In order to calculate this figure accurately, you'll have to identify every expense component of your project for which you will incur costs from the moment of project conception to the day you open the doors and beyond to cover operating expense while you ramp up business operations. The First thing you'll have to consider is whether you're going to Rent or you're going to Build and Own a New Facility, but in either case you'll have to consider quite a number of other factors to develop an accurate start up expense projection. Our Pet Care Business Development Library guides you through this process. Completeness and Accuracy is Critical, because if you fail to include one essential component, or fail to accurately project costs, you could face significant unanticipated costs of tens of thousands of dollars. But for the sake of example, let's consider two examples of determining start up expenses, the first for Renting, and the second for Building and Owning a new facility. Keep in mind these are only examples and that particular expenses for each project will be unique.
1. Rent a 6000 square foot building for which you'll have to extensively renovate the interior to accommodate your 50 Pet Guest Dog Day Care Facility. Construction renovation Costs vary from region to region, and of course the challenges you'll face will vary from property to property. Nevertheless, if you calculate acquisition costs, security deposits, interior renovation costs, employee training, supplies, playground equipment, and use a factor of $75 per square foot, you should be able to project realistically what your start up expenses will be. So in this example, 6,000 x $75 square foot = $450,000. Think this is way too much ? Think again. There will Legal Fees, Real Estate commissions, Architectural Fees, Hard Construction Costs, Kennel Containment Systems, Bathing and Grooming Equipment Costs, Office Equipment, Computers, Software, Pet Supplies, Food, ID Tags, Specialty Equipment Costs, Employee Training Costs, Loan Fees, Operating Capital, and a lot more. The goal here is to be inclusive. Don't fail to anticipate each and every expense you might incur. If you don't include every possible cost in your startup expense summary, the Banker or Investor will inevitably ask why not, and you won't have the credibility to invest in. If you're fortunate enough to find a property which is more suited to your business operation and doesn't require the renovations or infusion of capital you project, then that's great, you'll have a greater reserve, but you will have at least considered all expense possibilities.
2. Build a 6,000 square foot facility for which you must take out a loan to purchase land, design a building, construct it, furnish it, train your employees, and fund operations for three to six months so your business can ramp up to occupancy expectations to support the business profitably. For this scenario use a factor of $225 per square foot. Therefore, your estimated start up costs for building a 6,000 square foot facility will be in the neighborhood of $1,350,000. This value can and will vary depending on land costs, construction methods, and interest rates.
These figures are eye openers to be sure, realistic in the sense that in our experience most new businesses fail to consider the myriad number of factors which contribute to start up expense. Whether you're going to rent or build and own, don't underestimate your start up requirements.
Sunday, June 29, 2008
Monday, June 23, 2008
Developing a Competitive Analysis
A comprehensive competitive analysis identifies all your competitors in your target market as well as the types of services they offer, the rates they charge, the marketing specials they may offer, in addition to their proximity to your proposed facility.
1. Identify your target market area.
To start developing your competitive analysis, get out the local map of your target market and mark the location of your proposed pet care services facility. Next draw a circle around the location at a 10 mile radius, keeping in mind that some markets are larger, especially in rural areas, and some markets are smaller, especially in urban areas. This area within the circle is the area in which you will want to identify competitors.
2. Identify your competitors within your target area by type, size, and location.
Get out the telephone book and/or use the Internet to identify all Veterinary Clinics, Large, Medium, and Small Boarding Kennels, Dog Day Care Facilities, Groomers, Mobile Groomers, Trainers, Local Humane Societies, Pet Walking services, and Pet Sitting Services within your target market area.
3. Obtain a Large Map of your target area and plot each competitor on the map by type and size assigning a specific color for each type of competitor. i.e Yellow for Vets, Red for large Kennels, Blue for Dog Day Care facilities, etc.
4. Next, Develop a competitive analysis worksheet similar to one we include in our Pet Care Business Library for each competitor. Include name, telephone numbers, fax numbers, Internet address. You can gather a lot of information about your competitors services and rates from their websites, but you may want to call and visit each and every competitor and identify as many aspects of their business operations as you can including the types and subtypes of services they offer, the rates they charge for each service, their hours of operation, their certifications, and their accreditation. Keep in mind that you will find different facility sizes with differing kennel sizes and rates with no two alike.
