Cleaning Charlie After graduating from a diploma of business administration in Victoria, BC, Charlie got hired as an executive assistant to Francine, the HR Director of a local manufacturing company. He has been working at the job for the past three months. His role includes scheduling and attending meetings, sending emails, and coordinating interviews and applications on job opportunities. He works part-time 3 days a week from 8:30 am to 4:00 pm and is paid about $38,000 a year. During his free time, Charlie volunteers as a cleaner for a non-for-profit organization called Harmony Caregiving. The organization supports seniors to age-in-place helping to keep their homes clean. The organization is run by donations made possible by large corporate donors and community partners, as well as volunteers like Charlie. Although he enjoys the structure of the corporate environment, Charlie feels much more satisfied by his volunteer work with Harmony Caregiving. Sensing that he may not be happy in his assistant job, Francine has offered Charlie a full-time position with the company, upping his salary to $62,400 per year plus benefits which equal approximately 18% of his salary (paid vacation, pension, medical and dental benefits etc.). At the same time, due to his enthusiasm and great effort at Harmony Caregiving, the President of the non-for-profit organization has offered him a full-time position in the advancement (donation) department. This position would entail working directly with prospective and existing donors. His starting wage would be $20 an hour but he would be entitled to a 5% bonus equal to all new donations he brought in. Even though Charlie is excited about both offers, he has always wanted to work for himself. Therefore, he is contemplating starting his own cleaning business. Charlie sees a trend of individuals getting busier, and consequently, lacking the time or energy to keep their homes clean and organized. With his home cleaning/organizing business, he could help people maintain tidy and organized homes. To kick things off, he has done some research and gathered some numbers. Admittedly, accounting was his worst subject in his diploma, so he is seeking your help in analyzing his options. If he were to start her own housekeeping business, Charlie forecasts these figures: Type Cost Frequency Average Time Tasks House cleaning for individuals $70/hour Once a week 2 hours General Housekeeping, dusting, bathrooms, kitchen deep scrub, mopping floors, and vacuuming. Professional organizing $50/hour As needed Minimum of 4 hours Organizing pantries, garages, closets etc., setting up a home after a move, packing and decluttering Estate organizing $1,200 per job As needed 3 days Clean out homes of seniors needing to downsize, moving to continuing care or recently deceased, donating and recycling generic non sentimental goods to make the job more manageable for family members Social media content $50 to $100 per post 3 5 week 2 hours to create and edit Record and edit content, engage with audience Charlie estimates that, based on his existing connections and some word-of-mouth marketing, he can generate some quick success in his first year on the physical cleaning and organizing business. He believes he can book 15 individual houses and 3 professional organizing jobs on a weekly basis, and 1 2 estate organizing jobs a month. For the social media content, Charlie has researched that influencers with more than 1,000 followers may be attractive for brands advertising their products. Charlie has casually been creating social media content for years, and wonders if he could turn the cleaning business into an avenue to attract more social media followers to monetize his social media posts. He currently has 750 followers, and estimates that he would need six months of professional posting (2 hours per post of creating and editing time) before he could start to attract advertisers and monetize his social media content. He informs you his ideal workweek includes 30 hours of client work (plus commuting and administrative work). He is wondering about her companys service mix and how it can be used to maximize revenues in relation to the work hours invested. He is also wondering if it better to charge per hour or on a per project basis. To get his business started, Charlie will need about $500 in supplies including gloves, masks, cleaning material, dusters, garbage bags, liquid bleach, labels and the like. He will likely need to replenish these supplies once a month. Charlie has saved $5,000 to invest in the business. He currently uses public transport but wants to purchase a gas vehicle to drive to and from various places and to help carry his supplies. He is thinking about doing a pros and cons analysis of purchasing versus leasing a vehicle. He has found a 2019 used car on sale for $17,500 but he is also looking at maybe leasing a hybrid vehicle on a three year lease, 24,000 kms from the dealership for $269 a month at 5.99% interest with $3,000 as a down payment. If he were to buy a vehicle he thinks it would be useful for 5 years. Charlie is also planning to purchase an industrial vacuum cleaner for $1,800. Hes unsure how the vacuum and vehicle would be reflected in his financial records. Charlie is looking into different methods of online scheduling to reduce administrative time and believes the best method is to start a website with an online booking capability. He has a friend, Tamara, who is a tech wiz and is willing to help create and host a website for a one-time fee of $2,500 and an annual licensing fee for the scheduling software of $200. With the additional investment in online scheduling, Charlie expects the number of customers to increase by 25% for each type of service. Tamara has also offered to be brought on as a 33% business partner and is willing to cover the cost of creating the website and the advertising costs with Google as well as taking on the bookkeeping for the business. Charlie is uncertain if he should accept Tamaras offer. She worked a few summers at H&R Block but does not have a formal accounting background. Charlie wonders if it might be less expensive to hire a bookkeeper? Or if he brought Tamara on, what business structure would be best? If Charlie needs more money than his initial savings, he has spoken to the bank and it is willing to provide her with two products: a) a 7-year loan of $20,000 at 7.25% per year requiring monthly repayments, or b) a revolving line of credit of $18,000 at 7.00% per year Charlie wants a detailed analysis on how much he would need to borrow and which structure is better for him. He doesnt understand the difference between a business loan and a line of credit, so an explanation there would also help. Since Charlie is not great with projections and numbers, he is asking you for help in deciding if this business is lucrative enough to pursue and if he should quit his executive assistant job and/or volunteer role. Charlie wants specific advice on what he should do. He wants to know if pursuing Charlie's Cleaning business is a good idea or if he should accept one of the other jobs offers on the table, as well as the other questions he thought of as he was describing the business to you.

Prepare a business memo to the client (in Word) with all supporting calculations in an appendix. Your memo should talk about the primary issues raised in the case study. The assignment should be written as a business memo with language appropriate for the audience (client).