Business Plan

On
Rent a Maid service

Submitted
To
Mr.Ahsan javeed

Submitted
By
Hassan irshad (026)
M.Tayyab (036)
Muzamil (034)
Hina zaheer (012)
Rabeah Akbar (054)
Neelam shehzadi (027)
Jan 5,2017
 Acknowledgement
My sincere thanks goes to the faculties of University of Sargodha, Mr.
Ahsan javeed for providing me with study material, guiding me,
providing with valuable information for completion of the business plan
and helping me to make sound business development plan and giving
me valuable comments during this period. Lastly I would like to thank
everyone who has directly or indirectly supported me for completing
my business development plan.
 Executive Summary
Business venture aims to provide maid facilities for busy household of
urban areas of Sargodha city . The venture will be conducted under the
management of Rent A Maid Service. This plan will serve as the
financial and operational outline and plan for the first five years of the
venture operation. The company will obtain a loan through financial
institutions in the amount of 10, 00,000. Additionally, remaining
amount of Rs. 10,00,000 will be financed by the founder.

The concept of Rent A Maid services is to provide maid facilities such

cooking, cloth washing, dish washing, house cleaning, baby and old age
care to the households in Sargodha city. The venture will focus on
middle, upper middle and upper class people living in both private
homes and separate apartments who do not have time for such
household activities. For this sake, the company plans to advertise its
service facilities through various media and above all it will rely more
on personal links and relationships. The venture will start from the
beginning of 2017. The office will be located in NST Sargodha.

The concept is entirely new of its kind. Even though there are no such
players with similar concept in the market, but still some indirect
competition can pose a challenge Rent A Maid Services and its business
concept. The market survey conducted shows the business plan to be
feasible and also financial projections for Rent A Maid Services show
the potential for success and growth in the existing market. Total initial
capital investment will be Rs. 20, 00,000 with 50 % equity contribution
and 50% loan.
Table of Contents

Acknowledgement ................................................................................... i

Executive Summary……………................................................................... ii

1.Company Overview…..................................................................... 11.1

1.1 Background of
the Business…. .................................................................................. 1

1.2.Basic Philosophy................................................................................2

1.2.1 Vision.........................................................................................2

1.2.2Mission.......................................................................................2

1.2.3 Objectives………..........................................................................2

1.2.4 Critical Success Factors………….....................................................2

1.2.5 Company Values.........................................................................2

2.BUSINESS ENVIRONMENT ANALYSIS..................................................4

2.1 Industry Analysis…............................................................................. 4

2.2 SWOT ANALYSIS…............................................................................. 5

2.2.1 Analysis Rent A Maid Service……………………..................................5

3. SERVICES PROVIDED .......................................................................... 8

3.1 Services............................................................................................. 8
4.MARKET RESEARCH AND ANALYSIS.................................................... 9

4.1 Primary Research …........................................................................... 9

4.2 Sampling Plan…................................................................................ 9

4.3 Research Instrument……................................................................... 9

4.4Target Market ..................................................................................10

4.5 Data sources……..............................................................................10

4.6 Survey Findings ...............................................................................10

4.7 Company strategy……......................................................................11

5.Company Profil.................................................................................12

5.1 Form of Business ............................................................................12

5.2Organization Structure................................................................... 12

5.3 Recruitment and Selection .......................................................... 14

5.4 Remuneration and Compensation System .................................... 14

5.5 Training and Retention Plan……………...............................................14

6.Operational Plan............................................................................15

6.1 Quality Management.......................................................................15

6.1.1 Safety and security ......................................................................16

6.1.2 Security measures.........................................................................16

6.2 Process of Service Delivery and Capacity Design ............................17

6.2.1 Process of Service ........................................................................17

6.2.2 Capacity Design.............................................................................17

6.3 Layout Design Stra…….....................................................................19

6.3.1Office layout .................................................................................19

6.4Human Resource Personnel ..........................................................21

