At the GCSBDC, we believe in celebrating all successes, small and large.  One of our clients, Carolyn O'Hara,  experienced a successful launch of her new business, ANEW CRR.  CRR stands for cleaning, renovation, and repairs.   Although the cleaning service business is quite competitive, she has been able to attract three commercial jobs since November, and has already secured one recurring commercial contract.  The owner like so many others during 2009 lost the administrative management job that she had held for more than fifteen years.  Although she diligently searched for work, she ultimately reached the conclusion that she would have to create a future for herself by starting her own business. She did a personal inventory, and gave much thought to her own strengths and weaknesses.  She worked with her SBDC consultant to do a SWOT analysis for her proposed business.  Many business consultants recommend SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) as a basic assessment of feasibility.

 

 Strengths:  Working with her SBDC business consultant, she realized that she had strong administrative and management skills and a very good understanding of the proper way to clean almost anything.  She also realized that she could make much more money providing housekeeping, business cleaning, and related services through running teams of skilled workers than she could ever make on her own.  A further strength lay in her ability to market, network, and expand the service offerings.  Her innate creativity lead her to develop a new concept...combining cleaning services with repair and restoration services, reasoning that there was a natural synergy between these commonly required services.  Other research led her to believe that the market for cleaning services would be strong in Galveston County for the foreseeable future.

 

Weaknesses:  One weakness of existing services is a lack of dependable, trustworthy labor to perform the service.  Relying on her networking skills, she was able to locate skilled tradesmen with whom she could partner for mutual referrals.  She requires that all her contractor referrals be licensed and insured, and that her cleaning personnel be tested for drugs and vetted through a background check.  She also located a pool of people willing to perform cleaning services to her rigorous standards.  Another weakness of existing cleaning services is a failure to apply good business management practices, such as planning, marketing, accounting, risk management, and human resource management. 

 

Opportunity:  She performed a small scale market survey to determine the feasibility of her new business.  She determined that many homes in Galveston County are owned by two workers.  She also learned that the Galveston Bay Area is one of the largest pleasure boating centers in the country.  There is also a significant number of resort homes owned by absentee owners.  She decided to offer services catering to these niche markets: boat cleaning and "make ready"; resort home cleaning and "butler services," buying groceries and turning on the air-conditioners, opening the house, and getting it ready for either the owners or renters; and providing a number of services for working wives and moms, such as running errands, coordinating repair services, or chauffeuring the kids.  Galveston Island is host to many festivals and events, such as Mardi Gras, Dickens on the Strand, and conventions that provide opportunities for contract cleaning services.

 

Threats: The two major threats identified in pre-start research were competition from other cleaning services and generalized consumer fears regarding the economy that might limit non-essential spending.

 

By performing a thorough SWOT analysis, our client was able to get her business off to a successful launch armed with a plan and a better understanding of the basics of her business.  To contact ANEW CRR, call 409-795-8878

 

Professor  Martin Hahn on Market Segmentation: 

 

This week the SBDC hosted the monthly "Lunch and Learn" featuring a video lesson on cash flow management from Dave Ramsey, operator of Financial Peace University.  Although Mr. Ramsey's lesson targeted individuals and spoke very powerfully to the necessity of good cash flow management for personal financial peace, the principles are the same for business as well.  Indeed, our SBDC consultants will often ask a prospective business owner to provide a copy of their personal household budget as a starting point for a discussion of the financial requirements of their business.   At a minimum, your business should generate enough income to cover your household.  Ideally, it should do much more.  Budgeting is a word that some people associate with restrictions.  In truth, budgeting and planning exactly how you are going to spend your money results in more freedom, less stress, and less management by crisis.  The point that Mr. Ramsey makes holds true for business as well as family financial management..."If you don't manage your money, you'll be left wondering where it all went."