Business Plan On Maid Service

Business Plan
On
Kathmandu Enterprise Pvt. Ltd.
Submitted to:
Mr. Ashish Tiwari
Mr. Bishal Shrestha
Mr. Pradeep Rajopadhyay
Submitted by:
Sandarva Pal
July 23, 2012

Business Plan: Kathmandu Enterprise Pvt. Ltd.
Acknowledgement
My sincere thanks goes to the faculties of Ace Institute of Management, Mr. Ashish
Tiwari, Mr. Bishal Shrestha and Mr. Pradeep Rajopadhyay 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
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Executive Summary
Business venture aims to provide maid facilities for busy household of urban areas of
Kathmandu valley. The venture will be conducted under the management of Kathmandu
Enterprise Pvt. Ltd. This plan will serve as the financial and operational outline and plan
for the first five years of the venture‟s operation. The company will obtain a loan through
commercial bank in the amount of 12, 00,000. Additionally, remaining amount of Rs. 8,
00,000 will be financed by the founder.
The concept of Kathmandu Enterprise is to provide maid facilities such cooking, cloth
washing, dish washing, house cleaning, baby and old age care to the households in
Kathmandu valley. 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 2013. The office will be
located in Koteshwor, Kathmandu.
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 to
Kathmandu Enterprise Pvt. Ltd. and its business concept.
The market survey conducted shows the business plan to be feasible and also financial
projections for Kathmandu Enterprise Pvt. Ltd. show the potential for success and
growth in the existing market.
Total initial capital investment will be Rs. 20, 00,000 with 40 % equity contribution and
60% loan.
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Table of Contents
Acknowledgement........................................................................................................................ i
Executive Summary .................................................................................................................... ii
1. Company Overview ....................................................................................................... 1
1.1 Background of the Business ............................................................................................. 1
1.2. Basic Philosophy ............................................................................................................. 2
1.2.1 Vision ......................................................................................................................... 2
1.2.2 Mission ....................................................................................................................... 2
1.2.3 Objectives .................................................................................................................. 2
1.2.4 Critical Success Factors ............................................................................................. 2
1.2.5 Company Values ........................................................................................................ 2
1.3 Registration ...................................................................................................................... 3
2. BUSINESS ENVIRONMENT ANALYSIS ........................................................................ 4
2.1 Industry Analysis .............................................................................................................. 4
2.2 SWOT ANALYSIS ............................................................................................................ 5
2.2.1 Analysis of Kathmandu Enterprises Pvt. Ltd. .............................................................. 5
2.2.2 Analysis of Competitors.............................................................................................. 6
2.3 PEST Analysis .................................................................................................................. 7
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
4.4 Target Market ..................................................................................................................10
4.5 Data sources ...................................................................................................................10
4.6 Survey Findings ...............................................................................................................10
4.7 Analysis ...........................................................................................................................11
4.8 Company strategy ...........................................................................................................11
5. Company Profile ...........................................................................................................12
5.1 Form of Business.............................................................................................................12
5.2 Legal Status ....................................................................................................................12
5.3Organization Structure ......................................................................................................12
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5.4 Recruitment and Selection ...............................................................................................14

5.5 Remuneration and Compensation System.......................................................................14
5.6 Training and Retention Plan ............................................................................................14
6. Operational Plan ...........................................................................................................15
6.1 Quality Management .......................................................................................................15
6.1.1 Safety and security....................................................................................................16
6.1.2 Training .....................................................................................................................16
6.1.3 Securitymeasures .....................................................................................................16
6.2 Process of Service Delivery and Capacity Design ...........................................................17
6.2.1 Process of Service Delivery ......................................................................................17
6.2.2 Capacity Design ........................................................................................................17
6.3 Location strategy .............................................................................................................18
6.3.1 Site Selection ............................................................................................................18
6.4 Layout Design Strategy ...................................................................................................19
6.4.1 Office layout ..............................................................................................................19
6.5 Human Resource Plan and Job Design ...........................................................................20
6.5.1Job Duties and Responsibilities..................................................................................20
6.5.2Human Resource Personnel ......................................................................................21
6.6Management of Demand and Work Load .........................................................................23
6.7 Labor Supply Management ..............................................................................................23
6.8Operation Schedule ..........................................................................................................23
6.9 Procurement ....................................................................................................................24
7. Marketing Plan ..............................................................................................................25
7.1 Demand Analysis.............................................................................................................25
7.2 Marketing Strategy ..........................................................................................................26
7.3 Marketing Mix Strategy ....................................................................................................27
7.3.1 Service Strategy ........................................................................................................27
7.3.2 Pricing strategy .........................................................................................................27
7.3.3 Promotional strategy .................................................................................................28
7.3.4 Positioning Strategy ..................................................................................................30
7.3.5 Partnering strategy ....................................................................................................30
7.4 Growth rate......................................................................................................................30
7.5 Profitability .......................................................................................................................30
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7.6 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
8.2 Computation of Payback Period ......................................................................................37
9. Critical Risk and Contingencies ..................................................................................38
9.1 Internal risk ......................................................................................................................38
9.2 External risk .....................................................................................................................38
10. Schedules and Milestones ...........................................................................................39
11. Future Plan and Exit Strategy ......................................................................................41
11.1 Future plan ....................................................................................................................41
11.2 Exit strategy ...................................................................................................................41
APPENDIX................................................................................................................................42
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LIST OF TABLES
Table 1 : Industry Analysis ........................................................................................................................ 4
Table 2 : Capacity Plan for the next five years .................................................................................... 18
Table 3 : Total number of staffs and their salary ................................................................................. 21
Table 4 : Qualification and skills of staffs and management team ................................................... 22
Table 5 : Work Schedule of Maids ......................................................................................................... 22
Table 6 : Kathmandu metropolitan: Population, household size....................................................... 25
Table 7 : Service Rate per month for each year ................................................................................ 28
Table 8 : Marketing program and expenses ........................................................................................ 28
Table 9 : Service Revenue Forecast for next five years .................................................................... 31
LIST OF FIGURES
Figure 1 : Organizational Structure Chart ........................................................................................... 13
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1. Company Overview
1.1 Background of the Business

Kathmandu Enterprise Pvt. Ltd plans to offer various types of household chores related
services to target customers in Kathmandu through its head office. The life in
Kathmandu and other cities is getting busy; people spend less time in their home and
more at work place. Also the trend of nuclear family is catching on in city areas.For
these reasons, city people are finding it difficult to manage timing between household
chores and working life. With this in mind, Kathmandu Enterprise Pvt. Ltd 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 offerits 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
Kathmandu Enterprises Pvt. Ltd will be CRB checked (Criminal Records Bureau).
Kathmandu Enterprises Pvt. Ltd 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. Kathmandu Enterprises Pvt. Ltd 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, care
takers, cooks, and nannies.
All the maids will have to work under the terms and conditions of Kathmandu Enterprise
Pvt. Ltd. They will represent the company and the company will be responsible for the
work of maids. Salaries and benefits will be given by the company as per the contract.
The current scenario shows an opportunity for Kathmandu Enterprise to provide this
kind of services to households in Kathmandu Valley
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1.2. Basic Philosophy
1.2.1 Vision
“To become a top class service provider to households in Kathmandu”
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 wide range of services related to domestic chores
 To provide reliable and reasonable services all year round
 To create congenial working environment where all employees rights are
protected
 To work towards fair competition
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

