New Business Opportunities

What are the opportunities?

The Examiner has brought four possibilities into the Advance Information and any one of these can be in the real exam.

The opportunities are:

  • Computer equipment cleaning
  • Carpet cleaning
  • Window cleaning
  • Cleaning after floods, fire and storm damage.


To be able to answer the question set, you need to understand how the Examiner can bring these situations into the exam and the types of points you need to be considering.

How Can The Examiner Bring The Scenario Into The Exam?

The Examiner can bring these opportunities into the exam as follows, which we have listed in order of likelihood:

  1. An existing client (Tonto / Sports Venues / Upson College) wanting additional services. It is possible the Scour could set up this up in house or alternatively sub-contract the service to a third party.
  2. A new client tender requiring commercial cleaning and another service. Again this lends itself to being an option between in-house or sub-contract.
  3. Developing a relationship with an existing provider of one of the new opportunities and joint tendering.
  4. Opportunity to take over a company already providing the new service - it is likely there will be some joint clients as well as new clients who also require commercial cleaning.


However, the opportunity is presented, the process for answering is similar.

The Approach To Adopt

It is important to complete the numerical analysis. It is a minimum of 2 boxes on the key and could be 3 boxes. If you do not do the numberical analysis, it will make it very difficult to pass R3.

You should consider two of the key assumptions you have used in your calculation and include these in your answer.

You then need to consider the information the Examiner has provided you in the Exhibits and consider why this information has been presented to you and what point the Examiner is wanting you to make. 

You should also consider how this opportuntiy will impact the SWOT, PESTEL, 5-Forces.

Our following list is generic, so it comes with our usual health warning that you MUST consider the new information on the day and not rely on this list! (If you are viewing this on a mobile phone, turn it landscape so you can better read the following table)

Area In-house Sub-Contract
Financial Issues to Consider

1) Experience required - have the existing cleaners got this? Can they be trained?

2) Recruitment costs

3) Training costs need to be considered

4) Idle time - all opportunities are more ad-hoc than commercial cleaning meaning idle time could be a problem until there are a number of new clients

5) Idle time could be more of an issue with flood / fires / storm option

6) Supervisors - similar issue of experience / training / recruitment

7) Compare gross profit margins achieved to existing business

8) Length of contract - is it longer than the short term commercial cleaning contracts?

9) Break clauses / SLCs to consider - these can increase the risk of the project

1) Available experienced staff

2) No recruitment costs

3) No training costs (minimal if sub-contractor adopting Scour Promise)

4) Idle time covered by sub-contractor

5) Likely higher contract cost so lower margin / no-margin for Scour (compare to existing business)

6) Payment terms to sub-contractor differ (quicker) to receipts from Scour's customer

7) Cross-selling opportunities with sub-contractors clients being introduced to Scour / vice versa.
Operational Issues to Consider
 1) Managing new cleaners to minimise idle time

2) Use of JobScour - can it be used in new sector?

3) Can Thom provide the products? Will new supplier be required?

4) Limited management team experience

5) Timescales to establish new service - are these achievable?

6) Location of new service - within current area (most likely)

7) Knowledge during tenders limited / require significant management time

8) Staff turnover - if cleaners can be trained in new service, then could help provide element of promotion

9) Suitable business measures required (recommendation?)

 1) Management of sub-contractor relationship

2) Can the sub-contractor meet Scour's customer's requirements?

3) Easier to establish new service more quickly via sub-contractor

4) Geographical spread of sub-contractor to be considered (also re-franchise below)

5) Provide specialist knowledge during tender process
Strategic Issues to Consider
 1) Helps to diversify revenue stream (Both options e.g. In-house / Sub-contract)

2) Future tenders - allow access to other tenders (Both options)

3) Compete with Goodglow (see below for comments on Goodglow)

4) Impact on reputation if not performed to the same level as commercial cleaning

5) If new supplier is required for the opportunity, do they have the same strategic fit e.g. environmental etc.

6) Owned operations will have a different offering to Franchise network.

7) Can the new service be easily expanded to the franchise network?

8) If the new opportunity is costly, how will franchise network afford and adopt new service?

1) Suitability of products used by sub-contractor (environmentally friendly / good supplier)

2) Will they adopt the Scour Promise?

3) Similar ethos to Scour?

4) Experience may make reputational risk lower

5) Sub-contractor, if nationwide, could assist with roll out into Franchise network too

The Likelihood Of Goodglow

As we mentioned Goodglow, we thought we would add our thoughts on the importance of this competitor.

Goodglow is the only competitor who the Examiner has specifically mentioned a second region. As well as competing directly in the West Of England (Owned Operations region), they also have established a second region in the East Midlands. This happens to be the same region as Tracy Harris and Leicester 1.

So why is this important?

Firstly, Goodglow DO NOT have a franchise network and some customers may also not wish to have a franchisee involved in its cleaning services.

This sets up a nice scenario where a new contract, expanding into Leicester region is to be fully serviced by Owned Operations or jointly performed and include the franchise network (Tracy Harris). If Goodglow are also bidding, how will this impact Scour's decision?

Secondly, if Scour is losing business to Goodglow, due to Goodglow offering more services, then it becomes more important to consider expanding into a new stream and also rolling this out to the East Midlands to help protect the Leicester franchises.

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