Do you want to start own dog daycare business?

Are you planning to start a dog daycare business? Well, dogs are the most popular pet in the world especially in the United States where 89.7 million dogs were owned as pets in 2017. Most of these dog owners need the services of dog daycare centers which can take care of their beloved dogs when they are not around.
The people in the United States never hesitate to spend on their pets, for instance, the US residents spend tens of billions of dollars on their pet friends, the majority of which are dogs. This shows how profitable a dog daycare business can be. So, if you are thinking about starting this venture you should know that you can earn some serious cash provided you plan your business efficiently.
The first thing before starting any business is to write a comprehensive business plan which establishes the basis of your company’s future operations and decisions. It also provides detailed guidelines about everything you will be doing in the next few years.
If you are wondering how to write an effective business plan then here we are providing you the business plan for a dog daycare startup named ‘The Dog Cave’.

Executive Summary

2.1 The Business

The Dog Cave will be located at the East Lake Shore Drive District in Chicago, Illinois. We will be strategically located in one of the richest neighborhoods in the United States. The company will be licensed by American Pet Association and equipped with all resources and manpower to provide the highest quality of services possible.
The business will be owned and operated by Dr. John Spenks, a renowned veterinary doctor of the United States. Dr. Spenks studied Veterinary Sciences from the University of Florida and had been serving in various Government as well as privately-owned veterinary and pet care centers throughout the United States for the last 20 years. It is probably due to his vast experience spanning two decades that he knows everything about how to start a dog daycare business.

2.2 Management

The company will be initially launched as a small startup operating only in Chicago. Dr. Spenks will manage the overall operations of the company and will be assisted by his nephew Mike Spenks, who is an MBA from Harvard and has served in various managing positions at many small and medium-sized businesses. Mike will also manage the finances of the company. Opening a dog daycare business is not an easy task that’s why Dr. Spenks will hire a team before the company’s launch to help him throughout the process.

2.3 Customers

The company aims to serve one of the richest residential zones of the United States. The community living in the region has the annual mean household income of $593,454; hence, they can easily afford our quality services.

2.4 Target of the Company

The company aims to provide highest quality service to its customers and become the best daycare center in Chicago within three years of its launch. Dr. Spenks also plans to launch a few more centers in other cities as well.

2.4.1 Objectives

The target of the company can be achieved by fulfilling the following objectives:

  • To achieve the net profit margin of $30k per month by the end of the first year
  • To increase the profit margin by at least 20% each year
  • To balance the initial cost of startup with earned profits by the end of three years

The company’s financial experts have forecasted following sales and profits for the next three years of launch.

Dog Daycare Business Plan - 3 Years Profit Forecast

2.4.2 Keys to Success

The keys to the success of fulfilling our objectives and achieving our target are as follows:

  • Comprehensive planning of ‘everything
  • Hiring the best staff for operations
  • Respecting our customers and their beloved pets
  • Maintaining strict checking on the staff with reference to health and cleanliness aspects of the facility

Company Summary

3.1 Company Owner

The Dog Cave will be owned by Dr. Spenks who has been in veterinary and pet care industry for the last 20 years. Dr. Spenks has been planning this startup for the last couple of years and hence perfectly knows how to open a dog daycare business and operate it to yield profit even in the first year of launch.

3.2 Why the Business is being started

Dr. Spenks has always wanted to start start a doggie daycare business out of his love for dogs and had been planning for it for quite a time. But he finally decided to start this venture after receiving his share of wealth from his father recently. Starting this business was undoubtedly the best way to not only invest his money but also to fulfill his long-awaited dream.