Kathmandu Enterprises 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
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 Abide with rules and regulations of the country
1.3 Registration
In order to register the company under the name of “Kathmandu Enterprise Pvt. Ltd”
some of the legal formalities are done which are as follows:
 An application form is submitted along with Rs. 5 stamp at the office of the
registrar which is situated at Tripureshwor. Besides this citizenship certificate of
owner and alteast 5 people and the company register stamp is provided to the
office of the registrar
 Once the company is registered the next step is to take PAN number from the In
Land Revenue Department which is situated at Lazimpat. For this necessary
documents are : Application Form, copy of the citizenship certificate of the
partners, copy of the company/firm registration certificate, two passport size
photo of the partners, hand drawn sketch of the business location
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2. BUSINESS ENVIRONMENT ANALYSIS
2.1 Industry Analysis

For the industry analysis Kathmandu Enterprise Pvt. Ltd has choose Michael Porter‟s
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 point scale.
Table 1 : Industry Analysis
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 be
entrance of huge number of companies trying to duplicate business plan of Kathmandu
Enterprises.
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Threat of Substitutes: There arefew 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 and old age homes and Kindergarten for Care taker
service but these are expensive compared to company‟s 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. Also with the increase in number of new
companies providing similar services will further make their bargaining power of
customers 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 Kathmandu Enterprises Pvt. Ltd.

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
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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 Kathmandu. 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 Kathmandu. 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 Kathmandu. Moreover, so the company can get the first mover
advantage.
Threat
The existing businesses providing substitute services like laundry and dry cleaners,
cook services and old age home centers and Kindergarten 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.
2.2.2 Analysis of Competitors

In Price/Quality dimension, Kathmandu Enterprise Pvt. Ltd will be preferable than the
competitor because it is specialized in quality service. Direct competitors of Kathmandu
Enterprise Pvt. Ltd are those individuals who are involved in providing house cleaning
services, dish washing services, cloth washing services, cooking services, care taker
services individually. There are also some companies which specialize in providing
these services but only provide one or two segments of services. The indirect
competitors will be laundry and dry cleaners companiesin the market.
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2.3 PEST Analysis

The following general environmental analysis has been made from the survey.
-Political/ Legal: Political uncertainty and instability of government with the collapse
of constituent assembly can negatively affect the business plan. But favorable business
scenario for investment has increased after the agreement of the Peace process and
formal end of civil war.
The proposed company should be registered in the Company Office of Registrar and
the trademark should be taken for the product. The company should be oblique to the
legal rules and regulations. Legal rules and regulation remains changing, rules such as
tax, labor union acts can reduce the earning of company.
-Economic:With the liberalization of economy and commitment of government towards

free market economy. There has been rise in both domestic and foreign investment.
Financial sector and capital market has shown positive indication. This creates a
favorable economic environment to invest at this time.
-Socio-Cultural:The country is seeing the changing family structure and rising middle
and upper middle class. Women‟s participation in the job market and ageing population
is another social changes happening in the country. This can be an opportunity for the
company to commence a business.
-Technology:The advancement in the ICT has given businesses to better manage its
customer profile, transactions and relationships with key stakeholders. Nepalese
companies have realized the importance and power of having updated technology and
have focused on Product innovations, applications of knowledge, new communication
technologies. Kathmandu Enterprises can benefit from this rapid change in technology
as long as the cost of new technology is reasonable.
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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
o Baby
o Old Aged
o Disabled
All the employees working as house cleaner, dish washer, cloth washer, cook and care
taker 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 everyday
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
customer‟s 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.
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4. MARKET RESEARCH AND ANALYSIS
4.1 Primary Research

The objectives of survey of the residents of Kathmandu valley 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 2 wards of KTM Valley
 Sampling procedure
 Quota with Convenience sampling method
4.3 Research Instrument

The tool for primary data collection will be questionnaire which will be distributed to 60
households from 2 wards of Kathmandu Valley.
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4.4 Target Market

Kathmandu Enterprise have segmented its market on the basis of:
Geographical
 Kathmandu Valley
 Residential area (private homes, apartments 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 uppermiddle income group)
4.5 Data sources

The research aims to collect the primary data. It will also use secondary databy
accessing Central Bureau of Statistics (CBS) report to get relevant data on household
survey 2012.
4.6 Survey Findings

1. Currently 38%* of the household are in need of atleast one type of maid service;
it is high among household living in apartments (46%) whereas 30% among
people living in single homes.
2. Age group of 27-59 wish to have maid service the most (77.77%) followed by age
group of 60 and above (16.66%), it is low among age group of 16-26 (5.55%)
3. Family with 3-4 members are in need of maid service the most (50%) followed by
5-6 (32.35%).
4. In occupation, private service holders are in need of maid service the most (50%)
followed by businesspersons (32.35%).
5. People with monthly income ranging 13000 to 26000 are most willing to have a
maid service
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4.7 Analysis
The survey of 60 households from two wards showed that 38% of the households need
maid service. This shows that about 3,43,891 households/families need maid service
(40,00,000/4.42=904977*38%=343891; population of Kathmandu is about 4 million and
average household size taken 4.42 from ward no. 36 of table no. 6)
The demand for the service is expected to increase annually as the survey shows high
number of working women and nuclear family with two income households.
The survey might not be representative because only 2 wards was taken as sample
from 36 total wards in Kathmandu but the statistical tools used to analyze makes it
statistically valid.
4.8 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 apartments which are lucrative segment.
3. Target age group between 27-59 and 60 above
4. Target private service holders and business people.
5. Design service to better suit the need of households with income ranging from
13000-17000, 18000-22000, 22000-26000 and above 26000.
*Appendix: 1.13
Primary source:
 Questionnaire Survey on “Peoples‟ attitude towards maid service”, Appendix: 1.1

 Quota with Convenience sampling method
 Researcher administered survey
Secondary Source:
Central Bureau of Statistics (CBS): www.cbs.gov.np
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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 owner (Sandarva Pal). It will be a
sole partnership business. The company will start in January 1, 2013; the company will
consist of management professionals with background and expertise in the related
fields.
5.2 Legal Status

