the domestic duties she is not able to
accomplish due to working out of the home. In providing this service we hope it serves a need
and will add value and quality to the families we serve.
SWOT ANALYSIS
5
Part of our strength as a new start up is our ability to control the direction of the company. We
are just starting out so we are the only employees and responsible for all the business activities
including the actual labor of the company. This helps cut down on initial startup costs and also
allows us to determine success of company. Jay has a marketing background is well known in
our community as has many networks, while Naomi is known in a different circle. She currently
has a food business and also has a network of customers.
There are some weaknesses in a new start up such as this one, with the most obvious is
growing the customer base and surviving while the customers base is being developed. In
addition to finances this company’s biggest expense will be the employees. It will be extremely
important to utilize our employees and be sure they are kept busy working on actual cleaning
6
job. We will not be able to keep employees unless we can keep them busy, but again we will not
be able to keep them busy without the clients we are serving.
The opportunities are positive and good for this industry if we are able to market
effectively. As the ages of our target population get older they are willing to spend additional
financial resources to seek ways to create more leisure time. The cleaning services industry is a
$46 billion dollar industry. The industry is expected to grow 5.5% annually through 2016 with
current business trends toward outsourcing and purchasing by two income families looking for
more leisure time. (http://www.sbdcnet.org/small-business-research-reports/commercial-
residential-cleaning-services).
Competition in this industry is fierce as there are many big franchises and big companies
that specialize in commercial work and also offer residential services. These big companies try
to squeeze out the smaller companies by offering such a range of services it makes it hard to
compete. In addition these large companies are heavily financed and market nationwide with
social media, websites, and multiple locations. Care.com for example started as just a way to
hire a babysitter for the kids; however, today they are venturing into all areas of services such as
errands, cleaning, maintenance, pet walking, and even house sitting. Many times when a
consumer uses them for babysitting they will tend to use them for other services. Although this
is a true concern for our startup we are confident we can build a solid customer base one satisfied
customer at a time. Our competitive edge will be in human capital meaning as owners of this
company it is in our best interest to use our skills and knowledge to train employees. We will
have a training program that stresses the motto of the company---exceptional customer service.
7
TARGET MARKET
XYZ Cleaning Company only survival will be based in the customers we target and our
ability to offer quality and honest service that stands out among the competition. We will be
targeting a distinct segment of the population, two income family households. The suburbs
outside of Boston are loaded with this segment. This population market will demand
professionalism and quality work along with a fair price. Word of mouth will be our biggest
asset and how we plan to target new customers because it virtually will be the customers to us.
We will also target the very wealthy population that has a social status to adhere to. Although
only one spouse may work and the other spends time at home and can clean, they chose not to.
Instead they spend their time in public interests, volunteering, social events or other activities
that fill their time and leave little time for cleaning.
The second target market will be the two income families, which will make up a majority
of the company’s sales. These families will have a combined family income of over 125,000 and
will be such that although they wouldn’t mind cleaning their homes, they just don’t have the
time. They will chose to hire someone to help because the opportunity costs are too high
compared to the time wasted cleaning. We estimate that approximately 60% of the families that
fit into these target markets currently utilize some kind of cleaning service. The households
typically range in ages of 35-55 with average house valued at over 350,000 and a population of
over 25,000 with projected growth of 3.5% yearly. (http://www.city-data.com/city/Winchester-
Massachusetts.html)
8
PRICE
Due to the fierce competition and the fact we are a small, new startup business we will
need to impose the “Competition Pricing Strategy”. This means we will set a price in
comparison with our competitors. With this strategy we could price above them, below them, or
at the same price. Many of our larger competitors will use a below strategy by price matching or
offering refunds for difference in price. Starting out XYZ Cleaning will price below what others
are charging because we will not have overhead or inventory costs to cover. This will allow us to
gain a small customer base one customer at a time. A happy, satisfied customer will practically
bring more customers to us through word of mouth and referrals. Pricing will be based per house
9
or square footage. Typical pricing will range 25-35 per hour and a typical square foot of 1000 or
less a flat fee of 100 with large areas increasing in $50 increments. Our brochures will reflect
price ranges as with this type of service it is hard to set exact pricing because many factors will
go into the price. Things such as frequency, if there are pets, surfaces to clean, specialty items
such as windows, furniture, carpets. Lawn maintenance services will be by size of lawn.