3.3 How the Business will be started

The Dog Cave will be a bonded, insured and licensed dog daycare business. Dr. Spenks is nearly halfway through the process of acquiring a license for the company and has already procured a beautiful facility near the residential zone of the city. The facility was previously used as local school so a lot of work will be required to convert it into a dog daycare center. Dr. Spenks has acquired the services of a contracting firm which is currently working on the facility.
Dr. Spenks has planned everything about his business. He has even hired a team of professional experts from various fields to just help him craft a detailed plan for his venture. His nephew, Mike, will be in charge of all financial activities and will oversee other experts.
The initial main expenses for the startup include rent of the facilities and other utilities along with the expenses due to marketing or advertising of the company. After that, the biggest expense will be in the inventory needed for start-up including shampoo, grooming products, food and other supplies for the dogs.
All the initial investment will be made by Dr. Spenks himself and he won’t need any loans, at least for the first year of operations. Mike, with the help of financial experts, has forecasted following costs for expenses, assets, investment, and loans for the Start-up.

Dog Daycare Business Plan - Startup Cost

The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by experts, is given below:

Start-up Expenses 
Legal$72,500
Dog Beds$32,250
Dog Shampoos$62,875
Consultants$0
Insurance$32,750
Rent$222,500
Research and Development$32,750
Expensed Equipment$62,750
Signs$12,250
Dog Chambers$27,500
Dog Food$22,000
TOTAL START-UP EXPENSES$580,125
Start-up Assets$0
Cash Required$322,500
Start-up Inventory$52,625
Other Current Assets$222,500
Long-term Assets$125,000
TOTAL ASSETS$121,875
Total Requirements$245,000
START-UP FUNDING$0
START-UP FUNDING$273,125
Start-up Expenses to Fund$121,875
Start-up Assets to Fund$195,000
TOTAL FUNDING REQUIRED$0
Assets$203,125
Non-cash Assets from Start-up$118,750
Cash Requirements from Start-up$0
Additional Cash Raised$118,750
Cash Balance on Starting Date$121,875
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$312,500
Investor 2$0
Other$0
Additional Investment Requirement$0
TOTAL PLANNED INVESTMENT$495,000
Loss at Start-up (Start-up Expenses)$113,125
TOTAL CAPITAL$121,875
TOTAL CAPITAL AND LIABILITIES$121,875
Total Funding$295,000

Services for customers

Our dog day care center is primarily aimed to provide a place to dog-owners where they can leave their dogs anytime. We will take care of our customer’s dogs while they are at work, or away on a vacation, or enjoying a weekend trip. Besides providing a safe place for their dogs, we will also provide many other services which are:

  • Dog training
  • Exercising and feeding
  • Veterinary services
  • Washing and grooming

Along with these services, we will also open a small store for selling pet-related products like shampoos, foods, medicines, ties, chains, and clothes for the dogs.

Marketing Analysis of dog daycare business

The most important and difficult part of developing an effective dog day care business plan was its accurate marketing analysis that’s why Dr. Spenks acquired the services of marketing experts. They not only helped him throughout the process but also showed him several dog day care business plan samples to give him an idea about how to carry out an accurate marketing analysis. Dr. Spenks then made his own doggie daycare business plan after he had gone through various dog daycare business plans.
The success or failure of a startup is totally dependent upon its marketing strategy which can only be developed on the basis of accurate marketing analysis. There are four main steps to carry out an accurate marketing analysis which are to identify the current market trends of your business, identify your target audience and potential customers, set out the business targets to achieve, and finally set the prices of your products or services in accordance with the first three steps.

5.1 Market Trends

The pet industry is one of the few industries which have seen a consistent increase in revenue. According to the American Pet Products Association, the residents of US spent a staggering amount of $60.28 Billion in 2015, $66.75 Billion in 2016, and are estimated to spend $69.36 by the end of 2017. These stats show that this industry can be immensely profitable provided that you market yourself successfully.
The most interesting aspect of this industry is its dynamic nature. With latest technologies and luxurious pet products, pet owners’ demands have also changed accordingly. The need for daycare centers, especially for the dogs which is the most favorite pet in the United States, has increased the demand for such facilities beyond limits. Especially for the regions housing well-off community are in a dire need of daycare facilities.

