PetResort - Final
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BSM-MBA Romanian-Canadian MBA program – Graduation Project August 2009
“PetResort” - Pet Hotel Startup Business Plan
Madalina Lupica Gabriel Vlad Bogdan Chirila
“PetResort” – Pet Hotel Startup Business Plan
Table of Contents 1.
Executive Summary...................................................................................3 Ownership........................................................................................ .............3 Startup Summary................................................................................ ..........3 Location and facilities...................................................................................3 Business description.....................................................................................3 Key Financial Indicators.................................................................................3
2.
Company Description.................................................................................3 Ownership & Management............................................................................3 Startup Summary................................................................................ ..........3 Location and facilities...................................................................................3
3.
Business description..................................................................................3
4.
Marketing Audit....................................................................................... ...3
4.1.
External Analysis....................................................................................3
4.1.1.
External environmental analysis..........................................................3
Social............................................................................... .............................3 Legal.................................................................................... .........................3 Economic......................................................................................................3 Technology................................................................................. ...................3 4.1.2.
External situation analysis...................................................................3
Industry Analysis.................................................................................. .........3 Market Analysis............................................................................... ..............3 Marketing Mix (The Five Ps of Marketing)......................................................3 Competitor Analysis......................................................................................3 Customer Analysis........................................................................................3 4.2.
Internal Situation Analysis......................................................................3
4.3.
SWOT......................................................................................... .............3
Strengths......................................................................................................3 Weaknesses..................................................................................................3 Opportunities................................................................................................3 Threats................................................................................................ ..........3 5. 5.1.
Strategy.................................................................................. ...................3 Strategy framework................................................................................3 P a g e | 2|
“PetResort” – Pet Hotel Startup Business Plan
5.2.
Mission............................................................................................. .......3
5.3.
Vision..................................................................................... .................3
5.4.
Objectives.................................................................................... ...........3
5.5.
Competitive position...............................................................................3
5.6.
Competitive advantage..........................................................................3
5.7.
Competitive tactic.................................................................................. .3
5.8.
Key Success Factors................................................................................3
6.
Marketing....................................................................................... ............3
6.1.
Segmentation, targeting, positioning......................................................3
Segmentation.............................................................................................. ..3 Targeting................................................................................... ....................3 Positioning................................................................................................... ..3 Marketing Plan..............................................................................................3 Marketing Timing..........................................................................................3 7.
Operations.................................................................................................3
7.1.
Running PetResort..................................................................................3
7.1.1.
Setting up Space.................................................................................3
7.1.2.
Areas Needed......................................................................................3
7.1.3.
Layout and Design...............................................................................3
7.1.4.
Special requirements...........................................................................3
7.2.
Equipment and Supplies.........................................................................3
7.3.
For the Pet Hotel.....................................................................................3
Pet Hotel Checklist........................................................................................3 Dog Walking Checklist.............................................................................. .....3 Obedience Training Checklist........................................................................3 Spa/Grooming Checklist................................................................................3 7.4.
For The Office.........................................................................................3
7.5.
Selling Pet Supplies.............................................................................. ...3
7.6.
Setting our Fees............................................................................. .........3
7.7.
Factors that Affect Our Fees....................................................................3
7.8.
Policies and Payment..............................................................................3
Setting Policies..................................................................................... .........3 7.9.
Day-to-Day Operations...........................................................................3
7.9.1.
Scheduling............................................................................... ............3
7.9.2.
Hiring and Managing Staff...................................................................3 P a g e | 3|
“PetResort” – Pet Hotel Startup Business Plan
Getting Ready to Hire............................................................................... .....3 Keeping Employees Happy............................................................................3 7.9.3.
Hygiene, Health and Safety.................................................................3
Cleaning Routine.............................................................................. .............3 Caregiver Safety...........................................................................................3 Pet Health and First-Aid.................................................................................3 Handling Client Complaints...........................................................................3 7.9.4. 8.
Pet Hotel Registration Form.................................................................3
Financials.............................................................................. .....................3
Bibliography.................................................................................. ...................3 Appendix 1 – Car Lease....................................................................................3
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“PetResort” – Pet Hotel Startup Business Plan
1. Executive Summary PetResort is a new company established by three MBA graduates from the BSM-MBA program. It operates in the travel industry, providing accommodation and associated services for pets. It caters to dog owners who consider their pets part of their family and who earn enough to afford premium products and services for their dogs.