The company will be registered as private limited company under the company Act
2063 by fulfilling all the legal and administrative aspects outlined by the company Act
and other administrative requirement. The owners will be personally liable for any
amount owed by the company during the transaction of the business. It will be guided
by company act and other rules and laws of the government of Nepal.
5.3Organization Structure
I, Sandarva Pal, will be the major decision maker in the overall management of the
company. I will be responsible for the overview of the overall business. I will be working
as managing director of the company. So I will be responsible for planning, goal setting,
strategy formulation and implementation and manage daily operation of the company.
The company will hire two officers; Administrative officer and Human Resource/
Customer Relationship Officer. Both the managers will be given full authority to manage
and operate their respective divisions. All are independent to formulate plans and
strategy for their divisions. However, final approval will be made by managing director
Besides maids the total number of staffs at the initial years of operation will be four. All
the staffs will be made permanent within two months of work in the organization.
The detailed organizational structure of the company is as follows:
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Figure 1 : Organizational Structure Chart
Managing Director
Administrative/ Human Resource /

Account Officer Customer Relationship
Officer
Database
Operator
Maids Security
Guard
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5.4 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 Criminal
Records Bureau (CRB))
5.5 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.
5.6 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.
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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:
 Code of conduct will be developed by the company and strictly

implemented. This will prevent any unethical activities at the workplace and
assures customers trustworthy maids at their service.
 Prepare a checklist containing the type and quality of work done, time of
arrival and departure from client house which would be filled by the client
and his/her maid at the end of every month. Any inconsistency between
client and maid‟s checklist response will be discussed. This will help to
monitor the work performance of the maids.
 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 Koteshwor area. This will help
company in providing quality service in following ways:
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 This site location provides the best proximity to customers using public
transportation.
 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.
 Courtesy
The values of the company will guide its staffs to serve the customers with
hardwork, sincerity, loyalty and devotion.
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 Kathmandu
Enterprise Pvt. Ltd will be CRB checked with (Criminal Records Bureau)
6.1.2 Training
 Provide one month training prior to formal operation of the service. The training
will focus on teaching maids about ways to conduct activities in an effective way.
 Provide vocational training to upgrade skills of staffs
 Training will highlight on need and importance of providing reliable and
satisfactory services.
6.1.3 Securitymeasures
 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.
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The well-being and security of the customers will be the company‟s top priority. This is
especially vital for image /reputation buildingof 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.
 Appropriate employee (maid) will be selected and given needed training and
information on the need of the customer.
 Enter into contract with the customer regarding the terms and conditions of
employment, payment procedure, benefits to maids and termination of service.
6.2.2 Capacity Design

The marketing survey entitled “Peoples attitude towards maid service” was conducted
among households of Kathmandu Valley. 60 households from two wards of Kathmandu
were taken as sample. Itshowed that 38%* of the households of Kathmandu Valley
need maid service.**Age group of 27-59 needs maid service the most followed by age
group of 60 and above and family with 3-4 members*** are in need of maid service the
most. With this survey in mind, the company will provide five types of services from the
beginning of its operations. However,due to manpower and capital constraints the
company will commence its service with only fraction of the actual demand for the
service by the households.
 Questionnaire Survey on “Peoples‟” attitude towards maid service”.
*Appendix: 1.13:, **Appendix:1.8, ***Appendix: 1.9
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From the second year the company plans to increase the number of employees by 50%
of the previous number.
Table 2 : Capacity Plan for the next five years
Year House Cleaner Cloth Washer Dish Washer Cook Care Taker
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 Location strategy
6.3.1 Site Selection

Being a service provider the location strategy will focus on revenue maximization. The
higher contact with clients means higher possibility of turning prospective clients into
actual clients. So the company has given careful consideration while selecting the site
location.
Factors considered while selecting the site

 Office site should be located in the area easily accessible by clients and staffs
(maids) i.e. transportation facilities
 The site should provide proximity to target business area
 The office site should be located with room for future expansion
 Office should be located on the ground or at least first floor
 Office should cover space not less than900 square feetand reasonable rental
charges.
Considering all the above factors, I have selected the office site inKoteshwor,
Kathmandu.This site location provides the best proximity to customers using public
transportation. Customers will not have difficulty in finding the office. Most importantly it
provides proximity to target business area (Koteshwor is one of the most populated
wards of Kathmandu). The office building is situated near the main road and has room
for expansion. The office space meets the requirement of 900 square feet for the office
setup.
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6.4 Layout Design Strategy
6.4.1 Office layout

The office layout in the case of Kathmandu enterprise 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.
Kathmandu enterprise 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‟s Room
 Administrative/ Account Officer‟s Room ( with database operator‟s cabin)
 Human Resource / Customer Relationship Officer‟s Room
 Maids‟ Room
 Security Guard Room
(Layout partition is shown on appendix: 5.1)
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6.5 Human Resource Plan and Job Design

Kathmandu Enterprise Pvt. Ltd will be owned, managed and run by me (Sandarva Pal)
as the head and managing director of the company. The company plans to have two
major divisions/departments i.e. Administrative and Human Resource (Customer
Relationship) department to smoothly operate its daily activities.
6.5.1Job Duties and Responsibilities

Managing Director: He will be responsible for the overall management of Kathmandu
Enterprises Pvt. Ltd. and will take the responsibility of the risk associated with the
implementation and operations of venture. Besides managing and supervision of the
daily activities he will also be responsible for handling marketing/promotional of the
company and its services.
Human Resource/ Customer Relationship Officer: He/She will be responsible for all
the activities related to human resources in the organization. Recruitment, selections,
development and training are some of the responsibility performed by Human Resource
officer.
He/ She will also be responsible for managing customer relationship. The duties to be
performed will include: handling potential customers enquiry and existing customers
complaints, search for new customers, profile customers‟ needs and maintain
communication with potential clients.
Administrative/Account Officer: Account Manager will be responsible for maintaining

accounting records of activities carried out by the company. His duty and responsibility
will be to maintain record of transactions, disburse salary and other expenses, check
inflow and outflow of materials and cash, prepare financial statements and make
forecasts of costs, revenue and profits.
Database Operator: He will be responsible for recording, maintaining, tabulating,

categorizing data on work appraisal of staffs, approving leave and adjustment of salary
and benefits. He will be responsible for the update and management of data, and
disseminate decision making information to officers and managing director. He will be
accountable to Administrative officer.
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6.5.2Human Resource Personnel

Table 3 : Total number of staffs and their salary
Position Number of Staffs Expected Salary (Rs.)
Managing Director 1 20,000
Administrative/Account 1 15,000
Officer
Human Resource/ 1 20,000
Customer Relationship
Officer
Database Operator 1 8000
Security Guard 1 7,500
House cleaner 8 2100
Dish washer 8 2200
Cloth washer 10 2100
Cook 9 2500
Care Taker 7 3200
Total
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Table 4 : Qualification and skills of staffs and management team
Position Qualifications
Managing Director MBA Degree with specialization on

finance and work experience in marketing
field
Administrative/Account Officer Bachelors Degree with atleast 3 years of
experience in related field
Human Resource/ Customer Bachelors Degree with atleast 3 years of
Relationship Officer experience
Database Operator Bachelor‟s Degree in IT
Maids -
Security Guard -
Table 5 : Work Schedule of Maids
Shift/type Starting Time -Ending Time Ending Time

1/Part time maids 6 am 9 am
2/ Part time maids 10 pm 3 pm
Shift 1/ Part 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.
Kathmandu Enterprises will operate throughout a week. Maids can take leave for up to
4 days a month by giving prior notice to management
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6.6Management of Demand and Work Load

