BECAUSE YOU HAVE A FULL LIFE AND THEY ONLY HAVE YOU
DOG DAYCARE START UP SERVICES
DOG DAYCARE START UP SERVICES
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BECAUSE YOU HAVE A FULL LIFE AND THEY ONLY HAVE YOU DOG DAYCARE START UP SERVICES |
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Taking the previous section of maintaining a cash reserve into more depth we have provided for you the actual profit and loss statements of a Dog Daycare that started in April of 2007. This Dog Daycare is using the “triple feed business model” whereas they offer Dog Daycare, Dog Grooming and Dog Boarding as standard services, and each service in turn feeds customers and revenue to the other services provided. This business model offers a lot of advantages for those that are just starting out as it provides a wider range of services from which to draw customers and generate the cash flow needed to keep the business afloat. The other advantage is that by offering a range of services it creates the ability for you to combine your services and offer a wide range of options that would otherwise be unavailable. This makes your business a lot more attractive to potential customers.
You will find that by offering these other services in combination with
daycare that your business as a whole will grow quickly. For customers that
are interested in grooming they now have the option of letting their dog
play before and after its groom where as before the only choice was to have
it locked in a crate at a standard grooming shop, your boarding business
will soar as the dogs get to play during the day and your clients also have
the option of having their dog groomed and bathed before picking up their
pet. These other service customers will also see the value in daycare and a
lot of them will become regular daycare clients. In our society of
convenience people are inclined to frequent businesses that provide a
variety of services in one place. The other unique advantage to this industry is that, it is common place to establish very close relationships with your customers, more so than with a traditional service business. Even closer relationships than they have with their veterinarians that they may see every couple of months. Think about how many times a week do you eat at your favorite restaurant? Or go to your local barber? Maybe a once every couple of weeks, and you may even know your favorite waitress or barbers name, but still don’t really have anything more than a professional relationship with them, as your interaction is solely based on paying for the service provided.
State: Florida
Location: Commercial in the City along a
major commuter route
Services: Dog Daycare, Grooming, Dog
Boarding and small amount of retail.
Staffing: 2 (Husband and Wife)
The next section was not in the original manual that written some 6 months ago, since then I have contacted this same facility and they graciously provided me with some updated financial information.. (Thanks, Susan)
There is some variation between the software that they use and the QuickBooks Profit and Loss sheets below though both are from the same facility, this is normal.. A lot of refunds, credits, coupons etc.. will be handled differently by the Dog Daycare Software than it is by QuickBooks and some need not be entered into QuickBooks anyway as they have no effect on your taxable situation.
The chart below shows you the typical rate of growth for an effectively managed, customer service oriented, efficient facility. Keep in mind the total size of this particular Doggy Daycare is 2800 sq/ft, not huge by any means but effective. Profit is the amount of money you take home and put in the bank (AFTER TAXES), so in the beginning why pay twice the rent to have a 6000 sq/ft facility that generates the same gross as a smaller facility? As you grow your business, grow your facility...
What becomes apparent is that by advertising sparingly and networking heavily while providing great customer and dog service this Dog Daycare facility increased by it's revenue each and every month of operation. You will also notice the huge spike in revenue for December. Dog Boarding and Dog Grooming will generally be off the charts and busier than you can imagine during this month..
In the two charts below you will notice the initial customer spike in August, this is the result of a huge 3 page full color article toward the end of July coming out in a rather affluent publication in the area concerning the new dog daycare in town. This caught the attention of a local t.v. station which ran a segment on the 5, 8 and 10 O'clock news. This resulted in a number of "try it out's" bringing their dog to the facility for daycare, as a result of the press and then dropping sharply off once all the fuss died down. What should be most striking about the charts below is that after the spike, steady business continued to grow. Daycare moved into a more predictable growth pattern, while the press created a lot of new boarding customers that really grew the business (Check Outs per Month) is the total for boarding and Daycare.
The actual Check Out numbers for the first 8 months are as follows.
When averaged out this equals around 14 dogs per day at the facility boarding or in Daycare over the course of the previous 8 months. Which for a newly established Dog Daycare operating out of a 3500 sq/ft location is pretty good, especially considering the initial 3 months were almost nil.
