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Key-Rank Services (KRS) is considered a new cleaning service specializing in office cleaning. Categorised as one of Malaysian SME, established in 1994, the business offers office cleaning, floor treatment, carpet cleaning, and window cleaning for businesses in Klang Valley prior to diversification of business from fire fighting industry. The business was founded by Mohd Ali, who managed to pool related resources to develop a new strategy for reaching and serving business clients. The business operates out of a central office and storage facility and use the labour of trained cleaning crews to serve clients.
Services offered will be based around basic office cleaning scheduled on a daily basis, which will be offered with extreme care for the client's privacy, security, and assets. KRS offers services that are environmentally friendly, both in the products used and in their methods of disposal. KRS practises recycling dumping and wastage by sorting out the dumping collection daily into appropriate bins provided. According to its General Manager, this is one of the ways for a small and medium size company to contribute to the general environmental issue.
KRS seeks to establish itself as a leader in office cleaning in Klang Valley area. Specific objectives over the next two years include:
To build a substantial client list encompass Malaysian Government agency and private client
To build a suitable operations infrastructure, including a central headquarters, cleaning chemical warehouse, 4 delivery vans, professional management, and documented processes for operations and cleaning practices.
To build healthy gross margins by establishing itself as a significant buyer and reducing vendor pricing on cleaning supplies
Training low-cost labour to be more productive.
To create a culture of productivity and resourcefulness for all staff by encouraging the best ideas and cleaning procedures
Rewarding cleaning crew for their contributions by promoting monthly best cleaning crew
KRS seeks to ensure that they always have an ability to guarantee customer satisfaction. The company values its employees to establish a comfort working environment, listens to the needs of its client, accomplish the clients required job, and try to respond to the environment demands.
KRS is an office cleaning business located in Klang Valley, Malaysia. Established in 1994, the business currently offers office cleaning, floor treatment, carpet cleaning, and window cleaning for businesses with office space in the Kajang. The business was initially founded by Mohd Ali and fifteen years after the establishment an additional investment has been contributed by Nassir Ahmad who injected some other capital and owns 35% of the business. Ever since the additional investment, KRS totally navigated their core business into cleaning.
The start-up expenses for the business reflect the legal permitting required from the Finance Ministry and Malaysian Registrar of Company the legal agreements with additional investors and banks for financing, two month's security deposit at an estimated Ringgit Malaysia (RM) 1500 per month and one month's rent for improvements to the office and storage facility. Assets which must be purchased include office furniture and computers for the office, cleaning equipment including buffing machines, vacuums, and basic tools (mops, brooms, buckets, etc), and one delivery van. Some of the larger pieces equipment is purchased via vendor leased scheme and hire purchase, such as the buffing machines and delivery van. Other necessary cleaning tools are paid by cash.
Start up expenses
RM (Ringgit Malaysia)
Stationery and Office supplies
Computer and IT
Start Up Asset
Other Current Assets
Services offered by KRS focus specifically on office spaces and include:
Office cleaning (including garbage removal, dusting and cleaning of all surfaces, sweeping and mopping of floors, and cleaning of doors and walls as needed)
Market Analysis Summary
A strategic market analysis allows SME (small medium enterprises) companies to align their strategy to the turbulent external environment in marketplace. The target market for office cleaning in Klang Valley area includes small offices (1-5 employees), medium offices (6-20 employees) and large offices (21 employees and up). As the service sector in Klang Valley increase, businesses with offices are also growing.
In Klang Valley, small offices dominate the office building population by double the number of medium and large offices. Large offices only comprise of one fifth out of the whole population. Hence, KRS is wisely planning their business strategy by focusing more on small offie.
Target Market Segment Strategy
KRS historically build its expertise from the ground, by building a successful base of small-office cabin in Shah Alam to serve the construction sites clearing and cleaning needs. By working with smaller clients first, the business established a foothold faster as they will not be competing directly with established cleaning companies, and thus enable KRS to perform through economies of scale and tight operations. KRS limit their service for individual property or residential owner. By concentrating to serve and specializing in commercial office cleaning, KRS will increase its ability to market to the many thousands of area businesses directly. There are many offices cleaning industry which includes local companies as well as some multinational franchises. KRS marketing strategy begins with its initial target market of small offices Customers normally seek out cleaning services based on a combination of reputation, price, locations and services offered. While large offices value performance of services, smaller firmsÂÂ put a greater value on price. Special and highly targeted clients are government agencies but these prospects need to go through governments bidding contracts. In order to capture with the biding war, KRS fulfilled the necessity of major Malaysian government biding requirement. Among the requirement are, company has to have a bumiputera  status, registered with Ministry of Finance under certain special heading particularly for cleaning services, registered with Contractor Service Centre and etc. Promotional activities include distributing company pamphlets and newsletter into offices post box, prospecting by phone to target potential clients, followed by sending company profiles, clinging for business networking and using free social webs advertisement.
Cleaning services involved huge manpower as the ultimate resources. Thus personnel plan is crucial to avoid any unnecessary cleaning crew and to maintain sufficient resources capacity at any point of time. Cleaning crew wages comprise almost two third of operating expenses. Crewsââ‚¬â„¢ wages includes SOCSO (social security organisation charge for acting for staff insurance) and employee provident fund (Malaysian social security scheme for future saving).The business will begin with minimal salaried staff, with most work performed by the two founders. The number of cleaning crew hired would depend on the project capacity and numbers. Hence wages crew cost is varies with the cleaning task. The founders will be compensated through reasonable base salaries and will receive compensation through profit sharing and the growth of the business. A finance executive will serve the role of Chief Financial Officer (CFO) in charge all cash flow and business funding operation. Another finance assistant will be a basic assistant focusing on the business transaction keeping necessity. An administrative staff responsible for fulfilment of cleaning services, scheduling, quality assurance procedures, and human resources needs. Cleaning crew will be headed by a supervisor for every large capacity project normally for bigger organisation (10 cleaning crews and above). For any small and medium project (less than 10 cleaning crews needed), the task will ne monitored remotely by the administrative staff.