Part time maid: Part time workers fall under shift 1& 2 of above work schedule.
Demand for shift 1 maids will be twice than that of shift 2 maids according to the survey.
Each maid in this category can also work in shift 2 if they are able and willing. Work in
shift 2 starts from 10 pm so company can allocate maids in shift 1 to shift 2 according to
the need. The company plans to allocate about 50% of its maids to shift 2 category
Currently, the demand for shift 2 category maids is quite low. Each maid will look after
single client‟s need. This is a category where special skills are needed. Some of the
maids in shift 2 will come from shift 1 so a single maid can work in two places in a day.
Remaining 50% of maid need in shift 2 category will hired
6.7 Labor Supply Management

Kathmandu Enterprise will use two sources for the supply of labor.
 Local Labor Supply: The requirement of personnel for the business will be fulfilled
by local labor market. The company will make use of informal channels like local
agents and also those individuals trying to find permanent job. Also it will vacancy
announcement in the appropriate media to attract the maids working in the
Kathmandu valley. It will also use informal channels to inform labor about the
employment opportunity. The company will recruit the best personnel from the
available market source.
6.8Operation Schedule
It is estimated to take about five months to carry out pre-operating activities. That
means starting from August 1 2012 the company will tentatively come into operations in
January1 2012.
Preparation for licencing

First step will be to trying to get licence to operate the business; this is expected to take
about 1 month. Documentation for licencing will take another two months. Licence
Approval is expected to take about three months
Preparation for site location
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Search and evaluation of the office site is expected to take about one month.
Finalization of site will take tentatively one month. Completion of architectural layout
design will be completed within one month. Complete layout in next one month.
Marketing/ Promotion
The company will conduct all the marketing and promotional activities throughout its
operational years. Also it will carry marketing activities for first one month prior to
operation and continue for following months.
Office Supplies
Evaluation of suppliers/Sellers, Selection and Purchase of office supplies will take about
three months
Human Resource
Recruitment and selection of employees will take about four months and one month for
training.
Service
Kathmandu Enterprise Pvt. Ltd will formally begin its operation from January 1, 2013.
(Operation Schedule is shown in Appendix)
6.9 Procurement
Furniture and fixtures will be bought from MD furniture wholesalers in Maharajgunj.
Equipments will be bought from Hirand Suppliers situated in Sundhara.
Computers will be bought from Yantra Computers located in Computer Bazar,

Putalisadak. Telephone sets will be bought from Mobile Centre situated in Pako, New
road. Office Supplies will be bought from Yukti Office Suppliers, Maharajgunj. All the
items will be bought on negotiations and bargaining, bidding will not be used.
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7. Marketing Plan
7.1 Demand Analysis

The demand for maid service is increasing. The market survey conducted showed that
38% of the households need maid service in Kathmandu. 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 Kathmandu and people want a safe and reliable service from
private company. Therefore there is huge opportunity in this sector.
The demand for the maid service is related to the changing demographic and
geographical factors. The following table shows the household size in different wards
of Kathmandu. It is a good indicator to identify the potential wards to target and do
marketing/ promotional activities:
Table 6 : Kathmandu metropolitan: Population, household size
Ward HH Ward
Population Population HH size
No. size no
1 8464 5.01 19 7400 5.01
2 13655 4.27 20 8240 4.84
3 20782 4.55 21 12369 4.93
4 29539 4.36 22 5840 5.79
5 15340 4.29 23 8289 4.85
6 39316 4.48 24 5272 5.7
7 39530 4.24 25 4310 5.79
8 9434 4.36 26 3764 4.97
9 29263 4.36 27 7789 5.05
10 25977 4.21 28 5462 5.02
11 15244 4.37 29 24543 4.4
12 10313 4.95 30 9896 4.85
13 29721 4.62 31 14502 4.46
14 34488 4.4 32 24355 4.28
15 32441 4.36 33 21597 4.26
16 45450 4.21 34 46136 4.18
17 19876 4.36 35 35184 4.04
18 8065 4.66 36 671846 4.42
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The above table shows the most attractive ward to target and serve is ward number 36
which has the highest population i.e. 6, 71,846. However, looking at the household size it
is the ward number 22 and 25 which has the highest household size i.e. 5.79. The
company can expect higher demand in these wards (22, 25 and 36).
7.2 Marketing Strategy

Kathmandu Enterprise will follow Cost Focus under Porter‟s generic strategy matrix. The
cost focus strategies have narrow scope and its source of competitive advantage is cost.
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.
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 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 Marketing Mix Strategy
7.3.1 Service Strategy

Kathmandu Enterprise aims at providing maid service to households of different wards
of Kathmandu. Since there is a no formal provider of such services our main objective is
to meet the demand with all types of services according to the need and demand of the
households. All the services will be provided within three days of formal request.
Customers can choose any or all services. All the maids will be trained before assigning
them to customers. Any wrong doing by maids will be taken responsibility by the
company. Customers can discontinue the service from our company by notifying to
customer relationship officer one week ahead of decision to formally discontinue
service.
7.3.2 Pricing strategy

The pricing objective of Kathmandu Enterprise Pvt. Ltd 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.
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Table 7 : Service Rate per month for each year
Service Facilities Increased % 5% 5% 10% 10%

Year 1 (Rs.)* Year 2 Rs. Year 3 Rs. Year 4 Rs. Year 5 Rs.
House Cleaning 3800 3990 4190 4609 5069
Dish Washing 4200 4410 4630 5093 5602
Cloth Washing 4000 4200 4410 4851 5336
Cooking 6500 6825 7166 7883 8671
Care Taking 7000 7350 7717 8489 9338
nd rd
*rate increases by 5% in 2 and 3 year and then by 10% thereafter annually
7.3.3 Promotional strategy

Kathmandu Enterprise Pvt. Ltd 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.
Table 8 : Marketing program and expenses
Items Year 1 Year 2 Year 3 Year 4 Year 5

Business Cards 4,500 4,950 5,445 5,990 6,588
Flyers 3,000 3,300 3,630 3,993 4,392
Greeting Cards 4,250 4,675 5,143 5,657 6,222
Print Advertising 45,000 49,500 54,450 59,895 65,885
Electronic Media (FM; 40 sec.) 65,900 72,490 79,739 87,713 96,484
Electronic Media (TV Scroll Ads.) 21,600 23,760 26,136 28,750 31,625
Other Media (Newsletter etc.) 5,750 6,325 6,958 7,653 8,419
Total 150,000 165,000 181,500 199,650 219,615
 Business cards and Flyers

