Doggie daycare business plan for your own dog kennel?
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’.
2.1 The Doggy Daycare 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.
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.
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.
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.
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
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 Dog Daycare 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 Doggie Daycare 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.
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:
|Research and Development||$32,750|
|TOTAL START-UP EXPENSES||$580,125|
|Other Current Assets||$222,500|
|Start-up Expenses to Fund||$121,875|
|Start-up Assets to Fund||$195,000|
|TOTAL FUNDING REQUIRED||$0|
|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|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$495,000|
|Loss at Start-up (Start-up Expenses)||$113,125|
|TOTAL CAPITAL AND LIABILITIES||$121,875|
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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.
Strategic/Operational Business Plan
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:
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.
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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:
|Potential Customers||Growth||YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5||CAGR|
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.
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.
High Quality Business Plan and Professional Support
It was amazing to work with OGS Capital for our business plan. They promptly responded our enquires and delivered document on time.The document was well organized high quality and content.We succeded with Alex and his team support. We thank you guys again for professional approach and easy communication.
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.
The detailed information about sales forecast, total unit sales, total sales is given in the following table.
|Unit Sales||Year 1||Year 2||Year 3|
|Drawers and chests||265,450||322,390||393,320|
|TOTAL UNIT SALES||3,364,030||3,813,140||5,082,090|
|Unit Prices||Year 1||Year 2||Year 3|
|Drawers and chests||$650.00||$750.00||$850.00|
|Drawers and chests||$139,350||$194,600||$249,850|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Drawers and chests||$3.00||$3.50||$4.00|
|Direct Cost of Sales|
|Drawers and chests||$19,400||$67,600||$115,800|
|Subtotal Direct Cost of Sales||$294,100||$699,400||$1,104,700|
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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.
|Year 1||Year 2||Year 3|
|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|
|Front Desk Officer||$20,000||$23,300||$30,000|
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.
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
The following graph shows the company’s Brake-even Analysis.
The following table shows the company’s Brake-even Analysis.
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|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
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
The following table shows detailed information about profit and loss, and total cost of sales.
8.4 Projected Cash Flow
The following column diagram shows the 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 Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|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|
|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|
|SUBTOTAL CASH SPENT||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
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|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
The following table shows data about business ratios, ratio analysis, total assets, net worth.
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|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.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|
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