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An Analysis of Homa's Housekeeping Business

Student Name

Institution Affiliation

Course Name and Number

Instructor’s Name

Due Date
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Executive Summary

Homa faces a career choice dilemma between accepting a full-time position,

becoming the Head Coordinator at a non-profit organization, and starting her cleaning

business. For Homa to an informed decision, she needs to consider various factors, including

her long-term goals, financial prospects, and personal satisfaction. She also needs to optimize

the service mix and pricing strategy for her cleaning business, deciding on a vehicle

(purchasing or leasing), and considering a potential partnership offer are critical decisions she

must make.

A SWOT analysis that reveals Homa's strengths, such as her business administration

diploma and executive assistant experience. The SWOT analysis also shows her weaknesses

to include a lack of expertise in accounting and financial analysis. Several opportunities exist

to her, including the increasing demand for cleaning services and potential partnerships,

while threats include intense competition and changing customer preferences.

To support Homa's decision-making process, qualitative analysis examines the pros

and cons of each option, while financial analysis calculates revenue potential, costs, and

profitability indicators have included in this essay. The essay also includes conclusion from

the both qualitative and quantitative analysis, and recommendations for Homa to help her in

making informed-decisions.

Issues

 Dilemma to decide between accepting a full-time position with her current employer,

accepting on a new role as Head Coordinator at the non-for-profit organization, or

starting her cleaning business.

 Need to maximize revenues by determining the effective service mix and pricing

strategy for her cleaning business.

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 Need to decide whether to purchase a used vehicle or lease a hybrid car for her

business operations, considering the long-term viability, cost, and financial

implications of each option.

 Unsure whether to accept Toto's offer to become a business partner, particularly

considering his skills, personality, and the potential impact on decision-making and

ownership in the business.

 Need to develop an effective marketing and branding strategy to promote her cleaning

business and attract customers.

SWOT Analysis of Homa

Strengths

 Homa has a diploma in business administration that provide her with foundational

knowledge in business management.

 She has experience as an executive assistant that has equipped her with skills in

organization, communication, and scheduling.

 Homa is passionate about her volunteer work, which is an indication of a commitment

to helping others.

 She has existing networking and connections, as well as believes she can achieve

success in her first year of her business.

Weaknesses

 Homa lacks expertise in financial analysis and accounting that pose challenges in

managing her business finances.

 She is not sure about the technical aspects of online advertising and website

development.

 Homa has limited experience in operating her business and can encounter difficulties

in strategic planning and decision-making.

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 She lacks knowledge in bookkeeping and record-keeping, hindering her ability to

accurately track business performance.

Opportunities

 There is an increasing demand for cleaning services because people have busy

schedules and the need for frequent cleaning in corporate and residential settings.

 The potential to exploit into the tourism market by providing cleaning services to

short-term rental property owners.

 Partnership opportunities with Toto to leverage his technical expertise and potentially

expand the business.

Threats

 High competition from established cleaning service providers existing in the local

market.

 Potential reputation risks if the quality of service provided by Homa's business does

not meet customer expectations.

 Economic fluctuations that can influence the demand for cleaning services.

 Changes in customer preferences and trends that require adapting service offerings in

the market.

Qualitative Analysis

1. Career choice dilemma

Pros

 Full-time position with the tech company offers stability, job security, higher salary,

and other benefits, such as paid holidays and retirement scheme.

 Head Coordinator position allows Homa to contribute to a cause and attain her

passionate about it.

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 Starting a cleaning business gives Homa the opportunity to pursue entrepreneurship,

be her own boss, and earn higher profits.

Cons

 Full-time position limits Homa's flexibility and time for volunteering.

 Head Coordinator position also limit her growth opportunities and cannot provide her

with same financial benefits as the corporate job or entrepreneurship.

 Starting a business involves higher risks, financial investment, and uncertainty when

compared with the other options.

2. Service mix optimization

Pros

 Offers different services to allow Homa to cater to different customer needs and

maximize revenue potential.

 Adjusting the pricing strategy in accordance with service types to help optimize

profitability.

 The potential to target both corporate and residential clients increases the customer

base and revenue streams.

Cons

 Provide various e services require additional resources and coordination, increasing

complexity.

 Pricing strategy need careful consideration for it to remains competitive in the market.

 Balancing different types of services require effective scheduling and management to

avoid conflicts and overcommitment.

3. Vehicle decision

Pros of purchasing a used vehicle

 Ownership of the vehicle provides flexibility and control over its usage.
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 No monthly lease payments that reduce long-term costs related to business

operational expenditures.