5. Once you've completed this exercise, you will know the competitive landscape within your target market quite well and you be able to develop a very good sense of what "The Going Rate" which is the amount charged for similar services in your target area. Discounted rates are used for specials, and premium rates are used when there are few competitors or you have something unique and special to offer. But for the purposes of preparing a realistic business plan, you'll want to use the going rate as the basis for your financial forecasts.
1. Identify your target market area.
To start developing your competitive analysis, get out the local map of your target market and mark the location of your proposed pet care services facility. Next draw a circle around the location at a 10 mile radius, keeping in mind that some markets are larger, especially in rural areas, and some markets are smaller, especially in urban areas. This area within the circle is the area in which you will want to identify competitors.
2. Identify your competitors within your target area by type, size, and location.
Get out the telephone book and/or use the Internet to identify all Veterinary Clinics, Large, Medium, and Small Boarding Kennels, Dog Day Care Facilities, Groomers, Mobile Groomers, Trainers, Local Humane Societies, Pet Walking services, and Pet Sitting Services within your target market area.
3. Obtain a Large Map of your target area and plot each competitor on the map by type and size assigning a specific color for each type of competitor. i.e Yellow for Vets, Red for large Kennels, Blue for Dog Day Care facilities, etc.
4. Next, Develop a competitive analysis worksheet similar to one we include in our Pet Care Business Library for each competitor. Include name, telephone numbers, fax numbers, Internet address. You can gather a lot of information about your competitors services and rates from their websites, but you may want to call and visit each and every competitor and identify as many aspects of their business operations as you can including the types and subtypes of services they offer, the rates they charge for each service, their hours of operation, their certifications, and their accreditation. Keep in mind that you will find different facility sizes with differing kennel sizes and rates with no two alike.
5. Once you've completed this exercise, you will know the competitive landscape within your target market quite well and you be able to develop a very good sense of what "The Going Rate" which is the amount charged for similar services in your target area. Discounted rates are used for specials, and premium rates are used when there are few competitors or you have something unique and special to offer. But for the purposes of preparing a realistic business plan, you'll want to use the going rate as the basis for your financial forecasts.
Sunday, June 22, 2008
Calculating Employee Needs
The number of employees you will need to operate your Pet Care Service Business safely and efficiently will depend on the the types of services you will offer, i.e. boarding, dog day care, grooming, retail, training; the scale of your business, i.e. the number of pets you will care for; the occupancy rates you anticipate, and your hours of operation. We'll propose some general guidelines you can use to start populating the personnel schedule for your business plan. Always keep in mind that every employee is an ambassador of the business who should be cheerful and eager to please, even under the busiest of conditions.
From a management perspective you will need a manager, an assistant manager, a boarding supervisor, boarding attendants, a dog day care playground supervisor, playground attendants, at lease one receptionist, and possibly a groomer if you are going offer more than basic pet grooming services. All employees should be cross trained as multi-taskers and be able to pitch in with any Pet Care Service Business Activity at any time from intake to poop patrol, and from first aid to outtake. Let's get started.
1. Define what services you will offer. Think of Overnight Boarding, Dog Day Care, Grooming, Retail, and Training.
2. Define the maximum number of pets you can anticipate in each category. This will be dependent on available space if you're renting, or what you can afford to build. Generally use 100 to 125 square feet per pet guest as a guideline to start the personnel needs analysis.
3. Define the occupancy and the utilization rates for each type of service. The occupancy numbers will vary according to the size of the facility and your geographical location. You can obtain Industry Occupancy Statistics from The Pet Care Services Organization, the National Trade Organization for the Pet Care Services Industry. The published overall yearly occupancy rates for large kennels (>100 pet guests) is approximately 58% and Dog Day Care Facilities is approximately 62%. Approximately 20 per cent of boarding and dog day care guests will utilize some grooming service, and approximately 10 per cent of all boarding and dog day care guests will purchase a retail product of some sort while visiting your facility. These numbers can be increased significantly through various sales and marketing campaigns and active sales approaches. When you multiply the maximum capacity by the occupancy percentages, you'll be able to calculate a utilization figure which is the basis for determining the number of employees you'll need to staff your facility.
4. Define your hours of operation. You will need to provide personnel covrage for all areas for al hours of business operation. Keep in mind the needs of your potential clients. If you offer Dog Day Care services, you may have to be open early and stay open late. If you offer boarding, you should consider being open weekends and providing late pickup. Most employees will want to work at least 4 hour shifts if part time and no longer than 8 hours if full time, but you can split shift and implement start time differentials to cover your busiest times. Also, keep in mind that overtime may be a factor for employees that work greater than 40 hours a week.
