ACE SERVICES

ACE SERVICES
Zimmerman, P.O Box 64512 -00600 Nairobi, Kenya, Mobile: +254 722 40 97 83 Email: aceservices@yahoo.com

PROPRIETOR: SARAH KURIA

P.O Box 64512 -00600 Nairobi, Kenya Mobile: +254 722 40 97 83

Plan Prepared Date 1st July 2010

Plan Prepared by: SARAH KURIA

Copyright Ace Services, 2010

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Legal Page

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Ace Servicesin this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of Ace Services.

It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader may cause serious harm or damage to Ace Services.

Upon request, this document is to be immediately returned to Ace Services.

___________________ Signature

___________________ Name

___________________ Date
This is a business plan. It does not imply an offering of securities.

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Contents
ACE SERVICES ZIMMERMAN, P.O BOX 64512 -00600 NAIROBI, KENYA, MOBILE: +254 722 40 97 83 EMAIL:

..........................................................1 PROPRIETOR: SARAH KURIA P.O BOX 64512 -00600 NAIROBI, KENYA MOBILE: +254 722 40 97 83..............1 PLAN PREPARED DATE...............................................................................................................................................1 1ST JULY 2010 .............................................................................................................................................................1 PLAN PREPARED BY: SARAH KURIA ......................................................................................................................1 1.1 Objectives ....................................................................................................................................................... 4 1.2 Mission ........................................................................................................................................................... 5 2.1 Company Ownership Ace Services will be a sole proprietorship, Owned by Sarah Kuria. This is a small business and need not publicly disclose its finances. The business can immediately start without the complicated procedures associated with partnerships, limited liability companies, or co-operatives. The owner/founder will be the director and will initially handle the bookkeeping responsibilities............................. 6 4.1 Market Segmentation and strategy .............................................................................................................. 9 Personnel Plan .................................................................................................................................................... 17 The following table and chart show our Break-even Analysis. ........................................................................... 19
ACESERVICES@YAHOO.COM

ACE SERVICES PLAN FOR A CLEANING SERVICE BUSINESS 1.0 Executive Summary Ace Services is a sole trader, start-up enterprise, to be established in Zimmerman, Nairobi with Sarah Kuria as the sole proprietor. The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services.

The company will have a production facility, but will need a retail shop front because of our pick-up and delivery service, a delivery van, and customer service trained employees. Customers can choose payment either at the time of each delivery, or by monthly billing. The Service will send statements to each contract customer, itemizing service fees and the charge for the service to their credit for payment, at the end of each month.

The business provides a new door-to-door dry cleaning, laundry, and alteration service in Zimmerman that surely will attract customer attention. Working customers may find this service is convenient for them and want to try it. If they are satisfied with the service quality they are likely to become repeat customers. When the patronage happens continuously, they become loyal customers of the service. These customers will recommend Ace Services to their friends and coworkers. As more and more customers use this service, Ace Services image is enhanced and we will gain more and more market share.

Ace Services projected growth rate will be very high each year with respectable profit margins as a percentage of sales. By the end of year one, Ace Services will have four additional employees. This house cleaning business plan will help the owner navigate the startup, and subsequent management of the business. 1.1 Objectives Ace Services objectives for the first three years of operation include:

To create a service based company whose main goal is exceeding customer's expectations. To increase our number of clients served by 20% per year through superior service.

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To develop a sustainable home-based business, living off its own cash flow. The utilization of Ace Services on a regular basis by at least 30% of the leads that contact us for more information.

1.2 Mission Ace Services mission is tooffer dry cleaning, laundry, and other cleaning services with free home pickup and delivery. Our high quality and convenience will save time for working customers.

1.3 Keys to Success

1. The business is entering the first year of operation therefore a comprehensive marketing strategy will be the key to success of the business.

2. It is important to remember that the target customers have money and want to be provided with a high quality service; therefore they will only use this service if they are entirely satisfied.

3. Furthermore, the hours of operation must be convenient and service completion must be timely in order that customers are not harried after a long day working.

2.0 Company Summary Ace Services is a sole trader, start-up enterprise, to be established in Zimmerman, Nairobi. The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services.

The company will have a production facility, but will need a retail shop front because of our pick-up and delivery service, a delivery van, and customer service trained employees. Customers can choose payment either at the time of each delivery, or by monthly billing. The Service will send statements to each contract customer, itemizing service fees and the charge for the service to their credit for payment, at the end of each month.

ACE SERVICES Initially, the production facility and the cleaning equipment will be purchased with accompanying maintenance contracts.

Start-up financing will be through owner investment and bank loans, with a line of creditestablished for operations eventualities. 2.1 Company Ownership Ace Services will be a sole proprietorship, Owned by Sarah Kuria. This is a small business and need not publicly disclose its finances. The business can immediately start without the complicated procedures associated with partnerships, limited liability companies, or co-operatives. The owner/founder will be the director and will initially handle the bookkeeping responsibilities. 2.2 Start-up Summary Capital resource plan Loan: Lending plan has to be completed and submitted to the bank two months before starting the business. Loan will be needed one month in advance.