Ownership PetResort is owned by the three graduates in equal shares and is incorporated as a LLC (SRL).
Startup Summary The owners of PetResort each contribute 210,000 RON in cash or land to the startup. The rest of the initial expenses are financed through a bank loan. The amount of the loan is 300,000 RON over 5 years at 15.62% interest rate with 6 months grace period.
Location and facilities The location is in Buftea, a rapidly developing area near Bucharest.
Business description The pet hotel strives to create an environment for the pet that is as much as its home as possible. Dogs enjoy large private rooms as well as daily social time in a play group with other dogs. Other services provided by PetResort include: •
Transportation of dogs to and from the hotel, which is provided free of charge for a minimum stay of one week.
•
Daycare services. Dogs are dropped off in the morning and picked up in the evening. During the day they can play with other dogs in the play area, under supervision.
•
Grooming services such as nail trimming, brushing, cleaning and bathing.
•
Spa services: Pet pedicure, Teeth brushing, Toenail polish and fur coloring, Doggy facial, Hair “styling”, Doggy workout, Aromatherapy or special bath soaps, Massage.
•
Obedience training. Basic obedience training is focused on teaching a dog words or commands that make life with the pet easier, such as how to P a g e | 5|
“PetResort” – Pet Hotel Startup Business Plan
come, sit, stay, get down, meet new dogs or people calmly, and walk on and off a leash. This type of services can be also considered a business of “guilt removal”. While the owner is away on vacation or business, the favorite pet can also have a great time in a posh hotel. The owner can enjoy the time off without the guilt, knowing that the dog is well taken care of.
Key Financial Indicators Profit and Loss Statement (Income Statement)
Cash Flow
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“PetResort” – Pet Hotel Startup Business Plan
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“PetResort” – Pet Hotel Startup Business Plan
2. Company Description PetResort is a new company established by three MBA graduates from the BSM-MBA program. It operates in the travel industry, providing accommodation and associated services for pets. It caters to dog owners who consider their pets part of their family and who earn enough to afford premium products and services for their dogs.
Ownership & Management PetResort is owned by the three graduates in equal shares and is incorporated as a LLC (SRL). Management functions are distributed among the owners and day to day operations are ensured by an Operations Manager, who is a trustworthy person and a close relative to one of the owners. The Operations Manager is the interface to the customers and also works closely with the employees in order to successfully perform daily activities. Living on the premises, the Operations Manager will also ensure 24x7 on-site presence. PetResort will also employ a dog trainer, a dog caregiver and a janitor. They would all report to the Operations Manager. Medical services and grooming services are provided onsite by contractors.
Startup Summary The owners of PetResort each contribute 210,000 RON in cash or land to the startup. The rest of the initial expenses are financed through a bank loan. The amount of the loan is 300,000 RON over 5 years at 15.62% interest rate with 6 months grace period.
Location and facilities The location of the pet hotel is critical to its success. It needs to be near large urban areas with lots of people who work good-paying jobs and travel often. Since Bucharest and the adjacent areas fit by the above requirements we considered a strip of land which was already purchased but was unutilized. The location is in Buftea, a rapidly developing area near Bucharest.
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“PetResort” – Pet Hotel Startup Business Plan
3. Business description The pet hotel business is well established around the world. It aims at providing better services than the regular kennel. The pet hotel strives to create an environment for the pet that is as much as its home as possible. Dogs enjoy large private rooms as well as daily social time in a play group with other dogs. Other services provided by PetResort include: •
Transportation of dogs to and from the hotel, which is provided free of charge for a minimum stay of one week.
•
Daycare services. Dogs are dropped off in the morning and picked up in the evening. During the day they can play with other dogs in the play area, under supervision.
•
Grooming services such as nail trimming, brushing, cleaning and bathing.
•
Spa services: Pet pedicure, Teeth brushing, Toenail polish and fur coloring, Doggy facial, Hair “styling”, Doggy workout, Aromatherapy or special bath soaps, Massage.