Cleaning crews consists of total full-time crews and part timers who work on an hourly basis and have their payroll assigned as costs of sales. All of these hourly staff will be hired at a higher hourly charge (compared to fulltime crew if their wages is being pro rated) but their overtime will be limited. The business prefers hire additional employees rather than use significant overtime. Crew heads will receive performance ratings from the company managers and clients to determine their yearly bonuses. It is the companyââ‚¬â„¢s plan once it reaches a sustainable level of profitability, the owners want to offer a health benefits plan for their employees, but this is not included within the plan's estimated expenses at this time.
Start-up funding will come in part from the financing of the initial purchases (delivery van, computer and cleaning equipment), and from credit card debt. Beyond this debt financing, most start-up funding will be provided by sole founder Mohd Ali and Nassir Ahmad as additional investors plus a special additional investors whom did not claim any equity rights.
Start up Expenses to fund RM29,500
Start up Asset to fund RM95,000
Total Funding Required RM124,500
In future KRS plans to introduce residential cleaning services, where a target residential area will be offered a house cleaner. The charge will be based on hourly basis and the cleaning routines will be discussed by KRS with the clients in details. KRS believe this sort of plan will not only boost their operating revenue but this also implies how their business cares about todayââ‚¬â„¢s social and community needs. With a lot of maid and house helper issues arise in Malaysia such as criminal cases, maid ran away, unfair pay to house helper, child abuses and a lot more, KRS plan will definitely settle house owners nightmare by offering day house cleaning with a close supervision by the company.
Appendix 1: Cleaning Chemical consumed for cleaning projects
Cleaning Product Description
Super Mosaic Cleaner (SMC)
Effectively removes stubborn stains in both industrial and institutional cleaning applications
Liquid Germicidal Air Freshener
Deodoriser to counter odour and refreshes with pleasant fragrance. Reduces air-borne bacteria which causes odour. Serves also as a disinfectant for floors while leaves a refreshing scent.
Solvent is a heavy duty self-emulsifiable solvent. It will effectively emulsify and dissolve all greasy oily esidues easy removal with water from all hard surfaces.
Tile & Concrete Sealer
Tile & Concrete Sealer, is based on a modified thermoplastic acrylic emulsion polymer with excellent adhesion, excellent chemical resistance and protective when applied on concrete substrate or on resilient tile. CTS excellent adhesion property even extend to old concrete floors which have been cleaned, but still retain some embedded dirt or oil. When use as resilient tile sealer, CTS shows good wear, gloss and leveling properties, along with excellent water and detergent resistance. It also gives excellent compatibility with floor polish
Known as MP, a water based concentrated powerful neutral multipurpose cleaner formulated using mild biodegradable raw material.
Pearly Handy Soap (PHS)
Hand soap is a concentrated, pearlized with lotion and perfumed hand shampoo. Thus it cleans well but protect gentle skin. Contain no harmful or harsh chemicals.
Acidic Toilet Bowl Cleaner (ATBC)
An effective easy to use Cleaner for urinal and toilet bowl in household and industrial environment. Exceptional cleaning ability - easy removal of rust, organic and inorganic sediments leaving surfaces shinning and clean. Disinfecting - disinfection in the presence of organic matter. Deodoriser - eliminates unpleasant odours.
Alkaline Coil Cleaner
This is specially formulated for cleaning air conditioner coil. It easily remover rust, scale and carbonate built up in air conditioning units. Able to cleans coils to sparkling finish clean like new and harmless.
Glass Cleaner (GC)
Glass cleaner cleans glass wall and window surfaces , mirrors, showcases, glass shelves with ease without any streaking or spotting marks. It is fast drying and non rinsing leaving the glass surfaces sparkling and spotless
Appendix 2: Example of KRS cleaning project monthly costing (by marginal costing)
Key Rank Services Sdn Bhd
Cleaning Project for Youth Hostel, Kuala Lumpur.
Contribution Margin Income Statement
For the month of July 2009
Project Price 32,000.00
Less: Cleaning Crew Wagesa 8037.00
Cleaning chemicalsb 678.00
Cleaning Direct Expensesc 1050.50
Variable Overheadd 820.00
Contribution Margin 21,414.50
Less: Fixed Expensese 18,430.00
Net operating Profit 2984.50
9 Cleaning Crews are paid RM800 each month plus RM9 for SOCSO and EPF employer contribution.
SMC: 1 drum @ RM174, PHS: 5 bottles @ RM12/unit, MP: 3 pails @ RM 88/pail, ATBC: 4 bottles @ RM25/bottle and GC: 10 units @ RM8/unit.
Gloves: 270 pcs @ RM0.50/pcs; garbage plastic container: 10 plastic/day @ RM170/2000pcs, mops: 5 @ RM9/mops : brooms: 5 @ RM6/broom , buffing machine pads: 2 pcs @ RM150/10pcs; van fuels RM800
Buffing machines lease finance RM 470, cleaning equipments hire purchase 350
Office rental @ RM1550; Office staffs salary RM5400; Supervisors (3 x RM1600=4800) and Mohd Ali and Nassir Ahmad monthly remuneration RM3000 each), van hire purchase RM680