7. Marketing Plan……………………………………………………………..................25

7.1 Demand Analysis ...........................................................................25

7.2 Marketing Strategy ........................................................................26

7.3 Pricing str…………...........................................................................27

7.3.1 Promotional strategy ...................................................................28

7.4 Sales Strategy ...............................................................................30

8.Financial Plan....……………………………………..........................................32

8.1 Capital Structure .............................................................................32

8.2 Uses of Capital ................................................................................32

8.3 Pre-Operating Expenses .................................................................32

8.4 Service Revenue for the next five years .........................................32

8.5 Operating Expenses for the next five years ..................................33

8.6 Projected Income statement for next five years .........................34

8.7 Projected Cash flow Statement for the next five years ................35

8.8Statement of Retained Earnings for the next five years ................36

8.9 Projected Balance Sheet for the next five years...........................36

8.10 Profitability Ratios .....................................................................37

8.11 Computation of Net Present Value (NPV) .................................37

8.12 Computation of Payback Period ................................................37

1. Company Overview

1.1 Background of the Business

Rent A Maid Services plans to offer various types of household facilities
related services to target customers in Sargodha city through its head
office. The life in Sargodha and other cities is getting busy; people
spend less time in their home and more at work place. For these
reasons, city people are finding it difficult to manage timing between
household and working life. With this in mind, Rent A Maid Services
will provide the helping hand to those who are seeking helpers/maids
who can assist them in managing their domestic tasks. The clients can
use any or all services provided by the company as per their need. The
company will offer its services to everyone ranging from young
professionals, elderly, busy working mums, and to disabled people in
helping them to carryout day to day cleaning is being professionally
taken care of. All the staff of Rent A Maid Services will be checked
(Criminal Records Bureau).Rent A Maid Services is fully dedicated to
make sure that the requests of its clients will be carried out to the
highest standards. Services provided by the company allow people to
get rid of the burden of having to do all the household chores by
themselves. Rent A Maid Services will recruit and select female
candidates; new and experienced. They will be given orientation and
training to prepare them to suit the clients‟ requirements. The services
cover maids working as housemaids, caretakers, cooks, and nannies.

1.2. Basic Philosophy

1.2.1 Vision“

To become a top class service provider to households in Sargodha.

1.2.2 Mission
Provide excellent professional services & improve its position as a
leader in this field. Build & maintain a team motivated & committed
workforce with high work ethos; Use customer satisfaction & act as an
effective catalyst for making lives of people easier and comfortable.

1.2.3 Objectives

 To provide social and secured services to our customers

 To provide reliable and reasonable services all year round
 To maximization of wealth
 To expand the business to overall in Sargodha city in future.

1.2.4 Critical Success Factors

 Ensuring availability of adequate number of manpower across

different locations.
 Continuous improvement in quality, reduce turnover of
employees, reduce costs
 Increase Customer satisfaction
1.2.5 Company Values

Rent A Maid Services will demonstrate its values through its decisions,
actions and service it provides. The company believes putting values
into practices creates long term benefits for customers, employees and
the community at large

 Customer satisfaction will be the first priority which will be

achieved through customer oriented services.
 Appreciate suggestions and recommendations given by customers
and employees
 Regularly seek feedback from customers and improve service
accordingly
 All the employees can work with dignity and have gainful
employment

2. BUSINESS ENVIRONMENT ANALYSIS

2.1 Industry Analysis
For the industry analysis Kathmandu Enterprise Pvt. Ltd has
choose Michael Porter‟ industry forces model. The five forces are
threat of new entrants, bargaining power of customers,
bargaining power of suppliers, threat of substitutes, and
competitive rivalry within the industry. Using these forces
Kathmandu Enterprises found its business in the following scale.
Porters 5 forces Strong Moderate Weak
Threat of new ✔
entrants
Bargaining ✔
power of
customer
Bargaining ✔
power of
supplier
Threat ✔
of substitutes
Competitive ✔
rivalry within
the industry
Competitive Rivalry:
The level of competition in the market is expected to be moderate
due to huge market and ability of each firm to differentiate its
services.