•
Obedience training. Basic obedience training is focused on teaching a dog words or commands that make life with the pet easier, such as how to come, sit, stay, get down, meet new dogs or people calmly, and walk on and off a leash.
This type of services can be also considered a business of “guilt removal”. While the owner is away on vacation or business, the favorite pet can also have a great time in a posh hotel. The owner can enjoy the time off without the guilt, knowing that the dog is well taken care of.
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“PetResort” – Pet Hotel Startup Business Plan
4. Marketing Audit 4.1.External Analysis 4.1.1.External environmental analysis Social During the last 6 years in Romania the middle class increased due to the economical development. In Bucharest this social category is higher than in other cities of Romania, due to the fact that most important companies are located here. The higher income has driven to a change in consumption behavior; middle class is the target for supermarkets, real estate developers, tourist agencies, restaurants, clubs etc. Usually, this people are 30-45 years old, have an income above average, are living in new condominiums or houses around Bucharest, have 1-2 children, use to go in vacation outside the country. During the year they travel a lot, both business-related and for vacation.
Legal Romania has harmonized its legislation regarding pets with the European Union legislation. The governing laws in Romanian legislation are as follows: HCGB 75/96, HCGB 243/2005, OUG 155/2001, Law227/2002, Law 205/2004, and Law 9/2008. Due to higher legislative focus on animal care our high quality services should be favored by the improvements in legislation.
Economic Starting with 2001 and until 2008 Romania’s GDP increased every year; the average income increased and the structure of population’s consumption modified (in 2008, 28% of expenses were for services). In 2009 Romania was affected by the crisis, in the first quarter GDP registered a 6.5% decrease comparing to 1st quarter 2008 and prognosis for second quarter shows 8-9% decrease of GDP.
Technology The economical development and Romania’s integration in EU made technology very accessible for Romanian population, especially those who are living in big cities. The increase of internet usage is the highest in Europe and nowadays Romanians are used to purchase goods or services or to take information from internet. P a g e | 10|
“PetResort” – Pet Hotel Startup Business Plan
4.1.2.External situation analysis Industry Analysis •
Rules of the game – pet hotels in Romania are satellites to vet clinics, educational schools or breeding farms; because there are just a few companies in this industry, they are not competing directly: their focus is to attract new clients, to maintain existing ones, to create the need of the service. The prices these companies are operating with are meant to convince potential customers that this service can be affordable for them. Doesn’t matter if they are offering indoor, outdoor or both accommodations, the added value that is stressed in promotion is the permanent care, permanent medical surveillance and the playground dedicated to dogs. Another point stressed in promotion that these companies are performing is the previous experience of the owner and / or employees like vet physician or dog breeder.
•
Strategic groups – Based on Price and Location as criteria:
Price 100
PetResort Marcovet
Gabriel Cocu Kris
Cabanova Pet Joy Super Pet Petland Alpera Eleven Best Life Blue Vet
Zoopensiune K9Studio Aldo LagunaVerde Bella Tara's Caini-ham Pekingese
Chino Impex Regal Canin Mash Pensiune Shalimar Vet LeonardSumlea
Country
Bucharest and surroundings
50
5
•
Location
Industry life cycle – in Bucharest we found around 15 boarding houses for pets and in Romania around 25. This figures compared with total number of households with pets are very low. The degree of occupancy in these hotels is between 60-100%. We consider this service in introductory phase, because the product is quite new and nowadays we cannot discuss about a structured market. P a g e | 11|
“PetResort” – Pet Hotel Startup Business Plan
•
Porter’s five forces Internal competitive rivalry ○
Industry growth – the demand for pet accommodation is still low, but in meantime the number of companies activating in the industry is low, too. Competition between kennels is moderate and is non-prices based.
○
Industry concentration – there are just a few boarding houses for pets in Romania and in Bucharest comparing to number of registered pets. The industry is very concentrated and the prices are not influenced by competition.
○
Intermittent overcapacity – even in periods of the year when pet hotels are not fully booked, they are not decreasing price. Delivering an optional service, not a necessity, the price decrease would not increase demand.
○
Product differences – existing pet accommodation facilities in Bucharest area are linked to vet clinics, training schools or breeding farms; boarding houses are secondary activity; these companies are known in the pet-owner community mainly because of their first activity; because of this we have a high product difference.
