Do you want to start cat cafe business?
Do you want to start your own business? Well, if you are thinking about how to start a cat cafe business, you are on the right track. The business is based upon serving the cat lovers with meal or just coffee in a comfortable place where they are surrounded with adoptable cats and can also play with them.
The first step you will have to take to start your setup is to make a thorough business plan covering all the details of your business. If you don’t have an idea of how to write an effective business plan, you can take help from this sample business plan of the cat cafe startup named, ‘Kitty Cafe’.
Executive Summary
2.1 The Business
Kitty Cafe will be a cat cafe owned by Amy Theron, providing trained cats for those who want to adopt, and for those who just want to play at the moment while having a relaxing time and diet, located in Austin.
2.2 Management
Before thinking about how to open a cat cafe, you should rent the most suitable space and convert it into an appealing cafe. Kitty Cafe will be owned and managed by Amy Theron, who will hire a team to train stray cats, to prepare menu for the customers and to help in running the business smoothly.
2.3 Customers
Our target customers will be the residents especially young and children, tourists and the professionals of our society living in Austin.
2.4 Target of the Company
Our target is to become the best cat cafe in our city, to achieve our goals, the company’s forecasted performance over the next three years, is elaborated in the chart below:
Company Summary
3.1 Company Owner
Amy Theron will be the owner of the company. Amy is a graduate in zoology from the Arizona State University, her love and passion for the cats can be seen in her collection of about fifty different types of cats.
3.2 Why the Business is being started
An estimate of the stray cats in the United States range up to 70 million, Amy has decided to convert those undesirable animals to the most desirable ones by giving them proper training and presenting them in her cafe.
3.3 How the Business will be started
Amy has done a thorough research on how to start a cat cafe before entering this venture, she has decided to serve the cat lovers with teas, coffees, snacks and salads in the environment they love most. Kitty Cafe will also sell trained cats to the customers who want to buy them. The startup requirements are as follows:
The detailed information about the startup is given below:
| Start-up Expenses | |
| Legal | $55,300 |
| Consultants | $0 |
| Insurance | $32,750 |
| Rent | $32,500 |
| Research and Development | $32,750 |
| Expensed Equipment | $32,750 |
| Signs | $1,250 |
| TOTAL START-UP EXPENSES | $187,300 |
| Start-up Assets | $0 |
| Cash Required | $332,500 |
| Start-up Inventory | $32,625 |
| Other Current Assets | $232,500 |
| Long-term Assets | $235,000 |
| TOTAL ASSETS | $121,875 |
| Total Requirements | $245,000 |
| START-UP FUNDING | $0 |
| START-UP FUNDING | $273,125 |
| Start-up Expenses to Fund | $11,875 |
| Start-up Assets to Fund | $15,000 |
| TOTAL FUNDING REQUIRED | $0 |
| Assets | $23,125 |
| Non-cash Assets from Start-up | $18,750 |
| Cash Requirements from Start-up | $0 |
| Additional Cash Raised | $18,750 |
| Cash Balance on Starting Date | $21,875 |
| TOTAL ASSETS | $0 |
| Liabilities and Capital | $0 |
| Liabilities | $0 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $0 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $0 |
| Capital | $0 |
| Planned Investment | $0 |
| Investor 1 | $332,500 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $695,000 |
| Loss at Start-up (Start-up Expenses) | $313,125 |
| TOTAL CAPITAL | $251,875 |
| TOTAL CAPITAL AND LIABILITIES | $251,875 |
| Total Funding | $255,000 |
Services for customers
Before opening a cat cafe, you must decide the ways and services which will prove extremely profitable and appealing for this business.
Kitty Cafe will provide the following services to its customers:
- Selling Trained Cats: Our primary service will be to sell the trained and beautiful cats to the cat lovers who want to adopt them. The customers can freely play and spend time with the trained cats after paying a very few charges to know with which type of cat they feel the most attached with.
- Playing Temporarily: For the persons who don’t have space or time to keep their lovable pet animals, we’ll provide our cats to play with by charging a little amount of money.
- Food & Drinks: We have an assortment of salads, snacks, cakes, teas, coffees, and drinks to provide our customers with a full relaxing time and energizing diet.
