Table of Content

    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.

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    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:

    Cat Cafe Business Plan - Unit Sales

    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:

    Cat Cafe Business Plan - Startup Cost

    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:

    Cat Cafe Business Plan - Market Segmentation

    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

    Cat Cafe Business Plan - Sales Monthly

    6.4 Sales Yearly

    Cat Cafe Business Plan - Sales Yearly

    6.5 Sales Forecast

    Our forecasted sales are summarized in the following column charts:

    Cat Cafe Business Plan - Unit Sales

    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

    Cat Cafe Business Plan - 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

    Cat Cafe Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Cat Cafe Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Cat Cafe Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Cat Cafe Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Cat Cafe Business Plan - 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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