○
Brand identity – the small number of persons who are using this service tend to be loyal to the boarding house they know, because of different reasons: the hotel is in neighborhood, if they were satisfied once with service they see no reason to change it, they assume that their pet will feel better in a known place cared by known persons; they trust the vet doctor who owns it.
○
Switching costs – the alternative for leaving the pet in a kennel is to take it with you in the vacation- an option which is more uncomfortable and costs more or to leave it in the supervision of another person (friend, relative, and neighbor) which is risky and problematic; so, the switching cost for pet care service are high.
○
Informational complexity – for a pet owner the information delivered by companies which are playing in the industry is not very complex; it is quite easy to compare offered services.
○
Corporate stakes – because the small number of firms in the industry and the reduced number of persons who aced this service, the fight is for creating a market more than fighting with competition. P a g e | 12|
“PetResort” – Pet Hotel Startup Business Plan
○
Exit barriers – are low because accommodation facilities can be used for other purposes: training, pets for adoption, hospital.
Entry barriers In pet boarding service, the proprietary learning curve makes the access to know-how quite difficult, the investment is high, the proper place to develop facilities is very hard to find, there are legal regulations that should be followed and the identity of the brand and of the owner is very important. All these makes access to this industry quite difficult. Threat of substitutes A substitute for pet care consists of dog trainers which are working on the black market. Bargaining power of buyers The actual market for pet hotels is undeveloped, so buyers cannot influence the price level; on the other hand, buyers have a big impact on the quality and performance of services offered. Because the nature of the business is very emotional (owners are considering and behaving with pets like their own children) they are choosing very carefully the hotel in which they let the pet while they are away from home. Aspects like: heating and air conditioning, playground, medical surveillance are very important when choosing pet hotel. Bargaining power of suppliers ○
The land on which to build a pet hotel - the rent or price for land around big cities is decreasing, but still very high; big surface lands, suitable for this business (around 5.000 square meters) are hard to find.
○
Pet food - this industry is very dynamic; after EU integration, pet food prices decreased and the market increased 10 times comparing to 1999. The main players (medium and premium) are very interested in making contracts with pet boarding houses, especially with those which have a pet shop, too.
Market Analysis Market analysis is mainly based on direct observation, interviews, and magazine / website articles. Statistical information is quasi-inexistent or is achieved on demand by large pet food corporations who can afford it. •
Market growth rate - taking into consideration that existing kennels in Bucharest have average occupancy 80% all year long and 100% during vacations (summer and December), the market growth cannot be determined P a g e | 13|
“PetResort” – Pet Hotel Startup Business Plan
so accurate and in the end has no such importance because the need, as small as it is, is not completely satisfied •
Market share - if our dog hotel will have 30 lodges, our market share will be around 9% (if no other kennels will be opened in this time frame)
•
Market concentration - because the number of lodges/hotel is quite low (from10- 40) the market is very diluted; the first 3 companies have 30% of the total capacity in Bucharest region
•
Penetration - Considering there is no statistical data on this market we had to come up with a way of computing the market penetration. We have identified 12 hotels with an average number of lodges of 30. Considering occupancy as reported by several owners is 100% in the summer months and December, and that it falls to about 60-70% in the rest of the time, we concluded that: ○
60-70% of occupancy is coming from regulars. They are likely to use the services about 10% of the time (3 days per month). This turns into an average of 200 customers per hotel, resulting in a total of 2400 regulars.
○
The rest of occupancy during peak months is coming from “vacationers”. They are likely to use the service for about two weeks per year. This results in 3120 “vacationers” (52 weeks / 2 weeks => 26 per lodge * 10 lodges = 260 per hotel * 12 = 3120).
○
We have computed a target market of 20-25 thousands and a penetration of between 5 to 6 thousands. Penetration rate resulted is roughly 25%.
