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You are probably not going to find any reliable statistics as to the number of businesses in this industry that have been either successful or not so successful.
The bottom line is that the overall success and health of the business depends on "YOU" (the individual).
In saying this I mean that it is up to you to perform the proper research on demographics, area economics, median income, population density, traffic routes etc.. before ever even deciding if an area would be suitable. If you fail to do this you are doomed from the start.. as there is just not enough available disposable income within the area to "pay your bills and provide you with enough profit to make it worht your while"
Even after that, it is still up to you to put down sound policies, procedures and practices that ensure the success of the business.
So many individuals that I have consulted or dealt with have this "If I build it they will come attitude". They fully expect to be sitting there just collecting twenty dollar bills from the plethora of customers that will just instinctively flood the establishment on opening day. (this is not the case)
The reality is that if you build it, advertise it, market it, work in it, and on it. Your clientel will grow, slowly at first but it will grow, the first few months are always full of doubt, concern and second guessing the decision that was made to enter this industry.
This is not a business where you sit and play with the dogs all day, although that is a part of it.. "maybe 10%", the reality once again is that you spend most of your time, cleaning, dealing with customers, answering phones, paying bills, doing quickbooks, researching advertising, scheduling, and playing mom or dad for your employees.
The moral of what I am trying to say is this.
If you do the research and take your time to learn and study the business and the area, and open the right size and type of facility for the area in which it is to be based, and run that facility efficiently and effectively you will be fine.
It's when you go in to deep from the start, or over build for the area, or expect to be an absentee owner that the problems begin.. Remember that it is not the amount of money that you make but the amount of money that you keep that determines your profitability..
In a simple form think of the following scenario and compare two business..
Dog Daycare A:
a small 2000 sq/ft facility that does a mix of daycare, grooming and some boarding is generating.. $350 a/day (again this is just a simple example).
The rent is $1600 per month (or roughly $10 per sq/ft), utilities run $400 and they have two part time employees that cost the business another $1400 per month, lets not forget misc supplies (grooming,paper,mop heads, bleach etc) at an additional cost of $200 per month. Loan repayment... is another $750 per month on an initial outlay of $40,000
Total expenses= $4350
Total Gross Income=$9100 (figured as 26 avg working days in a month..)
Net Profit=$4750 per month or $57,000 per year (pre tax)
Dog Daycare B:
A grand facility with 10000 sq/ft of play space, all the latest grooming equipment, two groomers, 8 employees, that is fully staffed overnight etc. The whole enchilada, if there was a doggy heaven this would be it.. making $1250 per day
Now into the expenses.. 12 employees at $8 per hour cost a cool $16640.00 per month pre ss and medicare employer contribution. Two groomers on commission get another $4500 per month, rent is $8333.00 per month at $10 per square foot, utilities are $2000, Misc expenses are $1500 per month. Plus Loan repayment... of $7793.11 per month on a $500,000 outlay.
Total expenses= $40766.11(Thats just to break even every month)
Total Gross Income=$45500
Net Profit=$4733.89 or $56806.00 per year
Odd as it may seem, in this case the smaller facilty owners actually take home a touch more every year, with about 5% of the headaches as the larger facility. Bigger is not always better, and the other important consideration is the the expenses start as soon as you open the doors, regardless of whether or not the income is there.
So build the right size facility in the right place, and run it like a business and you will be fine.. If not then you are setting yourself up for failure.. makes no difference whether your running a Dog Daycare, or an Ice Cream stand, certain business principles are the same and that is that in order for it to be profitable, the income has to be in excess of the expenses by a good margin and it has to be run like a business.
Sorry for running on so long with this, but just wanted to get the point across..
Bandit, |
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