Purchasing equipment: Buying new machines costs approximately Ksh400,000 including maintenance per year. The business is new and has less experience in maintenance and repair of machine breakdown, therefore the optimal solution is purchasing machines with warranty. The following machines will be purchased: 1 Washer - 20kg capacity, high spin, microprocessor control, electric heat 1 Dry cleaning machine - 20kg 1 ironing table 3 steam irons 1 Computer Storage tanks

Capital plan: The owner will invest Ksh32,000 in the business. Additional capital for the business will be borrowed from a bank. Buying a new van, and office/facilities equipment (computer, printer, telephone

ACE SERVICES Instrument, tables, chairs, shelving, work tables, racks, etc) and initial purchase of equipment Kshs. 658,500/= Marketing fees are for the production of business cards and brochures and fliers.and assorted brooms, mops, and chemicals (biodegradable). Uniforms will be used to give off a professional image.

Please see attached financial statements.

ACE SERVICES 3.0 Services Ace Services is going to provide the following services for customers with freehome pick-up and delivery in the Zimmerman area:

Dry cleaning Laundry for personal clothes and large items such as blankets, duvets, curtains, etc. Alteration service We will have four target customers: 1. The middle income earners, whodo not have spouses, dont like to do housework. 2. The nearby university students who do not have time to cleaning and washing. 3. Saloons for towels and linen 4. Hotels and hostels for their towels and linen Operations plan There are two ways for customers to take part in the service. Customers can sign contracts with Ace Services to get regularly scheduled service, or they can also order over the telephone or e-mail to Ace Services. Customers can choose payment either at the time of each delivery, or by monthly payments. The Service will send statements to each contract customer, itemizing service fees and the charge for the service for payment, at the end of each month.

An operations area for washing and cleaning activities, and storing not yet cleanedand cleaned products is needed. The facilitywill be divided into three main sections as follows:

1. Sorting and storage of dirty garments received 2. Laundry workroom 3.Storing cleaned garments after finishing prior to delivery

The whole operation process will be controlled and monitored by a laundry expert employee, andgenerally managed by the business owner.

ACE SERVICES 4.0 Market Analysis Summary There are a number of reasons for choosing the dry cleaning, laundry, and alteration service industry:

Payment for the service is by cash, cheque, or M-PESA. No capital stagnancy, receive payment every month, easy to get instant profit. Capital requirement for purchasing commercial laundry equipment is minimal; therefore the risk of this business is low. This service only requires a few staff. Supplies needed service for customersfrequent demand (laundry - clean clothes). The demand for using service is increasing due to changing life styles, incomes, and theincrease in clothing expenditure. 4.1 Market Segmentation and strategy Ace Services will be focusing on two socio/economic groups. The first is the middle income where they have stable jobs. Although they have time at home over the weekend and have time to clean, he/she chooses not to. They have no desire to clean the house. To them that is not enjoyable and they have the money to pay someone to do that kind of work. This market has annual incomes over Ksh 30,000 and lives in nice houses. Our second segments of the market that we are targeting are university and college students. This group doesnt really have the time to clean, can afford a cleaning service, and choose to hire a service because they havelimited time to waste time cleaning their laundry and rooms. These segments are typically age 18-35.

This shows that more and more people have money (standard of living increased) but have less time to do their housework (laundry) in Zimmerman. They are often tired after working all day or going to school and tend to spend money to hire someone else to do the housework for them. Moreover, the demand on clothes of these working people (particularly professionals) usually increases proportionately with their income. Buying more clothes, especially expensive clothes, makes them

ACE SERVICES pay more attention to the care and cleaning of those clothes. With careful research, this business focuses on working and professional class customers as a target segment market.

Market Analysis Year 1 Potential Customers Middle incomeearners Students Income Total 13% 7.75% 8 23 9 25 10 27 11 29 12 31 10.67% 7.75% Growth 11% 7 8 9 10 11 Year 2 Year 3 Year 4 Year 5 CAGR 11.96%

4.2 Service Business Analysis

There are two competitors in dry cleaning, laundry and alteration services in Zimmerman: TrendCleaners and Woodbridge Hill Cleaners and Launderers. They are both small-scale services buthave quite a lot of customers (this information is collected by self research and observation).

However, these shops do not provide door-to-door service free of charge for customers. Hereunder are the strengths, weaknesses, opportunities and threats pertaining to this business:

4.2.1 Competition and Buying Patterns

Strengths: We offer a new service for dry cleaning, and laundry, providing another choice for customers. We provide quick and convenient service in order to save customers time.