Competitor Analysis Considering our pet-hotel is located near Bucharest, we analyzed existing pet boarding houses from this region. Pet hotels are connected to veterinary clinics, breeding farms or training schools for dogs. Most of them are offering accommodation for dogs, cats and other kind of pets (birds, reptiles). Usually they have pet shops. There are a few hotels operating in apartments. Their main goal is to attract potential clients (pet owners) and to convince them that during holidays they can leave the pet in their care and the pet will feel like home and will have good living conditions, proper food, place to play, company, and medical surveillance. Our competitors’ strengths are: •
Previous experience in working with pets (like breeders or doctors or trainers) P a g e | 14|
“PetResort” – Pet Hotel Startup Business Plan
•
Connections with pets owners society
•
Related services which they offer
•
For some of them location (near residential areas, good access to main roads, on the way to airport, in or very close to Bucharest)
Weaknesses: •
Accommodation organized in apartments (less place to play for dogs, many pets are living in the same room, pets are taken for a walk on the street)
•
Weak marketing (poor websites or no website, hard to find on internet, locations hard to be found)
•
No clear positioning regarding target, price policy, additional offers
Customer Analysis The customers for pet boarding houses are pet owners who go on vacation and in weekends out of the city, who have frequent business trips (target for night care and long accommodation period) or who spend a lot of time at work or at shopping (target for day care). Daycare is not so developed yet as a pet service in our market. If no member of the family is staying at home or if they don’t have where to leave the pet when they are away, they are using this service. Usually customers are choosing the kennel based on the following criteria: •
Services offered (existing playground, separate lodges, medical surveillance)
•
Distance from home
•
Previous experience
•
If they were customers of the same company for different services (ex.: if the dog was bought from a breeding farm and the farm has accommodation facilities, too, they will go there; if the dog was treated by a certain vet clinic or was for training in a certain training school, and the clinic or the school has boarding house, too, the owner will leave the dog there when he is out of town).
•
Word of mouth
Because this kind of persons are very emotionally involved in the relationship with the pet, the quality of the service, the offered conditions and the personnel of the hotel are very important in the final decision In the period of vacations (in summer and in December) existing pet hotels have full booking, so clients have to make early reservations. The decision where to leave the pet is made at least two weeks before accommodations starts. P a g e | 15|
“PetResort” – Pet Hotel Startup Business Plan
The sources of information for pet boarding service are: •
Friends, relatives and other pet owners
•
Internet
•
Advertising made on pet shops, vet clinics etc.
4.2.Internal Situation Analysis Corporate Objectives: •
Our intention is to have a functional dog hotel in 12 months for 30 dogs, pet shop and grooming and spa.
•
In 3 months to reach occupancy percentage of 60%.
•
By year end FY 1 to have average occupancy 70%.
•
Expansion of capacity by year end FY 5 with additional 30 lodges.
•
Expansion of capacity by year end FY 10 with another 60 lodges in another location.
•
Franchise by year end FY 11.
Marketing Objectives: •
Assess market for dog hotels in or near Bucharest.
•
Reach 4% share in target market in 3 months from opening.
•
Reach 5% share in target market in 12 months from opening.
•
Increase awareness and need in order to achieve 100% growth in 5 years, and 200% in 10 years from opening.
4.3.SWOT Strengths •
Our business know-how
•
Our high communication skills
•
Connections in dog owners community
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“PetResort” – Pet Hotel Startup Business Plan
Weaknesses •
Lack of industry knowledge
•
High cost structure
•
Bank loan for initial investment
Opportunities •
Unfulfilled customer need - the market is in initial phase and will increase
•
New ring and bridge will be built in Bucharest exit, before Buftea, which will make access to our hotel easier and will drive real estate in this part of the city
Threats •
Decrease of family budget percentage allocated for pet care due to financial crisis
•
Increase number of competitors
•
Decreasing number of persons who will go out of city for vacation, weekends
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“PetResort” – Pet Hotel Startup Business Plan
5. Strategy 5.1.Strategy framework Our strategy is to differentiate our dog hotel via specialization. Our activity will be concentrate on accommodation, day and overnight care and in this area we want to be experts. Our regional competitors have like main activity other services (medical, training, breeding) and are offering only additional boarding for pets. Most of them are working with other categories of pets, too (cats, birds, reptiles) which have different needs, programs. Our strategy is based on the following guidelines: •
Startup a dog hotel business in a location near Bucharest
•
Services offered will be of high quality
•
Target are high income dog lovers from Bucharest area
5.2.Mission Our mission is to offer to dog owners who need from time to time to leave their pet in a comfortable, safe place a with high care standards and reliable services available anytime. We will put all our knowledge and imagination at work in the benefit of the dogs, offering them: spacious lodges, a generous playground, experienced dog-sitters, medical surveillance, transportation, spa and grooming services to make dogs feel like in a second home. We understand that our guests need human contact, exercise and stimulation. We value love for animals and genuine desire to make them feel as good as possible. Our main goal is to create a pool of faithful clients who will come back to our hotel anytime they need.
