Write a 5 page essay on a start up Cleaning Service Company
1.Choose the legal form of organization for the business and support your choice.
2.Determine the organization structure that is needed initially to get the business operating, including the number of people necessary to get through the first year of operation, their job titles, and short job descriptions.
3.Propose at least three methods to encourage the employees to work together and build an effective brand.
4.Evaluate how your business will affect the various goals of the different stakeholders, including investors, employees, customers, and the community
5.Suggest a way to fund the business. Recommend how to attract equity investors.
6.Analyze how much of the funding should come from debt and how much from equity. Support your evaluation.
7. Determine the type of technology that is required to innovate this business to improve the growth and profitability of the organization.
Operating a Small Business
The most common business organizations include partnership, sole proprietorship, corporation, and Limited Liability companies. The business will benefit the most as a Limited Liability Company. LLC protects the owner’s assets. In terms of taxation, LLCs have the flexibility to select corporate taxation instead of general partnership taxation (“Advantages and Disadvantages of LLC vs. LLP,” n.d). Another advantage of the LLC is that the company has flexibility in choosing the management structure.
LLCs can specify the management structure, member contributions, member obligations, decisions, and how profits and losses will be handled. Many small, informal firms favor LLCs because of their ability to structure and control themselves, making them ideal for the selected company. Most importantly, state requirements do not restrict businesses in this industry from registering as LLCs. For these reasons, LLC is the best legal entity for the startup.
The startup will have a functional organizational structure. A study conducted by Rathgeber et al. (2017) showed that the functional structure is ideal for startups and organizations with less than 50 employees. In functional structures, the organization is divided into departments, and employees are allocated to these departments depending on their specialty. This startup company will have three departments: the marketing & sales department, operations, and administration department. The organization will also be flat, i.e., there will be no middle management between the executive and staff. All employees will report to the founder, who will serve as the company’s chief executive officer.
Therefore, the startup will have four employees: the operations manager, the sales person, the office administrator, and the CEO. The CEO will serve as the supervisor and provide the required leadership and managerial support. They will be responsible for making all the final strategic decisions. The salesperson will be responsible for sending out emails, posters, etc., setting phone appointments, networking sales, attending events, and making door-to-door visits. The administrator will work in the office, providing support to all employees and managing logistics functions.
It is well-established that employees’ behaviors play a significant role in a firm’s success. Customers’ perceptions of a product brand depend on the tangible features of the product. However, for a service brand, customer perception of the brand heavily depend on the behaviors of its company’s frontline workers. A cleaning company is a service brand, underscoring the need for the company to undertake initiatives to enhance employees’ brand-building behaviors.
Empirical research recommends using transformational leadership can nurture employees’ brand-building behaviors. Brand-building behaviors (BBB) refer to employees’ ability to maintain stable customer relationships. The frontline staff humanizes the service and helps customers develop an emotional connection to it. According to Mohart et al. (2009), organizations must retain the same employees for an extended time and allow customers to form an emotional attachment to their brands. Customers may have difficulty becoming attached to a brand when frontline workers keep changing (Mohart et al., 2009). Because transformational leadership is associated with low turnover rates, its leaders can use it to retain their workforce. Staff retention will allow employees to form long-term relationships and develop trust, affection, and closeness with the brand.
The company’s leader can use transformational leadership to influence employees to share their vision. Influencing employees to share in the leader’s vision is a core characteristic and capability of all transformational leaders (Mohart et al., 2009). When the leader influences the employees to share their vision, they will internalize and embrace the company’s values and ideals (Mohart et al., 2009). Consequently, they will behave in ways consistent with the brand promise. These behaviors will enhance customer satisfaction, which, in turn, can improve brand loyalty.
The second method of encouraging employees to work together and build an effective brand involves team-building activities. Team-building activities refer to efforts or initiatives to improve team cohesion and performance. This strategy mainly focuses on nurturing employees’ self-development, leadership skills, positive communication, and skills needed for team effectiveness. Team-building activities include creating a work culture where everyone understands that teamwork is better than individual performance. Managers must equip each member with effective communication and problem-solving skills to allow them to work well in teams. They must teach employees how to address conflicts that emanate from differences personalities, viewpoints, and working styles and accommodating each other’s needs. At the end of the team-building activity, each member must appreciate the role of collective group wisdom in making key decisions.