Business Cards will be given to most potential customers and flyers will be
distributed to customers visiting the company office. Office staffs will also
distribute flyers to their contact people.
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 Greeting cards
Greeting cards can be used as a great Marketing Tool when it comes to repeat
business and referrals. Kathmandu Enterprises will use them to thank customers
for accepting our services and for the continuity of the business. Kathmandu
Enterprises send them greeting cards for most of the holiday occasions.
Kathmandu Enterprise will try to send cards as early as possible so it can be the
first in our client‟s mailbox and a way to always remember us. Kathmandu
Enterprise also use handwritten messages to show more appreciation to
customers
 Print advertising
For a maid service business it makes no sense and would be a waste of money
to advertise in a large magazine or buy a TV commercial. Besides being
expensive, these ads will most likely not reach our target audience. The common
print ad, run in a local newspaper or shopper, is the most basic unit of advertising
 Electronic media
Kathmandu Enterprise plan to buy ads in electronic media especially in local FM
stations and TV scroll advertisement. FM advertisements will be carried out 20
days in a year and its frequency will increase every year. TV Scroll
advertisements will be carried out 135 times in a year and its frequency will
increase every year. This can deliver information right to the households that
need our services.
 Other Media
Other inexpensive and efficient strategies that Kathmandu Enterprises target will
use are Referrals, Newsletters, and Word of Mouth (WOM).
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7.3.4 Positioning Strategy

Kathmandu Enterprise Pvt. Ltd. will be positioned in the customers mind as a company
that provides complete quality maid service at economical prices and gives top priority
to safety and reliable service. The tagline for the company will be "We Are Here for
Complete Maid Services".
7.3.5 Partnering strategy

 Alliance with housing companies & colonies
For company the ideal market would be the housing companies and colonies.
Kathmandu Enterprises plans to alliance with them in a contract basis. Our
prospective alliance partners will be:
 Sunrise homes
 Guna colony
 Civil homes
 Horizon homes
 Oriental Apartments
7.4 Growth rate

The basis for measuring the growth of the company will be in terms of service revenue
which is expected to increase by about 50% of previous year service revenue every
year.
7.5 Profitability
The company is expected to incur losses for first two years of operation and then earn
profit from third year at a rate of about 60% every year. Profitability can be in terms of
Net income generated for the company.
7.6 Sales Strategy

The *survey of 60 households from two wards showed that 38%** of the households
need maid service. This shows that about 3,43,891 households/families need maid
service (40,00,000/4.42=904977*38%=343891; population of Kathmandu is about 4
million and average household size taken 4.42 from wars no. 36 of table no. 6). Also,
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age group of 27-59 wish to have maid service the most followed by age group of 60 and
above and family with 3-4 members are in need of maid service the most. So with this
finding the company plans to target and sell its service to age group of 27-59 and family
size of 3-4 (this will be give high priority groups among all) with total of 40 maids at the
beginning year of its operation. And increase the number of maids by 50% annually.
The company‟s strategy is to have cost focus strategy so it will not increase its number
of maids aggressively. Service charge will increase 5% in 2 nd and 3rd year and by 10%
thereafter annually.
Table 9 : Service Revenue Forecast for next five years
House Dish Cloth Care Total Service

Year Cleaning Washing Washing Cooking Taking Revenue
2013 364,800 403,200 480,000 702,000 588,000 2,538,000
2014 574,560 635,040 756,000 1,146,600 882,000 3,994,200
2015 905,040 1,000,080 1,217,160 1,805,832 1,389,060 6,317,172
2016 1,493,316 1,650,132 1,979,208 3,027,072 2,241,096 10,390,824
2017 2,433,120 2,688,960 3,265,632 4,994,496 3,697,848 17,080,056
*Appendix: 1.1, 1.13
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8. Financial Plan
8.1 Capital Structure

Source Amount Ratio
Self-contributed capital Rs. 8,00,000 40%
Bank loan @13% for 6 years Rs. 12,00,000 60%
Total start-up capital Rs. 2,000,000 100%
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 2,000,000
8.3 Pre-Operating Expenses

Particulars Amount
Feasibility Study 5,000
Registration Charges 15,000
Transportation 5,000
Telephone Line 10,000
Training Expenses 20,000
Total 55000
8.4 Service Revenue for the next five years

Increased % 57% 57% 64% 64%
Year 1 Year 2 Year 3 Year 4 Year 5
Service (Rs.)* (Rs.) (Rs.) (Rs.) (Rs.)
Revenue 2,538,000 3,994,200 6,317,172 10,390,824 17,080,056
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8.5 Operating Expenses for the next five years

Year
Particulars 2013 (Rs.) 2014 (Rs.)
2015(Rs.) 2016(Rs.) 2017(Rs.)
Staff salary * 846,000 930,6001,023,660 1,126,026 1,238,629
Maid salary ** 1,203,600 1,981,320 3,284,424 5,396,820 8,866,704
Depreciation*** 111,300 111,300 111,300 111,300 111,300
Rent 250,000 275,000 302,500 332,750 366,025
Audit/Legal charges 5,000 5,000 5,000 10,000 10,000
Marketing expenses 150,000 165,000 181,500 199,650 219,615
Electricity 20,000 20,000 20,000 20,000 20,000
Telephone expenses 48,000 52,800 58,080 63,888 70,277
Office Supplies/Stationery 25,000 27,500 30,250 33,275 36,602
Training expenses 20,000 22,000 24,200 26,620 29,282
Miscellaneous 10,000 11,000 12,100 13,310 14,641
Preliminary expenses written off 55,000
Total 2,743,900 3,601,520 5,053,014 7,333,639 10,983,075
*Appendix: 3.4
**Appendix: 3.7
***Appendix: 3.9
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8.6 Projected Income statement for next five years