5.3.Vision We distinguish ourselves as the leader in redefining dog boarding business in Romania, with the most complete dog care services.
5.4.Objectives •
Functional dog hotel in 12 months for 30 dogs, pet shop and grooming and spa P a g e | 18|
“PetResort” – Pet Hotel Startup Business Plan
•
In 3 months to reach occupancy percentage of 60%
•
By year end FY 1 to have average occupancy 70%
•
Expansion of capacity by year end FY 5 with additional 30 lodges
•
Expansion of capacity by year end FY 10 with another 60 lodges capacity in another location
•
Franchise by year end FY 11
5.5.Competitive position •
Luxury hotel for dogs near Bucharest targeting the Bucharest region
•
Main activity is accommodation for dogs while their owners are away in vacation or business trips or at work
•
Day care and overnight care services; daycare service being a novelty in Romania
•
Grooming and spa services for dogs
•
Best conditions in the regional market: spacious lodges, generous playground, professional care, medical surveillance
•
Pick-up service: transportation from and to home
•
Targeting “people like us” – middle class, workaholic, busy, who go out of town during weekends and vacations and who also go a lot of business trips
5.6.Competitive advantage •
First dog spa facility in the region
•
Daycare service
•
Brand enforced by premium complementary services (spa, transportation, web cameras)
•
Trained staff
•
24x7 onsite services
5.7.Competitive tactic •
Leading edge of technology for materials, equipment and spa P a g e | 19|
“PetResort” – Pet Hotel Startup Business Plan
•
Large playground area with swimming pool for dogs
•
Specific trainings (such as First Aid) and visits to premium dog hotels abroad
•
Personalized services to regular clients
5.8.Key Success Factors •
In this industry the love for animals is from where you start; is a must, but not enough for being a successful pet hotel manager; dog owners are very emotionally involved about their pet and they will feel if you really like dogs
•
The second important key success factor is knowledge about pets (anatomy and behavior)
•
Superior customer service – 24 hour high quality care and service
•
People skills are very important to keep in our hotel the staff and for relating to customers; it is very important for them to know that they left their pet in the care of a trustable, nice person
•
Pet industry resources - is important to be updated with the newest and the best products in the industry: pet food, vaccines, products for biological safety
•
Connections in dog owners community - knowing and being known by dog owners, vet doctors, people from breeds associations can improve the word of mouth about a pet hotel and help business
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“PetResort” – Pet Hotel Startup Business Plan
6. Marketing 6.1.Segmentation, targeting, positioning Segmentation We consider potential market all persons who: •
Own a dog
•
Live in Bucharest or in satellite municipalities
•
Consider the dog like a member of the family and that dog’s needs and care are important
•
Have medium or high income
•
Have long periods of absence from home (busy with their jobs, travel because of business or for entertainment purposes)
Our most important group of customers are those who do not have as much time as they desire to invest in their pets and are willing to seek additional help regardless of costs. In this pool of potential clients we identified 3 segments: •
Other brands loyal - persons who tried the services of the existing pet boarding houses, were satisfied and comfortable with the offered conditions and will not switch the company - this segment is made up from regular customers (around 2,400) and some casual customers
•
Other brands switchers - persons who were clients of the existing hotels, but they are open to try another option - a small percentage of regular customers and casual customers.
•
Non-users of the service who could try the category via our services.
Because up to our calculations the number of customers that existing accommodation facilities for dogs have is between five and six thousand, this first 2 segments have a low share in the total potential market. The third segment is strongly represented; according to our understanding it is up to 20.000 persons and is growing with 40% per year.
