How to Create a Business Model for Your Cleaning Service

How to Create a Business Model for Your Cleaning Service

Deciding Which Business Model is Right for Your Cleaning Service

In the competitive world of cleaning services, businesses often struggle to decide which services to add or remove from their offerings. With diverse services ranging from carpet cleaning, deep cleaning, marble polishing, floor care, hardwood floors to window washing, making these decisions can be challenging.

A business model scorecard can be a powerful tool to evaluate and prioritize various services based on key criteria. This blog will guide you through creating a comprehensive scorecard, helping you make informed decisions to optimize your service offerings.

 

What is a Business Model Scorecard?

A business model scorecard is a strategic tool that helps businesses evaluate the viability and potential success of different services. By assessing various factors such as customer acquisition costs, revenue potential, and long-term profitability, you can make data-driven decisions about which services to focus on and which to reconsider.

 

 

Graphs displaying sales, cash flow, and profit metrics for a cleaning service business.

Creating a Business Model Scorecard for Cleaning Services

To create an effective scorecard, consider the following criteria, each rated on a scale of 1 (difficult) to 3 (easy):

  1. Customers

    • Number needed: How many customers are required to make the service viable?
      • Score: 1 (many), 2 (moderate), 3 (few)
    • Ease of finding: How easy is it to identify and reach potential customers?
      • Score: 1 (difficult), 2 (average), 3 (easy)
    • Buying patterns: How predictable and consistent are customer purchasing habits?
      • Score: 1 (unpredictable), 2 (somewhat predictable), 3 (consistent)
  2. Customer Value

    • $ revenue: What is the revenue potential per customer?
      • Score: 1 (low), 2 (moderate), 3 (high)
    • Repeat sales: How likely are customers to make repeat purchases?
      • Score: 1 (unlikely), 2 (possible), 3 (very likely)
    • Ongoing support: How much ongoing support is required?
      • Score: 1 (high), 2 (moderate), 3 (low)
  3. Sales

    • How important: How critical is this service to the overall business strategy?
      • Score: 1 (not important), 2 (important), 3 (very important)
    • Competitive advantage: How much of a competitive advantage does this service provide?
      • Score: 1 (low), 2 (moderate), 3 (high)
    • Price versus Value: How well does the service price align with the value provided to customers?
      • Score: 1 (poor alignment), 2 (average alignment), 3 (excellent alignment)
  4. Customer Acquisition Cost

    • Entry Cost: What is the cost to acquire a new customer for this service?
      • Score: 1 (high), 2 (moderate), 3 (low)
    • Support after sale: How much support is needed after the sale?
      • Score: 1 (high), 2 (moderate), 3 (low)
    • Advertising needed: How much advertising is required to promote the service?
      • Score: 1 (high), 2 (moderate), 3 (low)
  5. Long Term

    • Profit margin: What is the profit margin for this service?
      • Score: 1 (low), 2 (moderate), 3 (high)
    • Up-selling and cross-selling: How much potential is there for up-selling and cross-selling?
      • Score: 1 (low), 2 (moderate), 3 (high)
    • Ongoing cost: What are the ongoing costs associated with the service?
      • Score: 1 (high), 2 (moderate), 3 (low)
  6. Investment

    • Entry: What is the initial investment required for this service?
      • Score: 1 (high), 2 (moderate), 3 (low)
    • Keep market share: How much investment is needed to maintain market share?
      • Score: 1 (high), 2 (moderate), 3 (low)
    • To stay ahead of competitors: What level of investment is required to stay ahead of competitors?
      • Score: 1 (high), 2 (moderate), 3 (low)
    • Training Cost: What is the cost of training staff for this service?
      • Score: 1 (high), 2 (moderate), 3 (low)

 

 

Business Model Scorecard for Cleaning Services

Business Model Scorecard for Cleaning Services

Criteria Description Carpet Cleaning Window Washing Office Cleaning
Number needed How many customers are required to make the service viable? 3 2 3
Ease of finding How easy is it to identify and reach potential customers? 3 2 3
Buying patterns How predictable and consistent are customer purchasing habits? 3 2 3
$ revenue What is the revenue potential per customer? 3 2 3
Repeat sales How likely are customers to make repeat purchases? 3 2 3
Ongoing support How much ongoing support is required? 2 2 3
How important How critical is this service to the overall business strategy? 3 2 3
Competitive advantage How much of a competitive advantage does this service provide? 3 2 3
Price vs Value How well does the service price align with the value provided to customers? 3 2 3
Entry Cost What is the cost to acquire a new customer for this service? 3 2 3
Support after sale How much support is needed after the sale? 3 2 3
Advertising needed How much advertising is required to promote the service? 2 2 3
Profit margin What is the profit margin for this service? 3 2 3
Up-sell/Cross-sell How much potential is there for up-selling and cross-selling? 3 2 3
Ongoing cost What are the ongoing costs associated with the service? 3 2 3
Entry What is the initial investment required for this service? 3 2 3
Keep market share How much investment is needed to maintain market share? 3 2 3
To stay ahead What level of investment is required to stay ahead of competitors? 3 2 3
Training Cost What is the cost of training staff for this service? 3 2 3
Total Score 59 42 60

Using the Scorecard

  1. List all the services you are evaluating.
  2. Rate each service on each criterion from 1 to 3.
  3. Sum the scores for each service.
  4. Services with the highest scores are generally the most favorable to keep or add, while those with the lowest scores might be candidates for reevaluation or removal.

Example

Let’s take a look at an example to illustrate how this scorecard works. Assume we are evaluating three services: Carpet Cleaning, Window Washing, and Office Cleaning.

 

 

Business Model Scorecard

Business Model Scorecard for Cleaning Services

Service Total Score Decision
Carpet Cleaning 59 Yes (Optimal Success)
Window Washing 42 Consider (Moderate Potential)
Office Cleaning 60 Yes (Optimal Success)

Determining the Threshold for Success

  • High Potential Services: Services with scores close to the maximum (e.g., above 50) are likely to be highly favorable. These services typically have high ease, profitability, and strategic importance.
  • Moderate Potential Services: Services scoring between 38 and 50 may still be viable but might require more resources or have some challenges that need addressing.
  • Low Potential Services: Services scoring below 38 might face significant challenges or offer lower returns and could be candidates for reevaluation or removal.

Based on this approach:

  • Yes (Optimal Success): Services scoring above 50.
  • Consider (Moderate Potential): Services scoring between 38 and 50.
  • No (Low Potential): Services scoring below 38.

 

 

Final Thoughts

A business model scorecard is a valuable tool for cleaning services looking to optimize their offerings.

By evaluating each service based on key criteria, you can make informed decisions that align with your business goals. Regularly updating and reviewing your scorecard will help you adapt to changing market conditions and continue to offer services that meet customer needs and drive profitability.

By implementing this systematic approach, you can ensure that your cleaning business focuses on the most promising and profitable services, setting yourself up for long-term success.