Question

Please give cite where you get information

1. Image you own a cleaning business. what would you do to forecast sales?

2. Why is forecasting vital to business success?

3. How would you structure a survey to gather relevant data fro you business.

4. What are some typical critical success factors for businesses?

5. What variables may impact salees fro a typical local business?

Answer 1

1. (i) Collect data of the number of households in the vicinity which can be easily serviced. As it is a local business, travel cost is a significant parameter

(ii) Conduct a survey of the proportion of households who may require cleaning service, and at what frequency they require that in a month. This information should be strategically collected so that all pockets (geographies) are equally covered. Based on this information, a ballpark figure of the manpower required to service them can be estimated. Hence, this is a critical information from the staffing point of view. A related part to this information is the expected growth of business with time due to referral leads being generated. Though there is no direct data point to capture it, but the business must provision for this increased demand over time.

To capture this information, the business can start a marketing campaign, either via telecalling or door to door visits, to see the initial response from the households.

2. Based on the forecasting the resources, both man and machine are allocated. As this is a fixed cost to the business, hence forecasting is the most critical part. Underestimating the demand can lead to poor servicing and hence bad reputation for the business, while overestimating can lead to higher costs and poor or negative profits.

3. As indicated in part 1, there are two kinds of information required. One is the total population size, which can be easily accessed. The survey is the most critical part. Multiple marketing campaigns can be designed, both ATL and BTL. Direct response activity can be planned to seek initial enquiries for cleaning needs. Pamphlets can be circulated via newspapers to see any incoming enquiries. The survey should be structured to capture all pockets over the entire target geography. The results may indicate some areas where there is higher percentage of people interested in cleaning services. As it is a new business, it would be good to focus initially there so that the break even point of the business can be achieved faster.

4. There are many parameters. One is, the customer acquisition cost. Marketing should be very systematically planned and in most cases, it is an infirmed guess work that how to maximize the ROI of such activities to translate into enquiries and sales. Several new businesses fail due to the impression that just by spending dollars, business will boom. Second important parameter is the authentic and timely delivery of product or service being advertised. A heavy mismatch of expectation vs reality can lead to poor word of mouth and hence decline of the new business. It is always good to promote realistically and deliver aggressively. Third critical parameter, as indicated above, is planning ahead. When a business is growing, it cannot leave even one enquiry go away unserviced. Hence, business needs to allocate a small reserve of its resources so that any spike in business can be attended to.

5. There can be several variables that may impact sales. One factor is how cluttered is the market with regards to the product or service in that geography. The business needs to identify its own niche and see that how it can create its own reputation in the presence of other players in the market. Another variable is the seasonality of the business, if it exists. It is almost a given that sales will not be constant throughout the year, based on the nature of offering. Business needs to identify that well in advance and plan for the lean season, so that resources can be adequately restructured. A third variable is the performance of its manpower. A motivated and trained manpower can be a boost for any business, and business needs to keep track that no major issues are there with regards to the last mile delivery of the product or service.