Year
Particular 2013 (Rs.) 2014 (Rs.) 2015(Rs.) 2016(Rs.) 2017(Rs.)
Service Revenue#
house cleaning 364,800 574,560 905,040 1,493,316 2,433,120
dish washing 403,200 635,040 1,000,080 1,650,132 2,688,960
cloth washing 480,000 756,000 1,217,160 1,979,208 3,265,632
cook 702,000 1,146,600 1,805,832 3,027,072 4,994,496
care taker 588,000 882,000 1,389,060 2,241,096 3,697,848
Total Service Revenue 2,538,000 3,994,200 6,317,172 10,390,824 17,080,056
Operating Expenses
Staff salary 846,000 930,600 1,023,660 1,126,026 1,238,629
Maid salary 1,203,600 1,981,320 3,284,424 5,396,820 8,866,704
Depreciation 111,300 111,300 111,300 111,300 111,300
Rent * 250,000 275,000 302,500 332,750 366,025
Marketing Expenses ** 150,000 165,000 181,500 199,650 219,615
Electricity 20,000 20,000 20,000 20,000 20,000
Office Supplies/Stationery 25,000 27,500 30,250 33,275 36,602
Miscellaneous 10,000 11,000 12,100 13,310 14,641
Preliminary expenses written off 55,000
Total Operating Expenses 2,743,900 3,601,520 5,053,014 7,333,639 10,983,075
EBIT (205,900) 392,680 1,264,158 3,057,185 6,096,981
Add: Interest on investment 50,000 30,000 60,000 160,000
Less: Interest 156,000 137,256 116,075 92,141 65,095
EBT (361,900) 305,424 1,178,083 3,025,044 6,191,886
Less: Tax @25% 76,356 294,521 756,261 1,547,971
Net Income/(Loss) (361,900) 229,068 883,562 2,268,783 4,643,915
#Appendix: 3.3
*Appendix: 3.10,
**Appendix: 2.1
# Key financial assumptions on Appendix: 4.1
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8.7 Projected Cash flow Statement for the next five years
Particulars Year
Pre- 2013(Rs.) 2014((Rs.) 2015(Rs.) 2016(Rs.) 2017 (Rs.)
operating
Cash Inflow
Beginning Balance 1,388,500 548,715 426,154 636,906 1,208,945
Equity 800,000
Bank Loan 1,200,000
Interest on Investment 50,000 30,000 60,000 160,000
Revenue 2,538,000 3,994,200 6,317,172 10,390,824 17,080,056
Total Cash Inflow (A) 2,000,000 3,926,500 4592915 6,773,326 11,087,730 18,449,001
Cash Outflow
Fixed Assets 556,500
Principal and interest 300,185 300,185 300,185 300,185 300,185
payment*
Operating Expenses
Staff salary 846,000 930,600 1,023,660 1,126,026 1,238,629
Maid salary 1,203,600 1,981,320 3,284,424 5,396,820 8,866,704
Rent 250,000 275,000 302,500 332,750 366,025
Marketing expenses 150,000 165,000 181,500 199,650 219,615
Electricity 20,000 20,000 20,000 20,000 20,000
Office 25,000 27,500 30,250 33,275 36,602
Supplies/Stationery
Miscellaneous 10,000 11,000 12,100 13,310 14,641
Tax paid 76,356 294,521 756,261 1,547,971
Total Cash Outflow (B) 611,500 2,877,785 3,866,761 5,536,420 8,278,785 12,719,931
Surplus/Deficit (A-B) 1,388,500 1,048,715 726,154 1,236,906 2,808,945 5,729,070
Investment # 500,000 300,000 600,000 1,600,000 3,000,000
Ending Cash Balance 1,388,500 548,715 426,154 636,906 1,208,945 2,729,070
*Appendix: 3.8
# Investment is made for short term at the interest rate of 10%
# Key financial assumptions on Appendix: 4.2
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8.8Statement of Retained Earnings for the next five years
Particular Year 1 Year 2 Year 3 Year 4 Year 5

Beginning balance (361,900) (132,832) 750,730 3,019,513
Add: Profit for the period (361,900) 229,068 883,562 2,268,783 4,643,915
Ending Balance (361,900) (132,832) 750,730 3,019,513 7,663,428
8.9 Projected Balance Sheet for the next five years

Particulars Year
Pre-
Assets Operating 2013(Rs.) 2014 (Rs.) 2015(Rs.) 2016(Rs.) 2017 (Rs.)
Current Assets
Cash 1,388,500 548,715 426,154 636,906 1,208,945 2,729,070
Investment 500,000 800,000 1,400,000 3,000,000 6,000,000
Total Current Assets 1,388,500 1,048,715 1,226,154 2,036,906 4,208,945 8,729,070
Fixed Assets
Furniture * 368,500 368,500 294,800 221,100 147,400 73,700
Equipment ** 188,000 188,000 150,400 112,800 75,200 37,600
Fixed Assets 611,500 556,500 445,200 333,900 222,600 111,300
Less: Acc. Depreciation 111,300 103,930 103,930 103,930 111,300
Net Fixed Assets 611,500 445,200 333,900 222,600 111,300 0
Total Assets 2,000,000 1,493,915 1,560,054 2,259,506 4,320,245 8,729,070
Equity and Liabilities
Shareholders' Equity
Equity 800,000 800,000 800,000 800,000 800,000 800,000
Retained Earnings (361,900) (132,832) 750,730 3,019,513 7,663,428
Total Shareholders’ Equity 800,000 438,100 667,168 1,550,730 3,819,513 8,463,428
Long Term Liabilities
Bank loan * 1,200,000 1,055,815 892,886 708,776 500,732 265,642
Total Long Term
Liabilities 1,200,000 1,055,815 892,886 708,776 500,732 265,642
Total Equity and Liabilities 2,000,000 1,493,915 1,560,054 2,259,506 4,320,245 8,729,070
*Appendix: 3.2, **Appendix: 3.1
**Appendix: 3.8
# Key Financial assumptions on Appendix: 4.3
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8.10 Profitability Ratios

Year 2013 (Rs.) 2014 (Rs.) 2015(Rs.) 2016(Rs.) 2017(Rs.)
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 2nd year 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.
8.2 Computation of Payback Period

Year Cashflows Cum. Cash Flows
0 -2000000 -2000000
1 548715 -2548715
2 426154 -2122561
3 636906 -1485655
4 1208945 -276710
5 2729070 2452360
Analysis: Here the payback period for the initial investment is 4.12 years which is less
than the life of the project. Therefore, from the perspective of the payback period, the
project is feasible.
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9. Critical Risk and Contingencies
For establishing Kathmandu Enterprise Pvt. Ltd, the owner should also have a clear
concept and understanding of possible future uncertainties that might be created.
9.1 Internal risk

 Level of managerial skills of Managing director and officers
 Issues related with the manpower turnover
 Low productivity of maids
 Motivational level of employees
 Problems of cash management and cost inefficiencies
9.2 External risk

 Instability in the political system
 Change in law and policies such as tax regulations and labor and employment laws
 Raise in the level of competition due new entrants and informal service providers.
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10. Schedules and Milestones
Throughout the entire life cycle of a business, there are going to be a number of natural
time gradients that exists, and are more than likely to be defined by the eventual and
natural ebbing and flowing of the task workload and the momentum of the team‟s
performance and the business of the schedule. However, it is typically helpful in
attempting to assure that the business is moving effectively as well as to allow points in
time for the management team to pause and look back on what has been accomplished
to date.
August
 Establish conceptual ideas of maid services
 Begin research of the industry and trends
September
 Business plan: This will be done as a roadmap for the organization. It will be an
indispensable tool for the ongoing performance and improvement of the
company.
October
 Complete Registration and Licensing: This will be done within the first three
months. This includes setting up the physical office where business will be
transacted.
November
 Site search, evaluation and selection
 Completion of architectural layout design
 Complete recruitment and selection
 Select suppliers
39 | P a g e
December
 Complete layout
 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 and orientation part of our constant effort to deliver
quality service.
 Establish corporate relationship
January
 Begin operations
40 | P a g e
11. Future Plan and Exit Strategy
11.1 Future plan

Kathmandu Enterprise plans to serve other segments of the market especially the
following ones:
 Private organizations and public corporations which usually need cleaning

service
 Colleges and schools which need cleaning and food preparation service
 Kindergartens which need care taker service
To serve these new segments the company will hire additional employees in
management and as well as hire additional maids. Provide training to maids according
to the need of new clients.
11.2 Exit strategy