- Veterinary Services: We’ll also have a professional vet to treat disorders, diseases, and injuries in your pet animals including cats and dogs.
Marketing Analysis of cat cafe business
Marketing analysis can be the most deciding factor of the success of your startup and must be done accurately and efficiently before starting a cat cafe. In your cat cafe business plan you should analyze whether you will be able to fulfill your business dreams in the market or not. You have to thoroughly interpret the market and propose different ways in your business plan for cat cafe to get introduced to your target audience. By going through this sample cat cafe business model, you can have a general idea of marketing trends, but it is better to hire a professional to do accurate marketing analysis according to your figures and vicinity.
5.1 Market Trends
About 85.8 million cats are owned by 35% of all households in the United States. Many people love to have cats as their pet animals and many who lack proper space and time to have pets seek places like cat cafes to console their desires of playing with the beautiful creature. Although the market isn’t thronged up with such cafes, yet the interest of target audience shows that the business will soon reach its peak point.
5.2 Marketing Segmentation
Knowing your customers before starting your business is the best thing you can do to formulate your policies. Considering the importance of an accurate marketing analysis, Amy had hired a marketing analyst to identify the groups of her target customers which can become potential clients in future as demonstrated here:
The detailed marketing segmentation is as follows:
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Children & Teens | 32% | 11,433 | 13,344 | 16,553 | 18,745 | 20,545 | 13.43% |
| Young & Adults | 48% | 22,334 | 32,344 | 43,665 | 52,544 | 66,432 | 10.00% |
| Tourists & Passers-by | 20% | 12,867 | 14,433 | 15,999 | 17,565 | 19,131 | 15.32% |
| Total | 100% | 46,634 | 60,121 | 76,217 | 88,854 | 106,108 | 9.54% |
5.2.1 Children & Teens: Our expert has identified children as the sole customers of Kitty Cafe, there are many children and teens in the city whose parents don’t allow them to keep pets at home due to their careless attitudes, so they can come to our cafe and can play with their desired cat as long as they want.
Those who possess their own cats are expected to avail our veterinary services whenever they are facing any issue with their animal.
5.2.2 Young & Adults: There are a lot of young and adults who want to keep a pet at their residence but are unable to give proper care and attention to them, these people will also rush towards our cafe in their free times to relax themselves and fresh their moods. These people will also avail our veterinary services and can, of course, adopt our cats whenever they want to.
5.2.3 Tourists & Passers-by: Our last category of target customers will comprise of the tourists and the passers-by who will not be able to resist coming inside on seeing our lovely and relaxing atmosphere.
The detailed market analysis of our potential customers is given in the following table:
5.3 Business Target
Our aim is to become the best and most visited cat cafe in the whole city. Our main business targets are as follows:
- To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
- To balance the initial cost of the startup with earned profits by the end of the first year
5.4 Product Pricing
Our prices vary with the type of cat, we will have hourly packages and weekly and monthly memberships to spend time with cats. However, the prices of our food items and drinks are almost the same as of our competitors.
Strategy
No startup can thrive in the market if you are unable to market it properly, besides looking for how to set up a cat cafe, it is more important to look for the strategic business plan you can make in order to increase your sales.
6.1 Competitive Analysis
If you have decided to start a cat cafe, then you must come up with distinguished competitive aspects to clarify that why should your target customers choose you instead of all others.
Kitty Cafe’s biggest competitive advantage is the excellent customer service, and secondly its elegant and comfortable atmosphere to uplift your mood while serving a delicious meal. Only we in all our competitors are providing veterinary services by a professional vet.
6.2 Sales Strategy
Amy’s extensive research on how to run a cat cafe has enabled her to come up with the following marvelous advertising ideas.