Window cleaning will be included in an hourly rate, and carpet cleaning on square footage.
Snow removal will be based on size of area to be plowed with minimum fee of $30. We will
have a range of prices but always indicate calling for estimate. Estimated average sale from each
customer will range between $250-350. XYZ will start off with 1-2 employees on payroll,
however, many services such as yard and snow removal will have the ability to sub contract out.
These services require special equipment and additional expenses and it makes sense to use
someone who specializes in this area. The company will be required to provide the person doing
the work a 1099 tax document to show payment but does not require XYZ to put them on
payroll, which will save on payroll taxes and insurances.
Year 1 Year 2
Sales 175,450 192,850
Direct cost of Sales (28%) 49,126 53,998
GROSS MARGIN 126,324 138,852
PLACE
10
XYZ Cleaning Company’s overhead will be very small considering we will be operating
out of home. We have a large space that is our current office and it is where our marketing and
sales activity will take place. As the company grows we can continue to expand but initially we
will need to keep costs down. The location and place we will be targeting customers is a suburb
of Boston called Winchester in Massachusetts. This is the idea location because it is a
community that is close to us but also a community where we are known and have many
networks and connections. We will have printed materials such as brochures, referral cards,
business cards and other various marketing materials. These materials will include our website,
mailing address, and phone numbers. Customers will be able to contact directly to request
pricing and to schedule case by case estimates on services. Although this will be extremely low
overhead there will be some startup costs involved in cleaning supplies, some light equipment
purchases, and licensing and insurance. Service type business have the highest expenses in
payroll expenses and for XYZ company the owners will be the only employees initially until we
gain enough customers to support hiring outside employees.
PROMOTIONS/MARKETING
Marketing will be a key point for XYZ Cleaning Company due to the fact we are a new
business entering the market. The strategy will be to first create customer awareness of who we
are and what services we offer. Next step will be to develop customer base and finally build
customer loyalty and create referrals from existing customers. We plan to accomplish this
through several ways. First we have created a distinct logo for our company and will be using in
on all our printed materials, such as brochures, business cards, and other printed marketing
supplies. Our website will be another important way to raise awareness and through social
11
media sites. Jay has knowledge of SEO and how to help our name appear at the top of a
GOOGLE search with key words such as cleaning. There are many other referral companies
such as “Home Advisor” or “Angles List” that people will use to search out services such as ours
so we will need to find a way to be included in those searches also. People love discounts and
promotions so we can run specials that appear on our Facebook page and use this as another tool
to gain awareness of who we are. Customers will be able to gain additional services by referring
their neighbors and friends. Obviously there are many cleaning companies out there and
consumers are often overloaded with choices. In a Niche type of marketing a company can focus
on a particular segment or consumers to target. Another words by fulfilling a specific need that
is not being met by other cleaning companies we can find a niche in the market. We believe our
superior, friendly, honest, and excellence in pleasing the customer will help us find that niche.
FINANCIALS
As for financing Naomi has a unique way to finance their new business. It takes capital
to start and to run any business small or large and borrowing money the traditional way is
sometimes time consuming and can be expensive. XYZ Cleaning Company gain their much
needed capital as a loan from Naomi through a securities based line of credit. Naomi has an
individual brokerage account that she has used as collateral for a line of credit. She has been
extended a credit line of 250,000 with an interest rate of 3.65%. The interest fee is only charged
on outstanding principle balance and since this is a line of credit the company can access funds
when needed and pay back on principle as excess funds are available. Below is the income
statement with startup cost projections and expected income and expenses.
