Kitty owns a maid service, which is the largest in the Billings, Montana area capturing 30% of the market and is known for having excellent service. She purchased the business seven years ago. The business started out as a success and the sales rose 56% in the first year. However, recently gross income had declined and profits and cash flows had recovered only a little since a dramatic drop.
             Kitty's Maids were bonded and insured and the company supplied everything to the cleaning crews. The service had 70 to 75 regular customers, 75% were repeat and 25% for special projects. First time customers, for one person cleaning was $20/hr and repeat $16/hr. Kitty marketed the business in newspapers, fliers, yellow pages and the radio.
             Kitty paid her employees from the time they left the office until they returned, not including lunch, so travel time was an important issue. Driving time added about 10% to the cost of doing business. Kitty's cleaning specialists were paid $4.50/hr and training supervisors received $6/hr. There is very high employee turnover with most employees staying only a few weeks to three months.
             There are six other competitors and many "shadow competitors," that were part of a family and undercut Kitty's price by 50-60%, this hurt her profitability. Kitty's insurance premiums had also risen also there were many workers compensation cases that cost $15,000 in disability. Kitty could use a Professional Employer Organization that would provide Kitty with many benefits, lower premiums, lower workers' comp, etc.
             Some of her options were a strategic evaluation, sell the business, target real estate market, find janitorial contracts, do market survey research, find a way to give employees more satisfaction, change market image, and database management to selectively access customer profiles and needs.
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