On the basis of the present analysis all the financial parameters seems to be in the
positive trend. So company should not stop its service in the future.
Nonetheless, due to no entry barriers for this industry, there might exists tough
competition in the market and sustaining in the market might become difficult. So if our
company could not retain itself in the market, we need to pre-plan for the exit strategy.
In such worst situation if the company goes in unfavorable condition, we will sell the
company.
41 | P a g e
APPENDIX
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 (multiple
Response)
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 Kathmandu valley?

a. Yes b. No
5. Would you be willing to take maid service from a private company?

a. Yes b. No
42 | P a g e
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)
(Thank you for your kind cooperation)
43 | P a g e
1.2 Frequency distribution based on Gender
Gender Frequency Percent

male 22 36.67
female 38 63.33
Total 60 100
1.3 Frequency distribution based on Age group
Age Group Frequency Percent

16-26 5 8.33
27-59 45 75
60 and above 10 16.67
Total 60 100
1.4 Frequency distribution based number of Family Members
No. of Family Members Frequency Percent

1-2 8 13.33
3-4 25 41.67
5-6 18 30
Above 6 9 15
Total 60 100
44 | P a g e
1.5 Frequency distribution based on Occupation
Occupation Frequency Percent

Government service 9 15
Private Service 26 43.33
Business 13 21.66
Housewife 12 20
Total 60 100
1.6 Frequency distribution based on Monthly Income
Monthly Income Frequency Percent

8000-12000 8 13.33
13000-17000 24 40
18000-22000 11 18.33
22000-26000 10 16.67
Above 26000 7 11.66
Total 60 100
1.7 Frequency based on household having maid service
Household Frequency Percent Total

Residential Area 9 9/30=30 30
Apartment 14 14/30=46 30
Total 23 23/60=38 60
45 | P a g e
1.8 Cross tabulation between age group and willingness to have maid service
Age Group Maid Service

Yes No
16-26 2(5.55) 3(12.5)
27-59 28(77.77) 17(7.08)
60 and above 6(16.66) 4(16.66)
Total 36 24
1.9 Cross tabulation between number of family members and willingness to have
maid service
No. of Family Members Maid Service
Yes No
1-2 2(5.88) 6(23)
3-4 17(50) 8(30.76)
5-6 11(32.35) 7(26.92)
Above 6 4(11.76) 5(19.23)
Total 34 26
1.10 Cross tabulation between occupation and willingness to have maid service
Occupation Maid Service

Yes No
Government service 3(5.88) 6(23)
Private Service 17(50) 9(30.76)
Business 8(32.35) 5(26.92)
46 | P a g e
Housewife 4(11.76) 8(19.23)

Total 32 28
1.11 Cross tabulation between number of family members and purpose of having
a maid
Monthly
Income House Dish Cook Cloth Care
Cleaning Washing Washing Taker
8000-12000 1 3 4
13000-17000 3 8 4 8 1
18000-22000 2 3 2 3 1
22000-26000 2 2 2 3
Above 26000 1 2 1
1.12 Cross tabulation between monthly income and willingness to have maid
service
Monthly Income Maid Service
Yes No
8000-12000 2(6.25) 6(21.42)
13000-17000 9(28.125) 15(53.57)
18000-22000 8(25) 3(10.71)
22000-26000 8(25) 2(7.14)
Above 26000 5(15.625) 2(7.14)
Total 32 28
47 | P a g e
1.13 Findings:
1. Currently 38% of the household need atleast one type of maid service; it is high
among household living in apartments (46%) whereas 30% among people living
in single homes.
2. Age group of 27-59 wish to have maid service the most (77.77%) followed by age
group of 60 and above (16.66%), it is low among age group of 16-26 (5.55%)
3. Family with 3-4 members are in need of maid service the most (50%) followed by
5-6 (32.35%).
4. In occupation, private service holders are in need of maid service the most (50%)
followed by businesspersons (32.35%).
People with monthly income above 13000 and above 26000 are willing to have a maid
2. Marketing Plan
2.1 Marketing activities and its expenses
Items Price Qty. Amount

Business Cards 9 500 4,500
Flyers 5 600 3,000
Greeting Cards 85 50 4,250
Print Advertising 4,500 10 45,000
Electronic Media (FM; 40 sec.) 3,295 20 days 65,900
Electronic Media (TV Scroll Ads.) 160 135 21,600
Other Media (Newsletter etc.) 5,750
Total 150,000
48 | P a g e
3. Financial Plan
3.1 Details of Office Equipment
Items No. Cost Per Unit Total Cost

Computer 2 40000 80,000
Printer 1 20000 20,000
Photocopy Machine 1 80000 80,000
Telephone Sets 4 800 3,200
Water Filter 1 4800 4800
Total 9 188000
3.2 Details of Office Furniture
Items Quantity Rate Per Unit Total Cost

Chairs 5 1000 5,000
Office Table 2 1500 3,000
Sofa 1 set 20000 20,000
Executive Chairs 4 2000 8,000
File Cabinets 4 5000 20,000
Carpet 1000 sq. ft 300 300,000
Curtains 25 meters 300 7,500
Mis 5000 5,000
Total 368,500
3.3 Percentage increase in service revenue for the next five years
Increased % 57% 57% 64% 64%

Year 1 Year 2 Year 3 Year 4 Year 5
Service (Rs.)* (Rs.) (Rs.) (Rs.) (Rs.)
Revenue 2,538,000 3,994,200 6,317,172 10,390,824 17,080,056
49 | P a g e
3.4 Staff Salary for the next five years
Staffs/ Year 1 2 3 4 5
24000 26400
Managing Director 0 0 290400 319440 351384
18000 19800
Administrative Officer 0 0 217800 239580 263538
Human Resource/Customer 24000 26400
Relationship Officer 0 0 290400 319440 351384
10560
Database Operator 96000 0 116160 127776 140554
Security Guard 90000 99000 108900 119790 131769
846,0 930,6 1,023,6 1,126,0 1,238,6
Total 00 00 60 26 29
3.5 Number of maids for the next five years
Yea House Dish Cloth Coo Care

r Cleaner Washer Washer k Taker Total
1 8 8 10 9 7 42
2 12 12 15 14 10 63
3 18 18 23 21 15 95
4 27 27 34 32 22 142
5 40 40 51 48 33 212
3.6 Maid salary per month for each year for the type of work done
Year House Cleaner Dish Washer Cloth Washer Cook Care Taker
1 2100 2200 2100 2500 3200
2 2310 2420 2310 2750 3520
3 2541 2662 2541 3025 3872
4 2795 2928 2795 3327 4260
5 3074 3221 3074 3660 4686
50 | P a g e
3.7 Maid salary for the next five years
Year
Types of Service 2013 2014 2015 2016 2017
House Cleaning 201600 332640 548856 905580 1475520
Dish Washing 211200 348480 574992 948672 1546080
Cloth Washing 252000 415800 701316 1140360 1881288
Cooking 270000 462000 762300 1277568 2108160
Care Taker 268800 422400 696960 1124640 1855656
Total 1,203,600 1,981,320 3,284,424 5,396,820 8,866,704
3.8 Loan amortization Schedule
Loan Amortization
At D:E=60:40 (1200000:800000)
1200000=A×PVIFA (13%,6 years)
A=300185
Year Installment Int.@13% Principal Principal O/S