Weaknesses: Strong competition from already established competitors in Zimmerman. Starting at no market share at all. Less experience than competitors.

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Opportunities: Expenditure in clothing is increasing, including expensive clothes; therefore the demand oftaking care of clothes also increases. There are more and more women who traditionally do the laundry and cleaning work in the family going to work outside the home. The target market of this business is working-classand professional-class customers. Average income of Zimmerman citizens is increasing. People tend to spend more time on leisure activities rather than doing the house work. There is a high likelihood of repeat business. The ability to decrease the fixed costs as the sales volume increases.

Threats: If the business is successful, there will be new competitors who supply the same kind ofservice. New technology changes may bring out new family washing machines for dry cleaning.

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5.0 Strategy and Implementation Summary

Evaluation The following areas will be monitored to evaluate the business performance: Monthly and annual sales Monthly and annual profit Repeat business Customer satisfaction

The business success will depend on quality and convenience of the service, customer opinions, and competitor response.

Optimism The business provides a new door-to-door dry cleaning, laundry, and alteration service in Zimmerman that surely will attract customer attention. Working customers may find this service is convenient for them and want to try it. If they are satisfied with the service quality they will likely become repeat customers. When the patronage happens continuously, they become loyal customers of the service. These customers will recommend Ace Services to their friends and coworkers. As more and more customers use this service, Ace Service's image is enhanced and we will gain more and more market share.

If we attain monthly and annual sales at least as forecasted, total costs and expenses, including any unanticipated charges, will not exceed our estimates and therefore the monthly and annual profit will be satisfactorily achieved. Difficulties and Risks Ace Services is a start-up and as such has less experience and begins with no marketshare at all. Assertive, effective initial marketing efforts will be necessary to gain a customerbase. If existing competitors see us as a major threat and they resort to overtly aggressive anddebilitating actions it will be very difficult for us to become an established player in themarketplace. Risks caused by competitors are possible, therefore the business has to monitorand evaluate its performance

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ACE SERVICES frequently, and collect customer evaluations and suggestions inorder to continually improve. Worst Case Risks The worst case scenario would be that the business cannot support itself on an ongoing basis.The costs of doing business may be under-estimated or sales and profit may be less thanexpected, making the business difficult to finance. Moreover, in case of social economicrecession, political changes, or inflation, the business may perform even worse than has been forecasted.

5.1 Competitive Edge As the Kenyan economy grows rapidly and quality of life is increased, people tend to spend moretime and money in leisure activities rather than doing their house work. They prefer thatsomeone else does the cleaning work for them. Zimmerman has a population of 129,701 served bythree dry cleaning and laundry shops. These existing shops wait for customers to bring theirgarments in and pick them up later. Customers have to drive cars to the shops, find parking places, carry their clothes or large items such as curtains, blankets, etc. to the shop, and to queue forbeing serviced. Then they must repeat this boring process when they come to collect theiritems. Moreover, these shops are only open from 9am - 6pm, and closed on Sunday, which arealmost the same working hours of offices; most inconvenient for customers especially those withfull-time jobs.

By understanding and addressing this need, our new dry cleaning, laundry and alteration servicewill be established, providing door-to-door service free of delivery charge. We make ourcustomers' lives simpler by saving them time, and eliminating waiting in queues, parking problems, forgetting to collect clothes, missing meals, and going home late.

5.2 Marketing Strategy Place: Trading directly with customers, conveniently in the customers' houses in Zimmerman. Weare choosing to not rent a shop in high street in the town centre, thereby reducing costs.Ace Services will receive clothes from and return them to customers' houses.Requests for urgent situation pickups and deliveries will be accommodated, and a nominal feecharged.

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ACE SERVICES Product: Free home pickup and delivery service, coming to customers' house between 6 - 9 pmtwice per week. We provide convenience and high quality dry cleaning, laundry, and alterationservices. Price: Normally, new businesses set their initial prices lower than their competitors. In oursituation however, the business has higher costs for our delivery service and promotions toincrease customers' awareness and establish our brand name. We will set our prices to matchthose of our competitors. The pricing scheme is based on a per-service price. Moreover, thebusiness targets working and professional customers who often pay less attention to price thanthe quality and convenience of service.

Promotion:
Advertise our new service through word of mouth (friends, neighbors, social groups, churches) Brochures, posters and fliers Offer 10% discount as an incentive for customers who sign one-year contracts. Issue coupons with lower price for loyal customers.