Cons of purchasing a used vehicle

 Potential maintenance and repair expenses.

 Depreciation of the car's value over time.

 Higher amount of deposited needed compared to leasing.

Pros of leasing a hybrid car

 Lower upfront cost with a smaller down payment and lower monthly payments.

 Potential tax benefits for leasing a hybrid vehicle.

 Access to newer technology and potentially better fuel efficiency.

Cons of leasing a hybrid car

 Limited mileage allowances and penalties for exceeding them.

 No ownership in the car.

 Higher long-term cost compared to purchasing if the lease is renewed.

4. Partnership decision

Pros

 Toto's technical expertise may support the development of the business website and

online advertising to enhance its online presence.

 Enable sharing of the financial burden and responsibilities between the two partners.

 Toto's accounting skills may eliminate Homa's weaknesses in managing the financial

aspects of the business.

Cons

 Homa to depend on Toto's availability and commitment for the long-term success of

the partnership.

 Sharing decision-making authority that leads to slow process of making decisions.

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 Instances of disagreements as a results of Toto's stubborn personality.

4. Marketing and Branding Strategy

Pros and Cons of Marketing and Branding Strategy in Relation to Homa's Case Study:

Pros

 Implement a marketing and branding strategy help increase Homa’s visibility in the

market. The marketing to enable potential customers to discover her cleaning business

and consider her services when in need.

 Develop an effective brand identity todifferentiate her business from competitors.

 Help Homa to define a target market and focuse her marketing efforts on reaching the

right audience.

 Adopt effective marketing strategies to promote customer engagement.

 Contribute to business growth through the attraction of new customer and expansion

of Homa’s client base.

Cons

 Develop and monitor a marketing and branding strategy requires time and resources.

 The cleaning services industry is highly competitive that requires Homa to develop

stands out from competitors and effectively communicates the value of her services.

 Advertising and marketing are additional expenses that affect the overall cost of

operating the business.

 Homa is unfamiliar with marketing and branding concept that hinders her to

implement effective strategies.

 The need to adapt marketing strategies based on changing market trends and customer

preferences that can force her to continually evaluate and adjust her marketing efforts

to remain relevant and competitive in the market.

Quantitative Analysis: Financial Analysis

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Financial calculations are considered to help Homa in making informed decisions from the

identified issues.

1. Career choice dilemma

Table 1 assigns a weight on a scale of 0 to 10 to indicate the importance of each

option to Homa. Each option (full-time position, Head Coordinator role, or cleaning business)

has been scored based on the criteria, with higher scores indicating a better fit. The total score

is calculated by summing the weighted scores for each option. From the table 2, the cleaning

business option receives the highest score of 7.51, indicating that it aligns more closely with

Homa's priorities and preferences.

2. Revenue potential based on the service mix and estimated number of clients.

Table 2 shows that the estimated revenue potential for Homa's housekeeping business

in consideration to the service mix and estimated number of clients is $150,000.

3. Costs and investments, including supplies, vehicle purchase or lease, website

development, and advertising.

Table 3 illustrates that the cost for a used car is about $12,000, and the cost for leasing

a hybrid vehicle is $3,000 per year. The website development cost is estimated at $2,500, and

the advertising cost is approximately at $1,500.

4. Profitability indicators, such as gross profit margin, net profit margin, and return on

investment (ROI) or assets.

Table 4 shows that the gross profit margin is 80%. Thus, the revenue generated from

Homa's cleaning services is 80%, which is available to cover other expenses and generate

profit. The net profit margin is 35%, indicating that 35% of the revenue generated is retained

as net profit. These profitability indicators provide insights into the financial performance and

efficiency of Homa's cleaning business. For example, a higher gross profit margin and net
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profit margin in the case of Homa indicate better profitability, while a higher ROI suggests a

higher return on the investment made in the business (Anderson & Fennell, 2013).

5. Marketing and branding strategy

Table 5 demonstrates that cost of advertising: website creation is $3,300 and monthly

Google Ads is $1,440 per year, implying the total cost of advertising is $4,740 (Rist &

Pizzica, 2014). Table 5 also shows that the potential additional revenue from advertising is

$301,080 per year, while the cost of advertising is $4,740 per year. The ROI is 6310.92%,

indicating a significant return on investment. Therefore, Homa needs to invest in advertising

for her cleaning business.

