Table of Content

    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 dog daycare 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 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.

    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 plan 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
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    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 Dog Daycare Business is being started

    Dr. Spenks has always wanted to start start a doggie daycare business plan 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.

    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

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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

    Note

    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 daycare 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 daycare 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 day care 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:

    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.

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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:

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Individual Households 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Corporate Organizations 23% 11,433 13,344 16,553 18,745 20,545 13.43%
    Dog Dealers 18% 8,322 9,455 10,655 12,867 14,433 15.32%
    Animal Shelters 13% 4,333 5,655 6,877 7,877 9,543 15.00%
    Total 100% 46,422 60,798 77,750 92,033 110,953 9.54%

    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.

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    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 Sales Year 1 Year 2 Year 3
    Washing Services 187,330 260,320 258,240
    Veterinary Services 802,370 815,430 823,540
    Grooming Services 539,320 770230 1,002,310
    Drawers and chests 265,450 322,390 393,320
    Daycare Services 1,435,320 1,250,430 1,762,450
    Training Services 134,240 394,340 842,230
    TOTAL UNIT SALES 3,364,030 3,813,140 5,082,090
    Unit Prices Year 1 Year 2 Year 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 Costs Year 1 Year 2 Year 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

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    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 1 Year 2 Year 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 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

    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-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

    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 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

    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
    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

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

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    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.

    OGS capital staff also specialize in writing business plans such as pet photography business plan, horse boarding business plan, dog walking business plan, horse training business plan, pet hotel business plan and etc.

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