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HBS Business Plan Finalists – Fresh Maid

1. YOUR PITCH.
Fresh Maid is the first and only complete homemaking solution in the market. We provide housekeeping and laundry services to residents of large, high-rise buildings in Manhattan and other cities. The business operates like a hotel maid service, visiting clients 3-5 times per week at a rate competitive to what people already pay for bi-monthly service. We leverage that position to provide grocery shopping, pet care and other ancillary services to busy, stressed-out urban dwellers. In addition, Fresh Maid provides building managers and developers an inexpensive, value-added solution to help differentiate themselves in the face of declining rents and high vacancies in a crowded real estate market. The model thrives in dense urban areas, but can operate successfully in any large building or development across the country.

2. IDEA: WHAT SPARKED THE IDEA FOR YOUR BUSINESS PLAN?
My roommates and I were recovering from a long weekend and were disgusted by our filthy apartment. Pizza boxes were piling up, there were beer cans on the floor and the dishes hadn’t been done in days. Worst of all, we had just paid our housekeeper $80 two days before and he wasn’t coming back for 2 weeks. We figured there had to be a better way to spend that money – Fresh Maid was born. Our goal was to provide an alternative for roughly the same price of $40-50 per week. With Fresh Maid, our place could be cleaned 3 times per week for that price, and we would always come home to a clean apartment.

3. TARGET MARKET: WHO ARE YOU TARGETING? WHY?
Initially, we will target any urban dweller living in a large city. Our research shows that over 50% of people in Manhattan across age and demographic groups use a cleaning service. Two thirds of respondents to our survey would use a service similar to Fresh Maid. Further, married couples and single women are 10% more likely to use us – this is not just a service for 20-something males. In Manhattan, people are already spending in excess of $300 million on housekeeping, laundry and dry cleaning each year. We believe we can save people money while providing an easier, more effective solution to their problems.

4. CHALLENGES: WHAT DO YOU FORESEE AS THE BIGGEST CHALLENGE OR IMPEDIMENT IN REACHING COMMERCIAL VIABILITY/SUCCESS?
Given the fragmentation and lack of sophistication in the market, the lasting source of competitive advantage will be our dominant homemaking services brand. In order to stake out a defensible position, we will have to execute flawlessly and build scale quickly. While we had success at the retail level, this growth will involve a large institutional sales effort to building developers, REITs and managers, and it is something we have never done before.

5. FUNDING: IF YOUR TEAM WERE TO RECEIVE $100,000 IN FUNDING FOR YOUR BUSINESS TOMORROW, WHAT WOULD YOU DO WITH IT? WHAT IS THE MOST CRITICAL INVESTMENT YOU NEED TO MAKE IN ORDER TO GROW YOUR BUSINESS?
One of the first expenditures would be on back-end systems. In order to provide the unparalleled customer experience we promise and manage a complex array of services and third-party providers, we will need a sophisticated set of tools. In addition, we plan to fund working capital and recruit an experienced institutional salesperson to aid in the top-down selling effort. Beyond that, we do not need much more to get us to profitability. That’s the beauty of this business – once we have the infrastructure in place, its growth is almost completely self-funded.

6. TEAM:
Kyle Floberg and I started the business in 2007 and ground-tested our business model. We naturally complemented each other’s skills – I had a handle on the business and marketing side, while Kyle’s ability to execute on the ground was unmatched. Even so, we needed to bring on a third person to help craft the institutional sales strategy and provide a fresh perspective on systems and growth. In Arun Lamba (Sloan ’09), we found the perfect match. His contributions have taken Fresh Maid in a great new direction, and the three of us have exactly what it takes to get this business off the ground. In addition, our advisors – Dr. Jim Heskett and Robert Callan – have extensive experience in the service industry and managing janitorial services. Their advice and guidance have proven invaluable in helping us avoid some dangerous pitfalls along the way.

April 27, 2009
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