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“PetResort” – Pet Hotel Startup Business Plan
Targeting We decided to target the last two segments: other brands switchers and non-users of pet hotels for over-night care. Other brands switchers is a small segment of the potential market (up to 3.000 persons), but the good thing about this category is that they discovered the appetite for using this service. They can choose our facility because of different reasons: •
Convenience
•
Better services
•
Better image and reputation
•
Additional services offered
•
Novelty
•
Trend
The challenging aspects of this segment are that they can be problem-customers who can have false objections and the benchmark they will do with previous service providers. Immediately after the opening we can have them like first target group. The second segment is the pool of non-users, potential clients. For reaching this segment and making them users of the service we have to invest in education and advertising, but the potential of this segment is very big and they are very important for our turn-over and future development. For day-care, which is a new service in the industry, being the first on the regional market who have this like a business objective, we have to educate potential clients and create the need.
Positioning We position our hotel as specialized for premium dog accommodation at a premium price for overnight care and we intend to be the first who will focus on day care. Picture of typical client: our clients are be “people like us”: dog lovers, middle class, middle to high income, very busy, spending a lot of time at work and willingly to go out of the city for weekends and vacations. This people are living in condominiums or villas in the peripheral area of Bucharest or in suburbs. They use to make shopping from supermarkets in the evening or in weekend. They are used to search for information from internet and from colleagues and friends. They have a modern life-style and they value the comfort and convenience. When making an acquisition they are very discerning and demanding, but in meantime they are following trends. No matter if they have family or they are single, they consider the dog a member of the family and they are very emotionally involved about it; the same demands that they have when they purchase a product or service for them have when they buy something for the dog. P a g e | 22|
“PetResort” – Pet Hotel Startup Business Plan
6.2.Marketing Plan When we drew our marketing plan we asked ourselves what’s most likely to attract out target market to book in at our hotel.
Website Today’s consumers expect any company to have a web presence and may even decide not to do business with somebody who neglects this aspect. We consider the website the most important tool of our marketing plan. A member of our team will create and take care of it, because updating and adding to it all the time seems to us equally important. What to include - the focus of the site should be explaining the pet services we are providing and the benefit of the pet and the client. Images with cute pets are the standard of the industry. Other items we need to include: •
prices and packages
•
images of the facilities (lodges, play areas)
•
pictures of the staff
•
a picture gallery of dogs we cared for
•
testimonials from clients
•
FAQ
•
Products available in pet shop
•
Current promotions
•
Registration form (PDF)
•
Our policies
•
Contact data
Our site address will be listed in all printed materials that we will have (business forms, cards, brochures). Search engine optimization is another concern for us. We will assure that our site will show up when people will search for it.
Business cards Business cards will be for start handed out to all potential clients and given to family and friends to pass out. On business cards we will state the hotel name, phone number, location, e-mail address and web site. On verso we will print a small map. P a g e | 23|
“PetResort” – Pet Hotel Startup Business Plan
The business being very personal, we consider that a photo of a nice dog head will not be out of place.
Brochures Brochures will be needed for mail-out, and can also be left with other pet services or pet products providers. Because we will charge premium, the quality of the brochure will match the price of our service. The purpose of the brochure is to pique interest on the service and the facility.
Advertisement Ads need to be designed to catch the clients’ attention and to pique their interest in some way. We choose to have artwork on our hotel’s vehicle. We will have ad in Yellow Pages. We will have coupons (printed by ourselves) in a very important Romanian pet magazine: “Dog Magazine” after opening the facility.
Press release We will have a press release at opening, another one before vacation season and another when we will increase our capacity.
Donations and sponsorships Because we will be premium dog hotel and we will offer additional luxury service (like spa for dogs) we will find a champion dog in Bucharest and offering him free accommodation and access to spa for life and in exchange we will ask owner to use dog’s name and image. Connection of our hotel with the champion will be mentioned in all our promotional materials (on site, brochures, and flyers).