- We’ll held a party with an exhibition show by our trained cats
- We’ll provide 20% discount on all our services for the first three months of our launch
- We’ll advertise ourselves by using posters, brochures, print media, and social media
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Our forecasted sales are summarized in the following column charts:
The detailed information about sales forecast is given in the following table:
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Selling Trained Cats | 1,887,030 | 2,680,320 | 2,588,240 |
| Playing Temporarily | 802,370 | 815,430 | 823,540 |
| Foods & Drinks | 539,320 | 770230 | 1,002,310 |
| Veterinary Services | 265,450 | 322,390 | 393,320 |
| TOTAL UNIT SALES | 3,494,170 | 4,588,370 | 4,807,410 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Selling Trained Cats | $140.00 | $150.00 | $160.00 |
| Playing Temporarily | $600.00 | $800.00 | $1,000.00 |
| Foods & Drinks | $700.00 | $800.00 | $900.00 |
| Veterinary Services | $650.00 | $750.00 | $850.00 |
| Sales | |||
| Selling Trained Cats | $2,149,800 | $2,784,000 | $3,383,200 |
| Playing Temporarily | $120,050 | $194,500 | $268,500 |
| Foods & Drinks | $50,110 | $71,600 | $93,000 |
| Veterinary Services | $139,350 | $194,600 | $249,850 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Selling Trained Cats | $0.70 | $0.80 | $0.90 |
| Playing Temporarily | $0.40 | $0.45 | $0.50 |
| Foods & Drinks | $0.30 | $0.35 | $0.40 |
| Veterinary Services | $3.00 | $3.50 | $4.00 |
| Direct Cost of Sales | |||
| Standard Self Storage Units | $989,300 | $1,839,000 | $2,679,700 |
| Selling Trained Cats | $66,600 | $119,900 | $173,200 |
| Playing Temporarily | $17,900 | $35,000 | $52,100 |
| Foods & Drinks | $19,400 | $67,600 | $115,800 |
| Veterinary Services | $1,294,100 | $1,699,400 | $2,104,700 |
Personnel Plan
To start a cat cafe franchising business plan, the main thing you’ll need in bulk is cat variety and a few workers to maintain the environment besides entertaining the customers’ needs.
7.1 Company Staff
To run Kitty Cafe, Amy will hire the following personnel to assist her in managing the business:
- 1 Co-Manager to monitor all the operations of the cafe
- 2 Accountants to maintain financial records
- 1 Veterinary Doctor to treat injuries and damages to pet animals
- 3 Cat Trainers to train the cats
- 2 Drivers to bring in stray cats
- 4 Cooks to manage the menu
- 2 Waiters to serve the customers
- 2 Cleaners to maintain the cleanliness
7.2 Average Salary of Employees
Average salaries of the employees for the next three years can be demonstrated from the following table:
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Accountants | $85,000 | $95,000 | $105,000 |
| Co-Manager | $45,000 | $50,000 | $55,000 |
| Veterinary Doctor | $152,000 | $159,000 | $166,000 |
| Cat Trainers | $145,000 | $152,000 | $159,000 |
| Drivers | $50,000 | $55,000 | $60,000 |
| Cooks | $187,000 | $194,000 | $201,000 |
| Waiters | $42,000 | $45,000 | $48,000 |
| Cleaners | $42,000 | $45,000 | $48,000 |
| Total Salaries | $152,000 | $159,000 | $166,000 |
Financial Plan
The final step in starting your cat cafe is to make a detailed financial plan covering the details about how will you manage the startup costs, the salaries of your employees and the expenses of cats with or without the profits earned. This sample business plan can also assist you in making your financial plan, but to ensure extreme accuracy and precision, you are advised to hire a financial advisor to estimate the cat cafe cost in your locality and formulate a financial plan for at least three years.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 11.00% | 12.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 26.42% | 27.76% | 28.12% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| Brake-Even Analysis | |
| Monthly Units Break-even | 5530 |
| Monthly Revenue Break-even | $159,740 |
| Assumptions: | |
| Average Per-Unit Revenue | $260.87 |
| Average Per-Unit Variable Cost | $0.89 |
| Estimated Monthly Fixed Cost | $196,410 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $309,069 | $385,934 | $462,799 |
| Direct Cost of Sales | $15,100 | $19,153 | $23,206 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15,100 | $19,153 | $23,206 |
| Gross Margin | $293,969 | $366,781 | $439,593 |
| Gross Margin % | 94.98% | 94.72% | 94.46% |
| Expenses | |||
| Payroll | $138,036 | $162,898 | $187,760 |