Threat of New Entrants:

In present situation there are only informal groups providing the
service but seeing the profit making opportunity it is expected
that there will been trance of huge number of companies trying to
duplicate business plan of Rent A Maid Services.
Threat of Substitutes:
There are few services that are of close substitute to the service
provided by the company. Laundry and Dry Cleaners companies
are the major substitutes for cloth washing but these are
expensive compared to companies service. So the threat of
substitutes is moderate.
Bargaining Power of Supplier:
For Part time maids the suppliers will have weak bargaining power
since the company can directly negotiate with potential maids
eliminating suppliers‟ role. Hence they will have weak bargaining
power.
Bargaining Power of Customer:
The ability to bargain for the price and quality in the present
period will be high of customers because customers can directly
negotiate with maids, so their bargaining power of customers are
strong.
2.2 SWOT ANALYSIS
SWOT analysis helps to give the clear picture of the effectiveness
of the company strategies. For every marketing plan of the
company, the marketer needs to see the service strength,
weakness, opportunity and threat.

2.2.1 Analysis of Rent A Maid services

Strength
The Managing Director has experience in the field of marketing;
finance will be looked after by well experienced officer. The
company will provide quality service within economical price
range. The service process is customer oriented and will have
good database of employees. Strength will be the consistency in
the quality of the service which creates the loyalty among the
targeted customers. Location of the company makes it accessible
to both employees and customers.
Weakness
The company‟s management team does not have prior
experience in this field. It does not have established connection
with dispersed individual maids in the Sargodha . It lacks better
technology to maintain the record of employees and transactions.
Opportunity
The changing lifestyle of people and more inclination towards
nuclear family provides opportunity for huge demand for maid
service within Sargodha city. Also there is an increasing trend of
keeping a part time maid indicating the rising living standard
of people. By the time competitors will enter the market the
company will have penetrated in the major areas of Sargodha.
Moreover, so the company can get the first mover advantage.
 Threat
The existing businesses providing substitute services like laundry
and dry cleaners could pose a threat to the company. Also the
direct hiring of individual maids by households might reduce the
demand from the company and also customers will have high
bargaining power.
3. SERVICES PROVIDED
3.1 Services
The company will specialize in providing following services to
households
 House Cleaning
 Dish Washing
 Cloth Washing
 Cook
 Care Taker
1. Baby
2. Old Aged
3. Disabled

All the employees working as house cleaner, dish washer, cloth washer,
cook and caretaker will do only those tasks for which they are assigned
for and will be categorized under the „part time‟ workers and will have
to do all the household chores every day The customers will have to fill
a form mentioning their need and type of service they require. Then
the company will either search the maid or assign the existing maid to
the customers service. Customers can directly contact the company for
any complaints regarding the work of maids. Customers can
discontinue the service at any time. Company will provide service with
experienced maids and train them if necessary.
4. MARKET RESEARCH AND ANALYSIS

4.1 Primary Research

The objectives of survey of the residents of Sargodha city towards maid

service are to;

 Identify the potential size of the market

 Identify the target group for providing service profitably
 To know the specific needs and expectation from our service so
that their feedback would be incorporated to design our service.
 Determine the price range they will be willing to pay for each type
of service.
 To know the future of our service for upcoming years.
 To know our potential competitors

4.2 Sampling Plan

Sampling unit

Household

Sample size

60 household from urban area of Sargodha.

4.3 Research Instrument

The tool for primary data collection will be questionnaire which will be
distributed to 60 households from Sargodha.

4.4 Target Market

Rent A Maid services have segmented its market on the basis of:

Geographical

 Urban area of Sargodha city.

