Kangaroo Laundry and Dry-Cleaning Services Inc. Business Plan

Executive Summary Kangaroo Laundry and Dry-Cleaning Services Inc. (KLDC) is a laundry and dry-cleaning business entity located in the eastern suburbs of Sydney, Australia. The company offers both home-based and onsite laundry and dry-cleaning services. The business strategy is divided into four segments: pick and delivery, onsite, home-based services, and laundry equipment repair. The start-up cost of the business is $4 million and is expected to generate an annual net income of $1.8 million. The business seeks to exploit the economic recovery from Covid-19 and the increasing demand for online laundry services. The company expected to develop and sustain a competitive advantage by offering memorable washing experiences. Additional services like day-care, safe play spaces, family and group sections will provide value by ensuring customers always desire to wash with us. The business's key objectives are to double its number of employees within three years with a similar realization in revenue. The company will rely on its outreach channels to engage the market through online programs and community-based voluntary activities involving sports and environmental conservation.
  Introduction Kangaroo Laundry and Dry-Cleaning Services Inc. (KLDC) is a laundry and dry-cleaning business entity located in the eastern suburbs of Sydney, Australia. The company offers both home-based and onsite laundry and dry-cleaning services. The business strategy is divided into four segments: pick and delivery, onsite, home-based services, and laundry equipment repair. The pick and delivery segment involves clients ordering services through online and physical platforms the company will avail. When an order is placed, the customer prepares the load of laundry, and then it is picked by the company's agent, who delivers it at the company site for washing (Afifah & Hudin, 2018). Once the laundry is complete, the load is delivered where it was picked or at the place of the client's choosing. The pick and delivery services will have a geographical limit in the first two years of operation. The second segment involves a self-services strategy where clients carry their laundry to our company site and use our facilities to wash. The segment provides spaces for individual or grouped (family) washing to nurture family bonds and teamwork. In this segment, customers are charged based on laundry. Time spent washing, amounts of water, electricity, and detergents used alongside extra costs for ironing and in-house tailor services. The third segment caters to customers who would like their laundry done from home with our expertise. The services encompass professional cleaning of walls, windows, floors, carpets, and sofas. The decision to venture into the business was motivated by three main problems. Firstly, Australia (and the world) is recovering from the economic damages of Covid-19 that caused the loss of jobs and the closure of businesses. In the United States, Kharif and Yang (2020) found that one in six dry cleaning companies closed shop at the onset of Covid-19. The closure of businesses and loss of jobs coupled with increased expenditures on essential commodities and services significantly reduced the industry's market size. However, given the worldwide vaccination programs, the global economy and the Australian laundry industry will have growth prospects (Prnewswire, 2021). The growth will demand laundry services because most families will focus on jobs to recover from the Covid-19 economic predicaments. Secondly, the business was chosen because of the increasing online-on-demand laundry services. In the absence of Covid-19, the global on-demand laundry services market was expected to be 18.92% annually through 2020 (Technavio, 2020). The increase in on-demand services was due to rapid urbanization (Craggs, 2017), increasing working population, increasing single-person households (AIFS, 2017), and the increasing demand for luxury time (Hassett et al., 2021). Therefore, by exploring this niche, KLDC will be in a position to compete for the market share as the economy recovers. Further, households' increasing ownership of laundry equipment is the prediction that repair services will be required. Lastly, the decision was also based on the prediction that Covid-19 has altered interaction behavior among people because of the social distancing measures. Therefore, some people want to keep safe by limiting movement. With the increased prevalence of teleworking (Chang et al., 2021), a section of the population will prefer to have little interaction with the outside world as the pandemic ends following the vaccination programs. Therefore, by offering home-based cleaning services, KLDC will bring the services to household doorsteps. KLDC will target three market segments: learning institutions, low- and middle-income households (or residential areas), and small businesses. The first segment consists of all learning institutions where the company targets to handle sports equipment attires laundry needs. College and university students are also in this category because they require laundry services to have more time to study. The students have an option of washing from our facilities either as a group or individual. Our facilities also offer study spaces where students can hold discussions, do homework, and study while working on their laundry. Low- and middle-income households have low ownership rates of laundry machines and dry-cleaning equipment. Homeownership of laundry equipment is the biggest threat in the industry. Since a majority will be seeking job opportunities, KLDC will off them laundry services to free their schedules. Lastly, KLDC seeks to provide affordable packages by targeting small businesses and start-ups. While there are hundreds of laundry service providers in Sydney, KLDC will have a competitive edge for several reasons. Firstly, the company will provide efficient door-to-door delivery services. Customers who order these services will monitor the progress of their laundry on our online platforms, including the KLDC Application, website, and social media pages. Secondly, the company will provide customized services for different types of clients. For instance, the onsite washing segment will provide spaces where families can carry out laundry or where students can study while working on personal laundry (Plesse, 2016). In this aspect, the business is equally interested in quality washing outcomes and memorable washing experiences. Part of the customized services is choosing environment-friendly detergents and additional services like ironing, folding, and tailoring. The company will also provide indoor tailor services, detergent selection, and an extension of accessories like buttons and cufflinks. Industry and Market Analysis In Australia, the market size, measured by revenue, of the laundry and dry-cleaning industry is $2.3 billion as of 2021. Because of the impact of Covid-19 on the global pandemic, Australia's industry is expected to shrink by 3.3% in 2021 (IBISWorld, 2021). The decline was faster than other industries, including personal services industries, highlighting that Austrians cut expenditures at the onset of and during Covid-19. Between 2016 and 2020, the market shrunk by 1.1% annually. Some of the reasons for the shrinkage were a decrease in service quality and an increase in homeownership of laundry and dry-cleaning equipment. KLDC seeks to explore this niche by providing automated high quality, and efficient services. The primary negative factor in the laundry and dry-cleaning industry is stiff competition. Currently, there are over 4,000 laundry and dry-cleaning business providers, with the value of the business growing to $2 billion since 2015 (IBISWorld, 2021), with an annual growth rate of 1.6% before the onset of Covid-19. While the pandemic has disrupted business, it is expected that recovery will produce positive growth. It implies that the industry has a mature market in which each neighborhood has a high likelihood of having at least one laundry and dry-cleaning service provider (IBISWorld, 2021). The problem will be overcome by the provision of memorable washing experiences and top-notch technology. A potential opportunity in the current market setting is the increasing demand for services before the onset of Covid-19. Recovery from Covid-19 is also expected to increased service demands. The fall in demand during Covid-19 was closely associated with the closure of the hospitality industry. Recovery of the industry will significantly boost the recovery of the laundry and dry-cleaning industry. Product, Market, and Economic Feasibility Laundry is an activity that requires continuous consideration in every household. Regardless of the situation, every household will always have dirty laundry at some point. For the busy urban population of Sydney, KLDC seeks to be a preferred alternative in offering laundry services. Besides households, learning institutions have students who want convenient and affordable services that offer both experience and value. The hospitality industry also consists of a significant share of a source of revenue for the industry, and therefore, the recovery of the former implies good prospects for the latter. The projected economic recovery from Covid-19 is expected to influence the growth of the laundry industry. It implies that market demand for laundry services will increase as the economic recovery is realized. Potential barriers to entry include competition, cost of start-up, and the increased environmental requirements.  Business Model Canvass Customer Segments KLDC will target three key market segments: low- and middle-income urban households, learning institutions, and businesses in the hospitality industry. Low- and middle-income households were the most hit at the onset of Covid-19. Economic recovery implies the population will seek laundry services to have free time to pursue social and economic opportunities. By targeting families, the company seeks to provide family bonding times that can be fun and equally productive. These households also have a low rate of ownership of household laundry equipment. The company will offer affordable prices with complementary services like internet connection, study areas, and a mini-library in learning institutions. Convenient online delivery services will also be provided through the company website and applications. Value Proposition KLDC value proposition is based on the theory of Relational Development (Ylimäki & Vesalainen, 2015). The theory assumes that the approach to relational norms as the basis for rationality in business relations is a marketing niche. In theory, norms are role expectations of each stakeholder in a business entity and may encompass behavioral orientation such as consumer behavior. Analytical understanding of consumer behavior will provide the company with a basis for value proposition. For instance, consumers are increasingly opting for environment-friendly detergents and efficient laundry equipment. KLDC seeks to position itself towards this orientation to exploit customer behavior. Based on the theory, a key trend in the industry is the increasing desire for a good washing experience. When targeting families, for instance, the company will ensure that a day can be full of fun and productive at the same time. The company will provide value for the time a family spends at the facility by allowing access to safe play space, internet connection, and snacks. Students can enjoy the same value by having quiet areas where they can study while doing laundry. Some households may opt to receive cleaning services at home. The company will exploit this niche by providing professional home cleaning services and laundry equipment repair. Channels KLDC appreciates that customer relations can only be enhanced through effective channels. The company will implement its channels of interaction with the customer by following the five-channel phases. The phases include awareness, evaluation, purchase, delivery, and after-sale. In this structure, awareness refers to how the company will spread a message about the services. Besides social media platforms and web analytics, the company will be involved in community-based sports and environmental activities. The company will also implement annual surveys and reviews to evaluate the services provided and determine consumer behavioral trends. In terms of purchase, customers can find our services online, at home, or at our brick-and-mortar facility, where self-checkout will be implemented. Therefore, services will be delivered both over the counter and delivery at the doorstep. The company will also provide post-purchase customer support through the call center, implementation of return policy, and