0 1200000
1 300185 156000 144185 1055815
2 300185 137256 162929 892886
3 300185 116075 184110 708776
4 300185 92141 208044 500732
5 300185 65095 235090 265642
3.9 Depreciation calculation using straight line method
Items Value Depreciation rate (%) Depreciation Amount

Equipment:
Computer 80000 20 16000
Printer 20000 20 4000
Photocopy Machine 80000 20 16000
Telephone Set 3200 20 640
Water Filter 4800 20 960
51 | P a g e
Furniture 368500 20 73700

Total 556500 111300
3.10 Rent expenses for office space
Particulars Sq. Ft. Rate Rent per month Rent per Year
Office Space 850 24.5 20,833 250,000
3.11 Cash inflow for next five years
Year 1 2 3 4 5
Net Income/Loss (361,900) 229,068 883,562 2,268,783 4,643,915
Add: Depreciation 111300 111300 111300 111300 111300
Cash Flow -250600 340368 994862 2380083 44755215
52 | P a g e
4. KEY FINANCIAL ASSUMPTIONS

4.1 Income Statement Assumptions
Service Revenue
Customer base: It increases by 50% of preceding year demand for maids.
Service rate: It increase by 5% in 2nd and 3rd year and then by 10% thereafter
annually.
Operating Expenses
Rent: It increases by 10% of preceding year expense.
Depreciation: The organization will follow straight line method with

depreciation rate of 20% on an average of all depreciable fixed assets of the company.
On average the life of total fixed assets is assumed to be 5 years with zero salvage
value.
Audit/Legal Charges: It will remain constant for 1st, 2nd and 3rd year and
increase by 50% of preceding year.
Marketing Expenses: It increases by 10% of preceding year expenses.
Office Supplies/ Stationery: It increases by 10% of preceding year expenses.
Electricity: It remains constant throughout the year.
Telephone Expenses: It increases by 10% of preceding year expenses.
Miscellaneous: It increases by 10% of preceding year expenses.
Interest Rate: The long term interest rate for the organization will be 13% and
this interest rate is not subjected to change for 5 years. This is in accordance with the
contract with the lending bank.
Tax Rate: Corporate tax rate is 25%. They are paid in the year they are
occurred.
Staff Salary: It increases by 10% of preceding year expenses.
Maid Salary: It increases by 10% of preceding year expenses.
Net Income/Loss
Profits: All the profits (net income) will be retained for further investment.
53 | P a g e
4.2 Cash Flow Assumptions
Investment: Surplus fund will be invested at 10% interest rate in marketable

securities. It will not be sold for 5 years.
4.3 Balance Sheet
Current Assets
Investment: Investment in marketable securities will not be sold thus

accumulated for each year.
Fixed Assets:
Furniture/ Equipment: The value of furniture and equipment decreases by 20%

annually. No additional assets will be added in 5 years time.
Equity and Liability
Equity: Equity is not expected to change for next five years
Loan: Loan will be amortized at 13% for six years
54 | P a g e
5. Operation Plan
5.1 The actual layout design
Managing Director
Room
Administrative
/Account Division
Human Resource
Division
Figure No.2: Layout Design
Appendix2
Security Guard’s
4.2 Operation Schedule for First Year
Room Entrance
Year 0 (in months) year 1 (in months)
55 | P a g e
5.2 Operation Schedule
Type Of work 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10
Preparation
Preparation for
getting Licence
Documentation
for Licencing
Licence
Approval
Preparation for
Site Location
Search and
Evaluate Site
Finalize Site
Completion of
architectural
layout design
Complete layout
56 | P a g e
Marketing/
Promotion
Office Supplies
Evaluate
suppliers/Sellers
Select and
Purchase of
office supplies
Human
Resource
Recruitment and
selection
Training
Service
Start Service
57 | P a g e

Business Plan On Maid Service

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Business Plan On Maid Service

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Business Plan

July 23, 2012

5.4 Recruitment and Selection ...............................................................................................14

7.6 Sales Strategy .................................................................................................................30

Table 1 : Industry Analysis ........................................................................................................................ 4

Table 2 : Capacity Plan for the next five years .................................................................................... 18

Table 3 : Total number of staffs and their salary ................................................................................. 21

Table 4 : Qualification and skills of staffs and management team ................................................... 22

Table 5 : Work Schedule of Maids ......................................................................................................... 22

Table 6 : Kathmandu metropolitan: Population, household size....................................................... 25

Table 7 : Service Rate per month for each year ................................................................................ 28

Table 8 : Marketing program and expenses ........................................................................................ 28

Table 9 : Service Revenue Forecast for next five years .................................................................... 31

Figure 1 : Organizational Structure Chart ........................................................................................... 13

1.1 Background of the Business

1.2. Basic Philosophy

1.2.4 Critical Success Factors

1.2.5 Company Values

 Abide with rules and regulations of the country

2. BUSINESS ENVIRONMENT ANALYSIS

2.1 Industry Analysis

Table 1 : Industry Analysis

Porters 5 forces Strong Moderate Weak

Competitive Rivalry: The level of competition in the market is expected to be moderate

2.2 SWOT ANALYSIS

2.2.1 Analysis of Kathmandu Enterprises Pvt. Ltd.

2.2.2 Analysis of Competitors

2.3 PEST Analysis

-Economic:With the liberalization of economy and commitment of government towards

4. MARKET RESEARCH AND ANALYSIS

4.1 Primary Research

 Identify the potential size of the market

 Identify the target group for providing service profitably

feedback would be incorporated to design our service.

 To know the future of our service for upcoming years.

 To know our potential competitors

4.2 Sampling Plan

4.3 Research Instrument

4.4 Target Market

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

4.5 Data sources

4.6 Survey Findings

4.8 Company strategy

 Questionnaire Survey on “Peoples‟ attitude towards maid service”, Appendix: 1.1

Central Bureau of Statistics (CBS): www.cbs.gov.np

5.1 Form of Business

5.2 Legal Status

The detailed organizational structure of the company is as follows:

Figure 1 : Organizational Structure Chart

Administrative/ Human Resource /

5.4 Recruitment and Selection

5.5 Remuneration and Compensation System

5.6 Training and Retention Plan

Remuneration package will be reviewed on an annual basis and compensation will be

6.1 Quality Management

 Code of conduct will be developed by the company and strictly

6.1.1 Safety and security

6.2 Process of Service Delivery and Capacity Design

6.2.1 Process of Service Delivery

6.2.2 Capacity Design

 Questionnaire Survey on “Peoples‟” attitude towards maid service”.

*Appendix: 1.13:, **Appendix:1.8, ***Appendix: 1.9

Table 2 : Capacity Plan for the next five years

Appendix: 1.13:, Appendix:1.8, Appendix: 1.9