| Sales and Marketing and Other Expenses | $1,850 | $2,000 | $2,150 |
| Depreciation | $2,070 | $2,070 | $2,070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4,000 | $4,250 | $4,500 |
| Insurance | $1,800 | $1,800 | $1,800 |
| Rent | $6,500 | $7,000 | $7,500 |
| Payroll Taxes | $34,510 | $40,726 | $46,942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $188,766 | $220,744 | $252,722 |
| Profit Before Interest and Taxes | $105,205 | $146,040 | $186,875 |
| EBITDA | $107,275 | $148,110 | $188,945 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26,838 | $37,315 | $47,792 |
| Net Profit | $78,367 | $108,725 | $139,083 |
| Net Profit/Sales | 30.00% | 39.32% | 48.64% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40,124 | $45,046 | $50,068 |
| Cash from Receivables | $7,023 | $8,610 | $9,297 |
| SUBTOTAL CASH FROM OPERATIONS | $47,143 | $53,651 | $59,359 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47,143 | $53,651 | $55,359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21,647 | $24,204 | $26,951 |
| Bill Payments | $13,539 | $15,385 | $170,631 |
| SUBTOTAL SPENT ON OPERATIONS | $35,296 | $39,549 | $43,582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35,296 | $35,489 | $43,882 |
| Net Cash Flow | $11,551 | $13,167 | $15,683 |
| Cash Balance | $21,823 | $22,381 | $28,239 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184,666 | $218,525 | $252,384 |
| Accounts Receivable | $12,613 | $14,493 | $16,373 |
| Inventory | $2,980 | $3,450 | $3,920 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $201,259 | $237,468 | $273,677 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $12,420 | $14,490 | $16,560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198,839 | $232,978 | $267,117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9,482 | $10,792 | $12,102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9,482 | $10,792 | $12,102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9,482 | $10,792 | $12,102 |
| Paid-in Capital | $30,000 | $30,000 | $30,000 |
| Retained Earnings | $48,651 | $72,636 | $96,621 |
| Earnings | $100,709 | $119,555 | $138,401 |
| TOTAL CAPITAL | $189,360 | $222,190 | $255,020 |
| TOTAL LIABILITIES AND CAPITAL | $198,839 | $232,978 | $267,117 |
| Net Worth | $182,060 | $226,240 | $270,420 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 4.35% | 30.82% | 63.29% | 4.00% |
| Percent of Total Assets | 4.35% | 4.71% | 5.80% | 9.80% |
| Accounts Receivable | 5.61% | 4.71% | 3.81% | 9.70% |
| Inventory | 1.85% | 1.82% | 1.79% | 9.80% |
| Other Current Assets | 1.75% | 2.02% | 2.29% | 27.40% |
| Total Current Assets | 138.53% | 150.99% | 163.45% | 54.60% |
| Long-term Assets | -9.47% | -21.01% | -32.55% | 58.40% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.68% | 3.04% | 2.76% | 27.30% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.80% |
| Total Liabilities | 4.68% | 3.04% | 2.76% | 54.10% |
| NET WORTH | 99.32% | 101.04% | 102.76% | 44.90% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.18% | 93.85% | 93.52% | 0.00% |
| Selling, General & Administrative Expenses | 74.29% | 71.83% | 69.37% | 65.20% |
| Advertising Expenses | 2.06% | 1.11% | 0.28% | 1.40% |
| Profit Before Interest and Taxes | 26.47% | 29.30% | 32.13% | 2.86% |
| Main Ratios | ||||
| Current | 25.86 | 29.39 | 32.92 | 1.63 |
| Quick | 25.4 | 28.88 | 32.36 | 0.84 |
| Total Debt to Total Assets | 2.68% | 1.04% | 0.76% | 67.10% |
| Pre-tax Return on Net Worth | 66.83% | 71.26% | 75.69% | 4.40% |
| Pre-tax Return on Assets | 64.88% | 69.75% | 74.62% | 9.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19.20% | 21.16% | 23.12% | N.A. |
| Return on Equity | 47.79% | 50.53% | 53.27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.56 | 4.56 | 4.56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19.7 | 22.55 | 25.4 | N.A. |
| Accounts Payable Turnover | 14.17 | 14.67 | 15.17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1.84 | 1.55 | 1.26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.02 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120,943 | $140,664 | $160,385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.45 | 0.48 | 0.51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23.66 | 27.01 | 30.36 | N.A. |
| Sales/Net Worth | 1.68 | 1.29 | 0.9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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