 Residential area (blocks, towns and colonies)

Demographic

 Family size i.e. nuclear family and joint family.

 Age and life-cycle stage i.e. elder people, disabled people and
young people
 Income ( middle and upper middle income group)

4.5 Data sources

The research aims to collect the primary data through personal

investigation .

4.6Survey Findings

1. Currently 38% of the household are in need of at least one type of

maid service.

2. other 62% household want many types of maid services like cloth
washing, cocking, baby takers etc.

4.7 Company strategy

1. Make plans and strategy to serve the existing 38% informal

maid service market with reliable, trustworthy and reasonable maid
service.

2. Target private service holders and business people.

3. Design service to better suit the need of households with
income ranging from 30000 and above.

5. Company Profile

5.1 Form of Business

The company will be operating in the service industry. The business

model is based on service revenue and direct sale of service. The
company will be financed using debt and equity. All the equity finance
will be contributed by the owners. It will be a partnership business. The
company will start in January28, 2017; the company will consist of
management professionals with background and expertise in the
related fields.

5.2 Organization Structure

 Our team members will be handle our business functions.

 Our M. D Hassan Gujjar qualification M.B.A with finance and his
duty will be handle overall management.
 IT specialist is a muzamil, qualification BS IT With 3 years
experience in related field, will be handle all activities related to
computers.
 Complaint officer is a rana tayyab qualification bachelors degree
at least 3years experience in relates field who will be deal any
complaint of our customers.
 Rabia is a human resource manger qualification MBA with HRM
will be deal with employees.
 Hina our market manager qualification MBA with Marketing who
will be deal with market and customers.
 Neelam is our account officer qualification B.com who manage
our business accounts.

Figure 1 : Organizational Structure Chart

Managing
Director

Human
Administrative
Resource
officer
officer

data base
Maids Security Guard
operator
5.3 Recruitment and Selection
There will be two types of staffs working for the company;
permanent and part time. A permanent staff consists of those
working in the management team. They will be hired for post like
administrative officer, human resource/customer relationship
officer, database operator. Newspaper advertisement and
personal referral will be used for recruitment of these staffs.
Selection will be done on the basis of review of qualification, prior
experience, soft skills (communication skills) and completion of
interview .Part time staffs consist of maids. Personal network,
referrals and agents will be used to recruit of these staffs.
Selection will be done on the basis of prior work experience and
no criminal records (all the maids will be checked for criminal
records by using police station records).
5.4 Remuneration and Compensation System
Permanent staffs will be paid on monthly basis and part time
staffs will be paid monthly with but on the basis of number of
days worked in a month. Any permanent staffs doing overtime
(OT) work will be given additional OT payment. Part time staffs
working double shift will be paid according to the salary fixed for
each type of service rendered.
5.5 Training and Retention Plan
Management team will be given training every year through
seminars and workshops related to their work. Education and
coaching on customer service will also be provided to
management staffs on periodic basis to handle and serve
customers. It will also cover managing and mobilizing resources
effectively and efficiently. In case of part time staffs, they will be
given 2 to 3 days of training on code of conduct and job related
tasks prior to assigning them to the work. Remuneration package
will be reviewed on an annual basis and compensation will be
provided to those who perform well in an annual performance
review to ensure talents and enthusiasts are motivated and
retained.
6. Operational Plan
6.1 Quality Management
The company will focus on continuous improvement of its service
to its valuable customers. For this the company‟s quality service
to its customers can be defined in
terms of:
 Reliability
Our service will be reliable in terms of consistency in the
service provided to customers. For this the company plans to
focus on following vital aspects:
 Households with be provided with new maid within three
days of leaving by the prior maid.
 Company will take full responsibility of its maids and willing
to compensate for any damages done by maids.
  Only trained maids will be assigned for service to clients.
Training will be given on both vocational (if needed) and
moral aspects.
 Accessible

Company will be located in area where prospective clients and staffs

can easily reach the office. For this the company has chosen university
road area. This will help company in providing quality service in
following ways:

 Customers will not have difficulty in finding the office.