5.3 Sales Forecast The first month will be used to set up the business. It is unlikely much/any business will be officially transacted. In addition to dealing with legal and accounting issues for the business, office equipment will be purchased and set up. Once the physical office is ready we will then develop the employee policy and procedure manual. Then we will develop our training program. This will take a bit of time therefore it is very important it is set up at the outset, ensuring that it is completed and done properly when there are far less time constraints. The second month will begin to see some activity. We will begin to field inquiries over the phone and expect to turn some of those into contracts. The first week of jobs will be done as a team, with Sarah and one employee. As the number of contracts begins to pick up at the end of the second month an additional person will be hired to form the first employee team. By the end of month four we will have built up enough demand that a new team of two will be trained and begin working. Having two teams of two will be sufficient until month seven when two more people will be brought on. We expect to remain with a six person head count into mid-year two when we expect to bring on one more team.

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ACE SERVICES The sales forecast is based on the assumption that increased demand will occur at a steady pace. This is based on the assumption that a large part for our new clients after month two will be from word of mouth referrals. The logic is that we will incrementally gain customers as we continue to serve current customers. We will need a couple of visits before we can turn a new client into a referral service. All this will happen steadily and incrementally. This forecast is on the conservative side, it is possible that because we are superior to competing services that things really take off, however, it would not be prudent to take that aggressive of a forecast. It is always better to err on the side of caution.

Sales Forecast Year 1 Sales Middle income Households Students income Total Sales Direct Cost of Sales Middle income Households Students income Subtotal Direct Cost of Sales 600,000 780,000 1,380,000 Year 1 192,000 240,000 432,000 984,000 1,800,000 2,784,000 Year 2 288,000 540,000 828,000 1,680,000 2,400,000 4,080,000 Year 3 384,000 960,000 1,344,000 Year 2 Year 3

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ACE SERVICES 5.2 Milestones Ace Services will have several milestones early on: 1. Business plan completion. This will be done as a roadmap for the organization. While we do not need a business plan to raise capital, it will be an indispensable tool for the ongoing performance and improvement of the company. 2. Set up the office. This will be done within the first month. This includes setting up the physical office where business will be transacted. 3. Set up the Laundry room. It will occur in the first month. 4. Training program. This will be the development of a training program for the employees. The employees will receive initial sessions of training up-front, but will undergo constant training, part of our constant learning process. 5. Welcoming our sixth employee.

Milestones Milestone Business Plan Completion Office Set-up Set-up Laundry Room Training Program Welcome Fourth Employee 1/8/2010 1/9/2010 1/1/2010 5/1/2010 28/8/2010 15/9/2010 2/8/2010 6/8/2010 0 0 0 0 Sarah Sarah Sarah Everyone Management Management Management Everyone Start Date 1/8/2010 End Date 2/8/2001 Budget 0 Manager Sarah Department Management

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ACE SERVICES 6.0 Management Summary Ace Services is owned and operated by Sarah Kuria. It will be formed as a sole proprietorship. There is no compelling need to incorporate. Personnel Plan The staff will consist of Sarah working full time for Ace Services. Initially Sarah will be working in both the office as well as on jobs, by the end of month two she will be working only in the office and will have hired an additional employee. Month five will see an additional person hired, and month six will see two more hired for a total of four employees. We will be paying our employees a competitive hourly wage, quite a bit more than minimum wage. This is calculated to attract a much higher caliber employee that is not looking for temporary employment, but a stable job environment. This is compounded by the fact that in order to make our training cost effective for us, we need this person to be a part of the company for an extended period of time, not just a few months until a better job comes along. In addition to paying an above market wage, we will be offering extensive training. This personal development will be another attraction for the high caliber employee. The need for the higher class employee is necessitated because of the upper end clients that we serve. In order to exceed the customer's expectations of our services, we need to have the right employee that has been properly trained and feels a sense of empowerment on the job. Sarah will be paid a monthly salary. The rest of the profits will remain within the business.

Description Owner Laundry Expert Workers Total

No. of people 1 1 2 4

Salary Per Hour 100 80 60 240

Working Hrs/Week 50 50 50 150

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Personnel Plan Year 1 Owner Employees Total People Total Payroll 360,000 Year 2 420,000 Year 3 480,000

600,000 1,500,000 1,800,000 4 6 8

960,000 1,920,000 2,280,000

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7.0 Financial Plan

The following topics describe the cash flow statement, profit and loss account, and balance sheet have been built using forecasted information which is as accurate and realistic as possible. These financial statements show that the business runs quite well and achieves expected

7.2 Break-even Analysis The following table and chart show our Break-even Analysis. 7.3 Projected Profit and Loss
In general, the business might meet some difficulties in the beginning months but after that the business grows as expected and produces a small profit at the end of the year. It is not necessary for the business to gain high profit in the first year, breaking even is acceptable. Fixed costs Per Month Rent Maintenance Salary per month Total Variable Costs per Month Tea/Coffee Advertising Telephone Electricity Water and Soap Miscellaneous Total

13,000 5,000 50,000 68,000

1,500 7,000 2,000 3,000 10,000 5,000 28,500

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Profits Yearly
4

Amount in Millions

0 Profits Yearly in Millions

2010 1.3

2011 2.1

2012 3.6

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