5. For Boarding Services, experienced Pet Care Service Business Operators will use a factor of one kennel attendant to 20 pets. For Dog Day Care Facilities, the ratio is one playground attendant to 12 pet guests. For the purposes of completing this calculation, use the utilization factor you calculated above as the basis for the number of pet guests you'll need to care for in your facility. As Manager and assistant manager, you will participate in any and all of the facility operations, especially when you're busier than expected, or your employees call in sick, go away on vacation, or quit.
6. With this information in hand, you can populate your personnel needs schedule which is a mandatory part of any credible Business Plan.
You can also refer to Our Pet Care Service Business Development Library for more information.
From a management perspective you will need a manager, an assistant manager, a boarding supervisor, boarding attendants, a dog day care playground supervisor, playground attendants, at lease one receptionist, and possibly a groomer if you are going offer more than basic pet grooming services. All employees should be cross trained as multi-taskers and be able to pitch in with any Pet Care Service Business Activity at any time from intake to poop patrol, and from first aid to outtake. Let's get started.
1. Define what services you will offer. Think of Overnight Boarding, Dog Day Care, Grooming, Retail, and Training.
2. Define the maximum number of pets you can anticipate in each category. This will be dependent on available space if you're renting, or what you can afford to build. Generally use 100 to 125 square feet per pet guest as a guideline to start the personnel needs analysis.
3. Define the occupancy and the utilization rates for each type of service. The occupancy numbers will vary according to the size of the facility and your geographical location. You can obtain Industry Occupancy Statistics from The Pet Care Services Organization, the National Trade Organization for the Pet Care Services Industry. The published overall yearly occupancy rates for large kennels (>100 pet guests) is approximately 58% and Dog Day Care Facilities is approximately 62%. Approximately 20 per cent of boarding and dog day care guests will utilize some grooming service, and approximately 10 per cent of all boarding and dog day care guests will purchase a retail product of some sort while visiting your facility. These numbers can be increased significantly through various sales and marketing campaigns and active sales approaches. When you multiply the maximum capacity by the occupancy percentages, you'll be able to calculate a utilization figure which is the basis for determining the number of employees you'll need to staff your facility.
4. Define your hours of operation. You will need to provide personnel covrage for all areas for al hours of business operation. Keep in mind the needs of your potential clients. If you offer Dog Day Care services, you may have to be open early and stay open late. If you offer boarding, you should consider being open weekends and providing late pickup. Most employees will want to work at least 4 hour shifts if part time and no longer than 8 hours if full time, but you can split shift and implement start time differentials to cover your busiest times. Also, keep in mind that overtime may be a factor for employees that work greater than 40 hours a week.
5. For Boarding Services, experienced Pet Care Service Business Operators will use a factor of one kennel attendant to 20 pets. For Dog Day Care Facilities, the ratio is one playground attendant to 12 pet guests. For the purposes of completing this calculation, use the utilization factor you calculated above as the basis for the number of pet guests you'll need to care for in your facility. As Manager and assistant manager, you will participate in any and all of the facility operations, especially when you're busier than expected, or your employees call in sick, go away on vacation, or quit.
6. With this information in hand, you can populate your personnel needs schedule which is a mandatory part of any credible Business Plan.
You can also refer to Our Pet Care Service Business Development Library for more information.
Calculating Space Requirements
To look solely at the number of square feet required to provide a safe, hygienic, and responsibly managed Pet Care manner, we recommend a minimum of 100 square feet and generally 125 square feet of floor space be dedicated per Pet Guest. For the purposes of developing some examples of space needs, we'll use 125 number as a factor in our calculations.
Example # 1 A dedicated Dog Day Care Facility of 48 pet guests - 48 pets x 125 square feet = 6,000 square feet.
Example # 2 A full service Pet Boarding Facility of 100 pet guests - 100 pet guests x 125 square feet = 12,500 square feet.
This general space allocations should provide adequate space needs for the reception and retail areas, pet boarding areas, dedicated playground areas, hallways, offices, bathrooms, grooming and bathing areas, and food prep areas. Actual space allocations will depend on actual circumstances.
These space allocation examples are only general guidelines and they are by no means written in stone. Every facility will need to consider its particular set of circumstances, make adjustments, and more than likely make compromises when it comes to space allocations, but a word of caution is in order. Be careful not to develop a facility with available space so limited that the facility is better known as a PET STORAGE facility. Successful Pet Care Service Businesses offer uncrowded, hygienic, and strive to provide non stressful conditions for their Pet Guests. They follow the very best operational practices, while at the same time supporting the Mission Statement of the Pet Care Services Organization. See our Pet Care Business Development Library for details.