 The office building is situated near the main road with good
infrastructure.
 Office building has space (room) for expansion. This will help to
setup additional departments to better cater service to clients in
future

6.1.1 Safety and security

This is the most vital area where the company will focus. The company
will be guided by its efforts to cover all the aspects of safety of its
customers. I believe the business model depends on how well and
safely the company will provide services with staffs with good moral,
behavior and with no criminal records. All the staff of Rent A Maid
Services will be checked by police records.

6.1.2 Security measures

 All the staffs will be registered with the company, their criminal
records will be checked with Criminal Records Bureau and
company will take responsibility of any immoral activities of staffs.
The well-being and security of the customers will be the
 company‟s top priority. This is especially vital for image
reputation building of the company.

6.2 Process of Service Delivery and Capacity Design

6.2.1 Process of Service Delivery
The company will follow the following procedure in delivering the
service to its valuable customers:
 The prospective customer will enquiry about the services
provided by the company
 The enquiry will be handled by the customer relationship officer
 Customers will visit the company office and talk with customer
relationship officer

 Customer will fill a form mentioning the type of service they need
and the timings.

6.2.2Capacity design
Capacity Plan for the next five years
Years House Cloth Dish cook Care taker
cleaners washer washer
1 8 8 8 10 7
2 12 12 12 15 10
3 18 18 18 22 15
4 27 27 27 33 22
5 40 40 40 49 33

6.3 Layout Design Strategy

6.3.1 Office layout
The office layout in the case of Rent A Maid Services is not as
important to other service providers because we cater our customers
outside our office premises .However, the company will have
comfortable furnishings and reasonable ambience in order to attract all
the visiting clients and create good working environment. Rent A Maid
Services will use a rented house of approximately 5 rooms from where
to conduct business operations.
The company‟s layout consists of following areas:

 Managing Director‟sRoom
 Administrative/ Account Officer‟s Room( with database
operator‟s cabin)

 Human Resource / Customer Relationship Officer‟s Room

 Maids‟ Room
 Security Guard Room
6.4.Human Resource Personnel
Total number of staffs and their salary
Position No of staff Expected salary
Managing director 1 20000
Account officer 1 15000
Human resource 1 20000
officer
IT specialist 1 8000
Security guard 1 7500
House cleaner 8 2100
Dish washer 8 2200
Clothe washer 10 2100
Cook 9 2500
Care taker 7 3200
Total 47 82600

Work Schedule of Maids

Shift/type Start timing End timing
Regular 6am 9am
Part time 10am 3pm

Shift 1/ regular time maids:

It will consist of cook, dish washer, house cleaner. They will work for
three hours a day.
Shift 2/ Part time maids:
It consists of cloth washer and care taker. They will work for five hours
a day.
Rent A Maid Services will operate throughout a week. Maids can take
leave for up to 4 days a month by giving prior notice to management.

7. Marketing Plan
7.1 Demand Analysis
The demand for maid service is increasing. The market survey
conducted showed that38% of the households need maid service in
Sargodha. With this in mind, the company plans to increase the number
of maids by 50% of previous year number every year. The market size is
large but supply is less and there are only informal groups providing
such service in Sargodha and people want a safe and reliable service
from private company. Therefore there is huge opportunity in this
sector.
7.2 Marketing Strategy
The strategy company chooses depends upon the needs and
expectation of customers, competition in the industry, and other
external environmental factors.

Marketing strategy in different stages of PLC

Introduction stage
  Build buyer awareness and entering slowly towards other stages
of buyer readiness stages.
 Price of service kept constant for some years
 Focus on inexpensive & effective marketing strategy-referrals,
newsletters

Growth stage

 Number of household‟s starts to increase at higher rate

 Company will increase price of service to adjust demand pull and
supply push inflation in later years
 Focus will be to train employees.
 Advertising/Promotion goal will shift from awareness to
convincing and encouraging use of service
Maturity
 Retaining existing customers
 Reducing price according to competition and demand
 Aggressive sales promotions
 Strategic alliance, if possible.