The third method involves appreciating the input of each employee. According to Kasinathan and Rajee (2011), managers can promote employees’ engagement in brand-related activities by valuing their input. The authors suggest that organizations must ensure employees know that their work makes a meaningful contribution to the organization. Strategies for employee engagement include, but are not limited to:
According to Kasinathan and Rajee (2011), these strategies improve the employees’ job satisfaction and commitment to the organization. The company can use these strategies to influence the employees to work toward promoting the brand’s agenda.
The business will meet the needs of its customers by providing them with quality cleaning services. The business will also improve clients’ quality of life by improving the conditions of the living environments. Employees often aim for financial and career growth. The business will contribute to employees’ career goals by enhancing their skillsets and competencies through training. It will also offer promotion opportunities as the business grows. The business will contribute to the community’s well-being by participating in corporate social activities such as cleaning various community parks or public spaces. The business will also generate profits, allowing investors to grow their investments.
One way to fund the startup is through venture capital investors. This funding option involves investing in a startup’s infrastructure or business activities until the business reaches sufficient size to be sold to a corporation or public equity markets to provide liquidity. This funding is provided by institutions such as financial firms, pension funds, university endowments, and insurance companies. The venture capitalist invests in the idea, nurtures it, and then exits the investment. Investors might expect a 25% – 35% every year over the investment’s lifetime.
Equity investors are attracted to businesses with higher chances of significant financial returns. The company can attract equity investors by demonstrating to the investors they have market leadership potential, that the business has a high likelihood of big financial returns, and has a clear exit strategy. To sell this idea to the investors, the company must prepare a due diligence analysis [examining financial statements, tax, and other legal liabilities] and write a comprehensive business plan.
Companies typically have two funding options: equity financing and debt financing. Equity financing is not associated with a repayment obligation and gives the company additional working capital to grow the business. The disadvantage of this financing method is that the company’s owner must give up part of the company’s ownership to the investor. Debt financing involves a repayment obligation, but the owner retains control and ownership of the company.
Industry 4.0 is making disruptive changes in the home-cleaning business industry. The Window Cleaning Warehouse (WCW) is a high-tech system that monitors and optimizes window-cleaning operations. The systems use vans with onboard water purification equipment instead of the bucket-ladder approach. The IoT-enabled devices will allow data sharing, giving homeowners the opportunities to monitor the service in real-time (King, 2020).
Other technological advances that will revolutionize the industry include customer relationship management systems (CRMs). This system will issue invoices, and automate billing and payroll processes and employee communication. Chatbots and virtual assistants will help automatically answer customers’ inquiries (King, 2020). The company can also use on-demand Apps to facilitate customer communication, promotions, subscriptions, multiple language offers, discount offers, GPS tracking, etc. These Apps will be available in smartphone formats allowing the company to collect payments from clients (King, 2020). This service personalization will improve customer experiences, which, in turn, will innovate the business and improve its growth.
References
Advantages and Disadvantages of LLC vs. LLP. (n.d.). Legal Zoom. https://faculty.ksu.edu.sa/sites/default/files/advantages_and_disadvantages_of_llc_vs._llp_legalzoom.pdf
Kasinathan. S., & Rajee, M. (2011). A study on Employee Engagement. Knowledge
Economy. 1(2). https://www.researchgate.net/publication/334044700_A_Study_on_Employee_Engagement
King, N. M. C. (2020). Future of Philippine online residential cleaning services: a technology foresight through scenario building. https://www.academia.edu/download/63441338/TM_299_-_project_report_-_KING_-_2604202020200527-15250-1wzczy1.pdf
Morhart, F. M., Herzog, W., & Tomczak, T. (2009). Brand-specific leadership: Turning employees into brand champions. Journal of Marketing, 73(5), 122-142. https://serval.unil.ch/resource/serval:BIB_08F6BBDEBDB6.P001/REF.pdf
Rathgeber, P., Gutmann, T., & Levasier, M. (2017). Organizational best practices of company builders–a qualitative study. THE ISM Journal of International Business. 1. https://www.researchgate.net/profile/Tobias-Gutmann/publication/328782800_Organizational_best_practices_of_company_builders_-_a_qualitative_study/links/600178e792851c13fe10e2d3/Organizational-best-practices-of-company-builders-a-qualitative-study.pdf
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