Example # 1 A dedicated Dog Day Care Facility of 48 pet guests - 48 pets x 125 square feet = 6,000 square feet.
Example # 2 A full service Pet Boarding Facility of 100 pet guests - 100 pet guests x 125 square feet = 12,500 square feet.
This general space allocations should provide adequate space needs for the reception and retail areas, pet boarding areas, dedicated playground areas, hallways, offices, bathrooms, grooming and bathing areas, and food prep areas. Actual space allocations will depend on actual circumstances.
These space allocation examples are only general guidelines and they are by no means written in stone. Every facility will need to consider its particular set of circumstances, make adjustments, and more than likely make compromises when it comes to space allocations, but a word of caution is in order. Be careful not to develop a facility with available space so limited that the facility is better known as a PET STORAGE facility. Successful Pet Care Service Businesses offer uncrowded, hygienic, and strive to provide non stressful conditions for their Pet Guests. They follow the very best operational practices, while at the same time supporting the Mission Statement of the Pet Care Services Organization. See our Pet Care Business Development Library for details.
Pet Care Experience Requirements
To safely, effectively, and profitably operate a Pet Care Service Business, you will have to have people management skills to properly manage employees, business management skills to coordinate the business activities, and you must have an understanding of all aspects of operating a Pet Care Services Business.
For those individuals who do not have experience in the Pet Care Services Industry, you will have to acquire the Pet Care handling skills you will need to safely supervise and care for your pet guests.
To obtain a basic understanding of Pet behavior, Pet physiology, and Pet Care first aid, I recommend completing a Pet Care Technician I Certification course offered by the Pet Care Services Organization. The Course is an open book course which can be completed in a couple of weeks. See the PCSO website for details, http://www.petcareservices.org/ The Pet Care Services Organization, formerly known as the American Boarding Kennels Association, is the National Trade Association for the Pet Care Services Industry and offers a full series of Pet Care Certification Courses.
Once you have the credentials and the ability to convey your skills to prospective clients, you'll need practical experience with Pet Intake, Group Pet Supervision, Pet Feeding, Pet Walking, Pet Waste(Poop and Pee) Management, Pet outake, and Pet Pampering ! This Practical hands-on Pet Care experience can be obtained by volunteering at a local humane society or working at a local Pet Boarding or Dog Day Care facility. Six months to two years of direct experience in a Pet Care Service Facility should give you the understanding of Pet Handling and Care necessary to establish the foundation you'll need to go forward with your plans. You'll find that operating a Pet Care Service Business is a lot more than Petting Puppies.
But a word of caution to those thinking of working for a For Profit Business !! DO NOT sign any restrictive work covenants, confidentiality agreements, or non-compete agreements which might compromise your ability to start your own Pet Care Service Business.
For those individuals who do not have experience in the Pet Care Services Industry, you will have to acquire the Pet Care handling skills you will need to safely supervise and care for your pet guests.
To obtain a basic understanding of Pet behavior, Pet physiology, and Pet Care first aid, I recommend completing a Pet Care Technician I Certification course offered by the Pet Care Services Organization. The Course is an open book course which can be completed in a couple of weeks. See the PCSO website for details, http://www.petcareservices.org/ The Pet Care Services Organization, formerly known as the American Boarding Kennels Association, is the National Trade Association for the Pet Care Services Industry and offers a full series of Pet Care Certification Courses.
Once you have the credentials and the ability to convey your skills to prospective clients, you'll need practical experience with Pet Intake, Group Pet Supervision, Pet Feeding, Pet Walking, Pet Waste(Poop and Pee) Management, Pet outake, and Pet Pampering ! This Practical hands-on Pet Care experience can be obtained by volunteering at a local humane society or working at a local Pet Boarding or Dog Day Care facility. Six months to two years of direct experience in a Pet Care Service Facility should give you the understanding of Pet Handling and Care necessary to establish the foundation you'll need to go forward with your plans. You'll find that operating a Pet Care Service Business is a lot more than Petting Puppies.
But a word of caution to those thinking of working for a For Profit Business !! DO NOT sign any restrictive work covenants, confidentiality agreements, or non-compete agreements which might compromise your ability to start your own Pet Care Service Business.
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