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9
Profit
and
Loss
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Service
1-Housekeeping
s
85,000.00
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75,000.00
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110,000.00
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Service
2-Lawn
Service
(25,000.00
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8,000.00 8,000.00
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Other
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5,000.00 5,000.00
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TOTALREVENUES
722,000.00
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78,000.00
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Service
1.
4,000.00
r
4,000.00
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Service
2.
13,000.00
r
13,000.00
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Service
3.
3,200.00
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3,200.00
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1,900.00,
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1,900.00,
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Payroll
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225.00
r
225.00
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750.00
5,000.00
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(4,250.00)
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50.00
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50.00
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TOTALCOSTOFGOODSSoLD———~S,425.00"
500000
78,125.00
24
25.
GROSS
PROFT
(LOSS)
9,875.00
70,000.00
29,875.00
26
27
OPERATING
EXPENSES
(28
Advertising
and
Promotion
300.00
7200.00
7
(6,200.00)
29)
Automobile/Transportation
50.00
45.00
7
5.00
30
BankService
Charges,
30.00
25.00
7
5.00
31
Business
Licenses
and
Permits
1,800.00
7
(1,800.00),
32
Computer
and
Internet
125.00
2,500.00
7
(2,375.00)
33
Dues
and
Subscriptions:
500.00
7
(500.00)
34
Insurance
600.00
600.00
7
-
35
Merchant
Account
Fees:
600.00
r
600.00
36
Miscellaneous
Expense
25.00
r
25.00
37)
Office
Supplies
50.00
1,200.00”
(1,150.00),
38
Payroll
Processing
200.00
r
200.00
39
Postage
and
Delivery
20.00
r
20.00
40
Printing
and
Reproduction
50.00
1,500.00
7
(1,450.00),
41.
Professional
Services-Legal,
Acc
250.00
3,200.00
7
(2,950.00)
42.
Salaries-indirect
5,000.00
3,805.00
7
1,195.00,
43. Payroll
Taxes
and
BenefitsIndire
‘425.00
‘1100
14.00
u
44
Subcontractor
- -
r
-
45
Telephone
488.00
7
(318.00)
46
Travel
56.00
7
44.00
47
Utilities
r
280.00
48
Website
Development
4,700.00
7
(4,700.00)
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OPERATING
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91,600.00
41,970.00
49,630.00
52
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Interest
(Incoms)
:
S55
Interest
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225.00 225.00
56
Income
Tax
Expense
3,230.00 3,230.00
'57_TOTALINTERES
INCOME},
EXPENSE
3,455.00
1455.00
52
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13
References
Bloom, E. (2017). Middle-Class Life in the '50s Was Easier Because So Many People
Had Hired Help. The Atlantic. Retrieved 10 August 2017, from
https://www.theatlantic.com/business/archive/2015/09/decline-domestic-help-
maid/406798/)
Cleaning Industry Analysis 2017 - Cost & Trends. (2017). Franchisehelp.com.
Retrieved 10 August 2017, from https://www.franchisehelp.com/industry-
reports/cleaning-industry-report/
Cleaning Services -. (2017). Sbdcnet.org. Retrieved 10 August 2017, from
http://www.sbdcnet.org/small-business-research-reports/commercial-residential-
cleaning-services
Jeffrey, B. (2017). 52 Types of Marketing Strategies –
cultbranding.com. Cultbranding.com. Retrieved 10 August 2017, from
http://cultbranding.com/ceo/52-types-of-marketing-strategies/
Perreault, W., Cannon, J., & McCarthy, E. Essentials of marketing.
Winchester, Massachusetts (MA 01890) profile: population, maps, real estate,
averages, homes, statistics, relocation, travel, jobs, hospitals, schools, crime,
moving, houses, news, sex offenders. (2017). City-data.com. Retrieved 10 August
2017, from http://www.city-data.com/city/Winchester-Massachusetts.html)