Decline

 Reviewing sales, market share, and cost and profit trends on a

real time basis and designing counter strategy
 Maintain brand image
 Reposition or revive brand to move back to growth stage, look for
new segments
7.3 Pricing strategy
The pricing objective of Rent A Maid Services is to provide service at
low cost without compromising on quality service. It wants to establish
as low cost leader in the industry. The price per type of service is set on
the basis of cost plus profit margin.

Service Rate per month for each year

Services Increased 5% 5% 10% 10%
facilities 0%
1st year 2nd year 3rd year 4th year 5th year

House 3800 3990 4190 4609 5069

cleaner
Dish 4200 4410 4630 5093 5602
washer
Cloth 4000 4200 4410 4851 5336
washer
Cooking 6500 6825 7166 7883 8671
Care taker 7000 7350 7717 8489 9338
rate increases by 5% in 2nd and 3rd year and then by 10% thereafter
annually.
7.3.1 Promotional strategy
Rent A Maid Services will promote its services using different
promotional tools. The company will give advertisement in the local
newspaper; will distribute flyers to potential customers and greeting
cards to existing customers. Local FM station and TV Channels (Scroll
ads.) will be used for electronic advertisement. Informal media like
word of mouth and referrals too will be used.
Marketing program and expenses
Items 1st year 2nd year 3rd year 4th year 5th year

Business card 4500 4950 5445 5990 6588

Flyers 3000 3300 3630 3993 4392
Greeting card 4250 4675 5143 5657 6222
Print advertising 45000 49500 54450 59895 65885
Electronic media (FM; 40 sec.) 21600 23760 26136 28750 36625
Electronic Media (TV Scroll Ads.) 65900 72490 79739 87713 96484
Other media 5750 6325 6958 7653 8419
Total 150000 165000 181500 199650 219615

7.4 Sales Strategy

Service Revenue Forecast for next five years

Years House Dish Cloth cooking Care Total

cleaning washing washing taking service
revenue

2017 364,800 403,200 480,000 3,265,632 588,000 2,538,000

2018 574,560 635,040 756,000 1,146,600 882,000 3,994,200

2019 905,040 1,000,080 1,217,160 1,805,832 1,389,060 6,317,172

2020 1,493,316 1,650,132 1,979,208 3,027,072 2,241,096 10,390,824

2021 2,433,120 2,688,960 3,265,632 4,994,496 3,697,848 17,080,056

 8. Financial Plan

8.1 Capital Structure

Source Amount Ratio

Self-contributed capital 1000000 50%
Loan @13% for 6 years 1000000 50%
Total start-up capital 2000000 100%
8.2 Uses of Capital

Particulars Amount
Purchase of fixed assets 556,500
Preliminary Expenses 55,000
Working capital (50% of operating expenses) 1,388,500
Total start-up capital 2000000
8.3 Pre-Operating Expenses
Particulars Amount
Feasibility Study 5000
Registration Charges 15000
Transportation 5000
Telephone Line 10000
Training Expenses 20000
total 55000

8.4 Service Revenue for the next five years

Service Increased % 57 57 64 64
revenue Year 1 Year 2 Year 3 Year 4 Year 5
2538000 3994200 6317172 10390824 17080056

8.5 Operating Expenses for the next five years

particulars 2017 2018 2019 2020 2021
Staff salary 846000 930600 1023660 1126026 1238629