5.2 Marketing Segmentation

A startup must develop a good plan to market itself to its target customers. A successful and efficient marketing strategy can only be developed after we completely know our potential customers. That’s why our marketing experts carried out an extensive research to identify our target customers and develop an effective marketing strategy for them. Our experts have identified the following type of target audience which can become the future consumers of our services and products:

Dog Daycare Business Plan - Market Segmentation

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Individual Households

The biggest consumer of our services and products will be the community living in the residential zones of Chicago. We will specifically target the neighborhood of East Lake Shore Drive which is also the location of our facility. The residential community often has to leave their homes for various purposes and most of the time they can’t take their dogs with them. That’s why they will need our daycare services throughout the year. Moreover, they are also much likely to acquire our dog grooming, washing, training and veterinary services along with the purchase of pet products from our adjacent store. These individual households will contribute the biggest portion of our sales hence they have a major role in deciding our strategies and policies.

5.2.2 Corporate Organizations

Many corporate organizations like police or security agencies also own a lot of detective dogs. We also plan to serve them by providing dog grooming, washing, and veterinary services. Although these organizations also own trained staff for these purposes yet they can still become our potential customers of various pet products like food, medicine, clothes etc.

5.2.3 Dog Dealers

There are also various dog dealers in the central business district of Chicago city. Although they a little far from our facility center but we have made a plan by which we can attract these dealers. We will arrange special transportation facilities for them so that they can easily bring their dogs to us. We will also offer special packages and discounts for the purpose of attracting them towards our services. We hope that these dealers will also help us generate a lot of revenue.

5.2.4 Animal Shelters

There are more than 3500 animal shelters in the United States for accommodating abandoned, stray, or lost animals. We also hope to target hundreds of animal shelters present in Chicago for washing, grooming, and veterinary services. We will also provide them transportation services and special offers.
The detailed market analysis of our potential customers is given in the following table:

Market Analysis
Potential CustomersGrowthYEAR 1YEAR 2YEAR 3YEAR 4YEAR 5CAGR
Individual Households48%22,33432,34443,66552,54466,43210.00%
Corporate Organizations23%11,43313,34416,55318,74520,54513.43%
Dog Dealers18%8,3229,45510,65512,86714,43315.32%
Animal Shelters13%4,3335,6556,8777,8779,54315.00%
Total100%46,42260,79877,75092,033110,9539.54%

5.3 Business Target

We aim to become the best dog care business in Chicago within next three years. Our business target is to balance the cost of our startup within just three years of our launch.

5.4 Product Pricing

We have priced our products and services in the similar ranges as of our competitors. For daycare services, we have developed various plans for charging our customers such as per hour, per day and per week plans. We will provide better services than our competitors for the same prices. The reason behind this pricing policy is to achieve our minimum attractive rate of return while also attracting the customers towards us.

Strategy

Dr. Spenks carried out extensive research and hired financial experts to help him develop an effective marketing and sales strategy for the startup. The experts made a detailed strategy for him to start dog daycare business.
It wasn’t that Dr. Spenks didn’t know how to open a doggie daycare business, he only took help from various experts to ensure the success of this great venture. The strategy of our company as developed by the experts is as follows:

6.1 Competitive Analysis

We have a really tough competition because there are several other dog daycare centers in Chicago, many of them are established since decades. But still, Dr. Spenks is positive that our company will beat all of the competitors within no time. Our competitive edge will be our better quality and luxurious services within the same amount as that of our competitors. Our second competitive edge will be our unparalleled customer service where we will treat our customers and their beloved pets with extreme respect.

6.2 Sales Strategy

We will introduce our startup to our target customers and stakeholders by sending brochures and introductory letters about us. We will also carry out a large-scale social media campaign for our advertisement.

6.3 Sales Forecast

We believe that people will always leave their dogs with us if they use our service even for once. Considering the market demand and the quality of our services, our sales pattern is expected to increase with years. By analyzing our market segmentation strategy, our experts have forecasted the following sales on the yearly basis which are summarized in the column charts.