customer assistance. Customer Relationships The relational theoretical framework (Ylimäki & Vesalainen, 2015) utilized in the value proposition highlights the importance of good relations between the organization and stakeholders. Customers are our key stakeholders, and our relationship depends on how effective and efficient we are when it comes to communication. Customers will have a variety of ways through which they can interact with the organization. These include social media platforms, websites, company application, email, and telephone services. The company will also have special considerations for customer feedback. For instance, it will carry out annual surveys to determine the changes in customer needs. Key Activities The company's key activities will include laundry cleaning, dry-cleaning, professional home cleaning, self-service washing experience, delivery, and equipment repair services. In terms of laundry cleaning, customers have three options: online delivery, self-service, and home-based. Online delivery allows customers to place orders for laundry to be picked and delivered once washed. Self-service washing experience is when customers visit our premises with a load of laundry. The company allows provisions for family and grouped washing experiences. A home-based experience is when our experts are dispatched to a client's location to offer services. Key Resources The critical resources for the business are grouped in four distinctive categories: physical, financial, intellectual, and human. The critical physical resource is the land on which our block-and-mortar facility will be based. Financial resources amount to $4 million consisting of $3 million from partnership contribution and $1 million from the external financial institution. The six partners form the basis of critical human resources because each is specialized to run each of the departments in the organization. The partners will cover key departments like IT, finance, legal, and sales and marketing. The six partners also form the intellectual resource of the company because the business idea was motivated by each partner's contribution of crucial expertise, experience, and educational background.  Key Partners The key partners in the organization are the six members of the presumed management heads. The six occupy the positions of CEO and departmental presidents. The key departments include electronics repair, finance, marketing, IT, and site supervision. Another key partner is the unnamed financial company that contributed 25% of the start-up capital. The company has identified strategic partners through which collaboration will enhance services. These include a partnership with detergents manufacturers, environmental protection agencies, sports entities, businesses in the hospitality industry. Cost Structure Table 1 in the appendix section is the estimated cost structure of the business proposal. The operations equipment category includes laundry and dry-cleaning equipment like washing machines, dryers, folding machines, and ironing equipment. The category consists of 45% of the capital. The facility customization segment is the second most costly category. It involves customizing the facility, including installation of machines, facility structure, outlook, and supplementary services like safe play areas and day-care facility. Other vital categories include pick and delivery transport, marketing, promotions, and cash reserve.  Revenue Structure The key segments of the business in terms of revenue are laundry, dry-cleaning, and equipment repair services. Estimations of revenue incomes are based on the projected income of $10 per kilogram of laundry (load). The same will cost $11 for dry-cleaning services. Based on the projections (table 2 in appendix), the company is expected to handle 800kg of laundry and 400kg of dry-cleaning loads throughout the 24 hours daily cycle. Figure two is a summary of necessary expenditures and net profit figures. Ethical Considerations The business does not cross significant ethical boundaries because of the targeted services it provides. The current trend indicates that compliance with sustainability requirements is a crucial challenge for the laundry industry because of the reliance on water and energy. These are two essential resources that are part of the global crisis. Another potential ethical consideration revolves around the potential damage to client garment(s) within our facility. The company's policy is that the company will refund any destruction caused on customer garments either by an employee or the company's equipment after a comprehensive investigation.   Conclusion Therefore, with a capital of $4 million, Kangaroo Laundry and Dry-Cleaning Services (KLDC) seeks to exploit the market niche ignored by contemporary players in the market. The market niche consists of low- and middle-income urban households, university and college students, and upcoming start-ups in the hospitality industry. The company's competitive advantage will include a focus on the washing experience and extra services people and families can enjoy while doing laundry. The current business model is based on the theory of relational development, which seeks to make the company continually adapt to the customers' needs. In the first year of operation, the company is projected to make a net profit of $1.8 million (table 2).   References Afifah, H. & Hudin, S. N., 2018. Customers' Use Intentions of Using Online Laundry Service. [Online] Available at: /publication/328838785_Customers'_Use_Intentions_of_Using_Online_Laundry_Service [Accessed 12 May 2021]. AIFS, 2017. Population and households. [Online] Available at: https://aifs.gov.au/facts-and-figures/population-and-households#:~:text=In%202016%2C%20families%20made%20up,from%2019%25%20to%2024%25. [Accessed 12 May 2021]. Chang, Y., Chien, C. & Shen, L.-F., 2021. Telecommuting during the coronavirus pandemic: Future time orientation as a mediator between proactive coping and perceived work productivity in two cultural samples. [Online] Available at: /pmc/articles/PMC7648512/ [Accessed 12 May 2021]. Craggs, G., 2017. Urbanization: Risks and Opportunities for Northern Australia Development. [Online] Available at: /publication/urbanisation-risks-opportunities-northern-australia-development/#:~:text=Urbanisation%20in%20Australia,will%20reach%2090.6%20per%20cent. [Accessed 12 May 2021]. Hassett, L. et al., 2021...