Recommendations

 Homa should consider the long-term goals, financial prospects, and personal

satisfaction of each option. If she values independence and entrepreneurship, starting

the business may be a good choice. However, she needs to carefully evaluate the

risks, financial requirements, and market competition. Further, she prefers stability

and financial security, accepting the full-time position or the Head Coordinator role

can be appropriate for her.

 Homa should determine the optimal service mix by analyzing customer demand,

market competition, and profitability of each service category. She needs to consider

conducting market research or surveys to gauge customer preferences and adjust the

pricing strategy accordingly. Continuously evaluate and adapt the service mix based

on customer feedback and market trends.

 Homa should evaluate the long-term costs, usage requirements, and financial

implications of purchasing a used car versus leasing a hybrid vehicle. She has to

consider various factors, such as maintenance costs, mileage, and potential resale

value. If she expects a high usage rate and wants long-term ownership, purchasing a
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used car may be more beneficial. Conversely, if cost savings and access to newer

technology are prioritized, leasing a hybrid vehicle could be the better option for her.

 Homa should assess the compatibility and commitment of Toto as a potential business

partner. She needs to consider the value Toto brings in terms of technical expertise

and accounting skills, as well as the potential impact on decision-making and

ownership of the business. If she feels confident in Toto's abilities and values

collaboration, accepting the partnership offer may provide support and shared

responsibilities. Nonetheless, if concerns about long-term commitment arise, it can be

wiser to consider a more limited partnership arrangement.

Conclusions

In summary, pursuing Homa's Housekeeping business is a viable option, considering

the demand for cleaning services and Homa's passion for entrepreneurship. Conversely,

market analysis, careful planning, and financial management are important for success. In

addition, accepting the full-time position or the Head Coordinator role offer financial security

stability, and the career development opportunity to contribute to a cause Homa is passionate

about. These two options have been evaluated based on her career goals, personal

preferences, and financial considerations. Further, maintaining accurate records and

implementing appropriate bookkeeping practices are essential for Homa's Housekeeping

business. Accurate records can in tracking of expenses, monitor cash flow, and ensure

compliance with tax regulations to provide useful information for making informed business

decisions and evaluating the financial performance of the business. Lastly, adverting and

marketing is a viable option for Homa’s Housekeeping business and she needs to preceed

with implementing an effective advertising strategy to capitalize on the growth opportunities

available in the market.

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References

Anderson, J., & Fennell, A. (2013). Calculate financial indicators to guide

investments. Chem. Eng. Prog, 109(9), 34-40.

Rist, M., & Pizzica, A. J. (2014). Financial ratios for executives: How to assess company

strength, fix problems, and make better decisions. Apress.

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Appendices

Table 1.

Criteria Weight (0- Full-time Head Cleaning

10) Position
Salary 8 9
Benefits 7 9
Growth Opportunities 9 8
Personal Satisfaction 10 7 9
Revenue Potential 9 -
Costs and Investments 8 -
Independence 6 3
Entrepreneurship 9 2
Opportunities
Total Score 6.74
Coordinator Business
7 2
5 -
6 7
8
- 10
- 5
5 9
3 8
6.54 7.51

Table 2.

Service Category Estimated Number of Clients Service Price Revenue Potential

Residential cleaning 400 $100 $40,000
Commercial cleaning 300 $150 $45,000
Deep cleaning 200 $200 $40,000
Specialized cleaning 100 $250 $25,000
Additional services - Varies -
Total - - $150,000

Table 3.

Cost/Investment Amount ($)

Supplies $8,000
Vehicle Purchase or Lease
- Used car $12,000
- Hybrid vehicle lease $3,000/year
Website Development $2,500
Advertising $1,500
Total $26,000

Table 4.

Profitability Calculation Value

Indicator
Gross Profit Margin (Total Revenue - Total Cost of Supplies) / Total Revenue * 100
Net Profit Margin (Total Revenue - Total Costs and Investments) / Total Revenue *
100
Return on Investment Net Profit / Total Investment
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Profitability Indicator Calculation Value

Gross Profit Margin ($40,000 - $8,000) / $40,000 * 100 80%
Net Profit Margin ($40,000 - $26,000) / $40,000 * 100 35%
Return on Investment (Net Profit) / ($26,000)

Table 5.

Service Current Increase Projected Additional Revenue

Customers (%) Customers per Year
House Cleaning 15 25% 19 $118,560
Common Areas 5 25% 6 $49,920
Corporate 4 25% 5 $91,000
Cleaning
Special Projects 10 25% 13 $15,600
CloudBnB 4 25% 5 $26,000
Total $301,080