The following is the gross profit as printed out by the Software they are using for the same time period covered above. You can see the steady growth in revenue that sound management and efficient operation can generate, again there is the ever present holiday spike in December. Also you should notice that regardless of the check in drop off's in daycare (the previous two charts) in September amounting to a little over $500.00 of the monthly total, the actual gross profits rose substantially during this period as a result of offering additional services like Dog Boarding and Dog Grooming.
[1] This company only carried a small retail section, consisting of collars, leads, and home baked dog treats. Yet as the number of customers increased in May so did the amount of impulse sales at the counter. [2] While Daycare was still a bit slow in May, Grooming carried the company as the ability to let the dogs play and socialize in a cage free environment before and after grooms brought in a lot of customers. [3] This is the total amount that was generated the first month. The second month in business shows a 122.35% increase in sales, and a 154% increase in net profit with only a 22% reduction in operating costs [4] This is the Groomers Commission, 50% on any Grooms that she performed. During this period you should be watching and learning, so as you can do this yourself. [5] The majority of your advertising will be spent during the first to months to get the word out that your in business, do not expect people to just beat a path to your door if you fail to let them know you exist. In April advertising consisted of print ads in the local newspaper, and flyers that were printed up and handed out to the local vets. In May advertising consisted of purchasing a banner and newspaper advertisement [6] These are the miscellaneous items that needed to be purchased, shampoo, nail clippers, mop and bucket, towels etc.. pre opening. [7] Purchased an updated office computer at our request to handle needs of a busy facility. They originally were trying to use an outdated computer they received from an office surplus store as it was cheap, (it crashed 4 days into operation of the business) [8] Additional items, that were needed for the business to function properly, added double gates at our request to the outside area to lesson the chance of escape [9] Although $1063.82 may not seem like a lot, it’s over $3000.00 more than the previous month. It is also highly successful to be turning a profit in the second month. [10] This is normal during the first month of operation and the reason that you should have cash reserves.
[11] While retail did not grow dramatically during this month, we were able to provide the owner with a different supplier to lower cost and advised them to only sell those items that move quickly and provide a great markup, as unsold items tie up capital. [12] Again Grooming provided significant revenue for this company during the month of June, while having let the groomer go this translates into a 100% of the income going to the company [13]At the end of the third month in business boarding is beginning to take off as customers love the idea of their dogs being allowed to play and socialize during the day as opposed to being crated or caged the entire time. [14] By utilizing our advise to change suppliers this facility owner realized a 25% reduction in cost for retail items. [15] By Shadowing the groomer for the previous 2 months, this owner was able to learn the basics of grooming and take the task on themselves, and with that 100% of the profits from the grooming portion of the business [16] We advised this operator that is would be in their best interest to purchase Business Liability insurance to protect themselves in the event of an accident should happen. It is a fact of this business that eventually a dog will injured or die while in your care, and most of the time through no fault of your own. [17]Murphey’s law applies here as there was a problem with the plumbing and a contractor had to be called to clear the line. [18] Miscellaneous items, such as lunch with the local animal rescue league director and humane society chairman [19]As you can see this business is starting to do well, with another over 280% increase in profits.. At this point the owners have still yet to take a paycheck, yet there is enough available for a small salary. You should also be replenishing your reserve funds by now and establish an account into which you deposit 10% of your profit for company savings. You should also be paying back yourself for capital that you spent to open the business as well as any loans.
[20] At end of the 4th month Daycare has actually caught up to the other services and is showing a 50% increase in sales over the previous month. This is a company destined for success [21] By releasing the groomer and taking over the grooming business themselves, some clients were lost which is not a negative and par for the course. The business is still making over $3000.00 per month without having to split it 50/50 with a groomer [22] Gas costs money and you should bill your company for the costs of coming back and forth to work as well as any repairs made to the vehicle while it is being used for company business [23] This reflects the cost of accepting credit cards for the business, generally a fee of .25 cents per transaction and 1.25% of the total transaction will be assessed by the credit card processing company [24] County Business license tax [25] One small news paper add was placed to build up grooming customers. [26] Privacy screening for the parking areas [27] Temporary help was hired on the weekends. It is important that if possible sub contract out the help as you will not be responsible for social security, or workers compensation. [28] Closing the fourth month this company is still increasing it’s sales by 50% this should begin to level off around month 6 at which point profits will only grow by around 15% per month. But as you can see this company is well on its way toward success.
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Dog
Daycare Opening Cash Flow Analysis 