Maid salary 1203600 1981320 3284424 5396820 8866704

Depreciation 111300 111300 111300 111300 111300
Rent 250000 275000 302500 332750 366025
Audit /legal charges 5000 5000 5000 10000 10000
Marketing expenses 150000 165000 181500 199650 219615
Electricity 20000 20000 20000 20000 20000
Telephone expense 48000 52800 58080 63888 70277
Office supplies 25000 27500 30250 33275 36602
Training expenses 20000 22000 24200 26620 29282
Miscellaneous expenses 10000 11000 12100 13310 14641
Preliminary expenses written 55000
off
Total 2743900 3601520 5053014 7333639 10983075
8.6 Projected Income statement for next five years

years

Particular 2017 2018 2019 2020 2021

Service Revenue

house cleaning 364800 574560 905040 1493316 2433120

Dish washing 403200 635040 1000080 1650132 2688960
Cloth washing 480000 756000 1217160 1979208 3265632
cooking 702000 1146600 1805832 3027072 4994496
Care taking 588000 882000 1389060 2241096 3697848
Total service 2538000 3994200 6317172 10390824 17080056
revenue
Operating expense
Staff salary 846000 930600 1023660 1126026 1238629
Maid salary 1203600 1981320 3284424 5396820 8866704
Depreciation 111300 111300 111320 111300 111300
Rent 250000 275000 302500 332750 366025
Audit/legal charges 5000 5000 5000 10000 10000
Marketing expenses 150000 165000 181500 199650 219615
Electricity 20000 20000 20000 20000 20000
 Telephone expenses 48000 52800 58080 63888 70277
Office supplies 25000 27500 30250 33275 36602
Training expenses 20000 22000 24200 26620 29282
Miscellaneous 10000 11000 12100 13310 14641
expenses
Preliminary 55000
expenses
Total Operating Exp 2743900 3601520 5053014 7333639 10983075
enses
EBIT (205,900) 392680 1264158 3057185 6096981
Add: Interest on 50000 30000 60000 160000
investment
Less: Interest 156000 137256 116075 92141 65095
EBT (361,900) 305424 1178083 3025044 6191886
Less: Tax @25% 76356 294521 756261 1547971
Net Income/(Loss) 229068 883562 2268783 4643915
(361,900)

8.7 Projected Cash flow Statement for the next five years
years

particulars Pre 2017 2018 2019 2020 2021

operating
Cash flow
Beginning 1388500 548715 426154 1208945
balance
Equity 1000000
Loan 1000000
Interest on 50000 30000 160000
investment
Revenue 2538000 3994200 6317172 10390824 17080056
Total cash 2000000 3926500 4592915 6773326 11087730 18449001
inflow
Cash outflow
Fixed Asset 556500
Principal and 300185 300185 300185 300185 300185
interest
payment
Operating
expense
Staff salary 846000 930600 1023660 1126026 1238629
Maid salary 1203600 1981320 3284424 5396820 8866704
Depreciation 111300 111300 111320 111300 111300
Rent 250000 275000 302500 332750 366025
Audit/legal 5000 5000 5000 10000 10000
charges
Marketing 150000 165000 181500 199650 219615
expenses
Electricity 20000 20000 20000 20000 20000
Telephone 48000 52800 58080 63888 70277
expenses
Office supplies 25000 27500 30250 33275 36602
Training 20000 22000 24200 26620 29282
expenses
Miscellaneous 10000 11000 12100 13310 14641
expenses
Preliminary 55000
expenses
Tax paid 76,356 294521 756261 1547971

Total cash 611500 2877785 3866761 5536420 8278785 12719931

outflow (B)
 Surplus/Defic 1388500 1048715 726154 1236906 2808945 5729070
it (A-B)
investment 500000 300000 600000 1600000 3000000
Ending cash 1388500 548715 426154 636906 1208945 2729070
balance

8.8Statement of Retained Earnings for the next five years

Particulars 1st year 2nd year 3rd year 4th year 5th year
Beginning (361,900) (132,832) 750,730 3,019,513
balance
Add; (361,900) 229,068 883,562 2,268,783 4,643,915
profit for
the period
Ending (361,900) (132,832) (132,832) 3,019,513 7,663,428
balance