Dog Daycare Business Plan - Unit Sales

The detailed information about sales forecast, total unit sales, total sales is given in the following table.

Sales Forecast   
Unit SalesYear 1Year 2Year 3
Washing Services187,330260,320258,240
Veterinary Services802,370815,430823,540
Grooming Services539,3207702301,002,310
Drawers and chests265,450322,390393,320
Daycare Services1,435,3201,250,4301,762,450
Training Services134,240394,340842,230
TOTAL UNIT SALES3,364,0303,813,1405,082,090
Unit PricesYear 1Year 2Year 3
Washing Services$140.00$150.00$160.00
Veterinary Services$600.00$800.00$1,000.00
Grooming Services$700.00$800.00$900.00
Drawers and chests$650.00$750.00$850.00
Daycare Services$140.00$120.00$100.00
Training Services$1,150.00$1,300.00$1,450.00
Sales
Washing Services$214,800$274,000$333,200
Veterinary Services$120,050$194,500$268,500
Grooming Services$50,110$71,600$93,000
Drawers and chests$139,350$194,600$249,850
Daycare Services$62,350$72,300$82,250
Training Services$229,500$365,500$501,500
TOTAL SALES
Direct Unit CostsYear 1Year 2Year 3
Washing Services$0.70$0.80$0.90
Veterinary Services$0.40$0.45$0.50
Grooming Services$0.30$0.35$0.40
Drawers and chests$3.00$3.50$4.00
Daycare Services$0.70$0.75$0.80
Training Services$3.00$3.50$4.00
Direct Cost of Sales
Washing Services$98,300$183,000$267,700
Veterinary Services$66,600$119,900$173,200
Grooming Services$17,900$35,000$52,100
Drawers and chests$19,400$67,600$115,800
Daycare Services$27,700$69,200$110,700
Training Services$64,200$224,700$385,200
Subtotal Direct Cost of Sales$294,100$699,400$1,104,700

Personnel plan

Dr. Spenks acquired the services of a Human Resource Manager for helping him develop a personnel plan to open dog daycare business. He developed the following personnel plan for the staff needed for the dog daycare center along with their average salaries with the help of experts.

7.1 Company Staff

Dr. Spencer will manage the overall operations of the daycare center. The company will initially hire following people

  • 1 Accountant to maintain financial records.
  • 4 Sales and Marketing Executives responsible for dealing with corporate businesses, dog dealers, and animal shelters
  • 15 Workers for performing various tasks such as feeding, washing, grooming, and training of dogs
  • 5 Workers to maintain the facility and for doing its routine cleaning
  • 4 Drivers to transportation of dogs owned by dealers, organizations, and shelters
  • 1 Front Desk Officer to act as a receptionist in the company office
  • 1 Salesperson to operate pet products store

To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs.

7.2 Average Salary of Employees

The following table shows the forecasted data about employees and their salaries for next three years.

Personnel Plan
Year 1Year 2Year 3
Accountant$45,000$52,000$59,000
Sales and Marketing Executives$145,000$152,000$159,000
Workers for Dog Services$410,000$440,000$480,000
Workers for Facility$55,000$65,000$75,000
Drivers$60,000$63,300$70,000
Front Desk Officer$20,000$23,300$30,000
Salesperson$10,000$12,000$15,000
Total Salaries$745,000$807,600$888,000

Financial Plan

Mr. Spenks with his nephew Mike developed the financial plan for his business. Mike, being a financial expert, helped him through all the problems encountered in this phase. The problem wasn’t about how to open your own daycare business but the problem was how you plan it incorporating all financial aspects. The financial plan developed by them outlines the development of company over the next three years.

8.1 Important Assumptions

The company’s financial projections are forecasted on the basis of following assumptions. These assumptions are quite conservative and are also expected to show deviation but to a limited level such that the company’s major financial strategy will not be affected.

General Assumptions
Year 1Year 2Year 3
Plan Month123
Current Interest Rate10.00%11.00%12.00%
Long-term Interest Rate10.00%10.00%10.00%
Tax Rate26.42%27.76%28.12%
Other000

8.2 Brake-even Analysis

The following graph shows the company’s Brake-even Analysis.

Dog Daycare Business Plan - Brake-even Analysis

The following table shows the company’s Brake-even Analysis.

 Brake-Even Analysis 
Monthly Units Break-even5530
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

The following charts show the company’s expected Profit and Loss situation on the monthly and yearly basis.

8.3.1 Profit Monthly

Dog Daycare Business Plan - PROFIT MONTHLY

8.3.2 Profit Yearly

Dog Daycare Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Dog Daycare Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

The following table shows detailed information about profit and loss, and total cost of sales.

Dog Daycare Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

The following column diagram shows the projected cash flow.

Dog Daycare Business Plan - Projected Cash Flow

The following table shows detailed data about pro forma cash flow, subtotal cash from operations, subtotal cash received, sub-total spent on operations, subtotal cash spent.

 Pro Forma Cash Flow   
Cash ReceivedYear 1Year 2Year 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
ExpendituresYear 1Year 2Year 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

The following projected balance sheet shows data about total current assets, total long-term assets, total assets, subtotal current liabilities, total liabilities, total capital, total liabilities and capital.

 Pro Forma Balance Sheet   
AssetsYear 1Year 2Year 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 CapitalYear 1Year 2Year 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

The following table shows data about business ratios, ratio analysis, total assets, net worth.

 Ratio Analysis    
Year 1Year 2Year 3INDUSTRY PROFILE
Sales Growth4.35%30.82%63.29%4.00%
Percent of Total Assets
Accounts Receivable5.61%4.71%3.81%9.70%
Inventory1.85%1.82%1.79%9.80%
Other Current Assets1.75%2.02%2.29%27.40%
Total Current Assets138.53%150.99%163.45%54.60%
Long-term Assets-9.47%-21.01%-32.55%58.40%
TOTAL ASSETS100.00%100.00%100.00%100.00%
Current Liabilities4.68%3.04%2.76%27.30%
Long-term Liabilities0.00%0.00%0.00%25.80%
Total Liabilities4.68%3.04%2.76%54.10%
NET WORTH99.32%101.04%102.76%44.90%
Percent of Sales
Sales100.00%100.00%100.00%100.00%
Gross Margin94.18%93.85%93.52%0.00%
Selling, General & Administrative Expenses74.29%71.83%69.37%65.20%
Advertising Expenses2.06%1.11%0.28%1.40%
Profit Before Interest and Taxes26.47%29.30%32.13%2.86%
Main Ratios
Current25.8629.3932.921.63
Quick25.428.8832.360.84
Total Debt to Total Assets2.68%1.04%0.76%67.10%
Pre-tax Return on Net Worth66.83%71.26%75.69%4.40%
Pre-tax Return on Assets64.88%69.75%74.62%9.00%
Additional RatiosYear 1Year 2Year 3
Net Profit Margin19.20%21.16%23.12%N.A.
Return on Equity47.79%50.53%53.27%N.A.
Activity Ratios
Accounts Receivable Turnover4.564.564.56N.A.
Collection Days9299106N.A.
Inventory Turnover19.722.5525.4N.A.
Accounts Payable Turnover14.1714.6715.17N.A.
Payment Days272727N.A.
Total Asset Turnover1.841.551.26N.A.
Debt Ratios
Debt to Net Worth0-0.02-0.04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios
Net Working Capital$120,943$140,664$160,385N.A.
Interest Coverage000N.A.
Additional Ratios
Assets to Sales0.450.480.51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23.6627.0130.36N.A.
Sales/Net Worth1.681.290.9N.A.
Dividend Payout000N.A.