8.9 Projected Balance Sheet for the next five years

Particulars year

Asset Pre 2017 2018 2019 2020 2021

operating
Current
asset
Cash 1388500 548715 426154 636906 1208945 2729070
Investment 500000 800000 1400000 3000000 6000000
Total 1388500 1048715 1226154 2036906 4208945 8729070
current
asset
Fixed asset
furniture 368500 368500 294800 221100 147400 73700
Equipment 188000 188000 150400 112800 75200 37600
Fixed asset 611500 556500 445200 333900 222600 111300
Less; 111300 103930 103930 103930 111300
depreciation
Net fixed 611500 445200 333900 222600 111300 0
asset
Preliminary 55000
expense
Total asset 2000000 1493915 1560054 2259506 4320245 8729070
Equity and
liabilities
Shareholder
equity
Equity 1000000 1000000 1000000 1000000 1000000 1000000
Retained (361,900) (132,832) 750730 3019513 7663428
earning
Total share 1000000 638100 867168 1750730 4019513 8663428
holder
equity
Long term
liabilities
Loan 1000000 855815 692886 508776 300732 65642
Total long 1000000 855815 692886 508776 300732 65642
term
liabilities
Total equity 2000000 1493915 1560054 2259506 4320245 8729070
and
liabilities

8.10 Profitability Ratios

year 2017 2018 2019 2020 2021

Net profit margin (% (14.25) 5.74 13.98 21.83 27.19
ROA (%) (24.22) 14.68 39.1 52.51 53.2
ROE (82.60) 34.33 56.97 59.39 54.87

Analysis:

The company will have negative profit margin for the initial year.
However, from second year it will increase by about 8% annually.
Return on assets is high in the beginning year. It will increase by 24.42%
in 2ndyear and by 13.41 % in 3rd year but in third year it will increase at
minimum rate. ROE is negative in the first year due to huge loss in year
1,it will increase positively from 2nd year due to increase in profits.

8.11 Computation of Net Present Value (NPV)

Year Cash flow PV Factor @ 13% Present Value (PV)

1 548715 0.8849 485557.90
2 426154 0.7831 333721.19
3 636906 0.6930 441375.85
4 1208945 0.6133 741445.96
5 2729070 0.5427 1481066.28
Total Present Value 3483167.18
Less: NCO 2000000

NPV 1483167.18
Analysis:

Since the NPV is positive, the business is feasible and lucrative.

8.12 Computation of Payback Period

Year Cash flow Cumulative cash flow

0 -2000000 -2000000
1 548715 -2548715
2 426154 -2122561
3 636906 1485655
4 1208945 -276710
5 2729070 2452360

1. Market Research

1.1 Questionnaire Survey On Peoples’ attitude towards Maid Service

General information

Name: …………………………Gender…………Age……….. No. of family

members……Address……………………………….Occupation………………

Monthly Income Rs………………..

Specific information
1.

Do you have helper/maid to do household chores?

a. Yes b. No

If, yes, then what kind of tasks does your helper (maid) do
(multipleResponse)

a. House Cleaning b. Dish Washing c. Cloth Washing

d. Cooking e. Care Taking f. All above

2.

Is your maid part time or full time?

a. Part time b. Full time

3.How much do you pay for your part time/ full time maid?

a. Part time: Rs ……………….. b. Full time: Rs ……………………

4 .Is it getting difficult to get maid in Sargodha ?

a. Yes b. No

5. Would you be willing to take maid service from a private company?

a. Yes b. No

6.What advantages/ disadvantages you think would be in taking a maid

service from private company?

………………………………………………………………………………………………………
…………………………………………………………………………………………………….

7.For what purpose you need a maid service the most? (single
response)

a. House Cleaning b. Dish Washing

c. Cloth Washing d. Cooking

e. Care Taking f. Others (Please Specify)