Referrals and word of mouth We consider referrals and word of mouth the main sources of new clients for our hotel. There’s also a lot of benefit to remind past clients of our services just in case that they will need it again. Here are some way to create word of mouth and building relationship with clients or their business people. From other businesses Arranging partnerships with other businesses which reach out target market can be very effective. We are thinking at vet offices, pet supply stores, pet shops, pet sitters, dog walkers and trainers. These people are meeting with our target market daily and are frequent in a position to refer our services to their clients, if they will be convinced that we are offering good services. We do not stop at pet businesses: other businesses which can be a rich source of clients are travel agencies. We discussed with a travel agency which’s target are people with high income and the sales director from the agency was very open to a cooperation with us. They consider that having a connection with a trustable dog hotel will improve the level of their offered services. For agency’s clients who are living out of Bucharest and want to be clients of our hotel, we designed an additional service: they will come to our location by car with the dog, they will leave the dog in our facility and we will drive them to the airport and back with their car; while they are in vacation their car will remain in our parking and when coming back P a g e | 24|
“PetResort” – Pet Hotel Startup Business Plan
they will take from us the dog and the car. In this way, we will not limit the cooperation with agency to Bucharest area clients and they will have free parking for vacation period. In the end of the day, it’s important to say “thank you” to every business contact that will refer clients to us for keeping the good relationships. From satisfied clients The best ways to generate word of mouth business from our clients is to do great work and to offer exceptional services. We will make sure that our clients will be 100% satisfied, and we are sure that they will start telling people about us. To add value to our services we intend to do some additional things like: •
sending newsletters
•
sending e-mail on the pet’s birthday
•
having webcams which clients can access online
•
adding extra services free of charge or pet gifts for the ones who are coming several times or for dog accommodation longer than 10 days
We are sure that all this small attentions will pleasantly surprise our customers and make them the best promoters of our dog hotel.
6.3.Marketing Timing Our long-run marketing strategy is a simple one: satisfied customers are our best marketing tool. When a customer leaves our business with a happy pet knowing that it has had a fulfilled day, our name and service will stand on its own. But in the start-up period we will have to promote our service to as many targeted persons as possible. Our marketing timing is: •
2 weeks before opening ○
Contact our future business partners for starting negotiations
○
Start spreading flyers to friends, relatives, colleagues to give them further to dogs owners
○
Contact “Dog Magazine” staff to negotiate an add with coupons in one of their issues
○
Get the list of registered dogs from “Bucharest Dog Association”
○
Website launch P a g e | 25|
“PetResort” – Pet Hotel Startup Business Plan
○ •
•
Dealers for toys, pet food
Opening Month ○
Ad in “Dog Magazine”
○
Mail flyers to dog owners from the database
○
Flyers in business partners’ facilities
○
Press release
○
Contract with a champion dog’s owner
Long term marketing activities ○
“Thank you” e-mail to every dog owner 2 days after check out
○
E-mail at dog’s birthday to every client
○
News-letters to every client 3 times per year ( before Easter Holiday, beginning of June - before the summer holiday, and at the end of November when everybody is preparing for Christmas vacation)
6.4.Marketing Mix (The Five Ps of Marketing) Product The main service our small company will offer is accommodation for dogs. Our hotel will lodge dogs for bigger period of time (overnight care service) or only for the duration of the day (daycare service). Additional to this we have in offer other services like: grooming and spa, training and transportation for dogs. All services offered are premium, high quality, at the highest standards. Comparing with other competitors who have pet accommodation like second activity, our company will be focused on boarding services. Our clients will leave their dog in a place which is offering safety, excellent conditions for accommodation and daily activities, medical surveillance performed by highly trained staff with a lot of love for animals.
Price PetResort will be priced at the upper edge of what the market will bear, competing with similar types of services in the area. For our luxury services we will charge premium prices which will reflect our position on the market and the targeted segment of clients. Comparing to other facilities that are offering “hotel” conditions for pets, we have the same price level. Comparing to simple boarding houses or kennels, our prices are a little bit higher. P a g e | 26|
“PetResort” – Pet Hotel Startup Business Plan
Accommodation services for pets are undeveloped, the industry being in introductory phase and the offer is very low comparing to the potential market. The prices our competitors have are not all the time in connection with the level of services, conditions and facilities. We strongly believe that targeted clients, people who are very emotionally involved with their pets will find our offer very good from cost-efficiency point of view. Taking into consideration the forecasted occupancy degree, will allow us to have profit from the first year and to pay off our investment in five years.
Place Because clients want to use an accommodation facility in the neighborhood, we want to reach potential clients from Bucharest and surroundings.
Promotion We will base our promotion on the conviction that in this business the best promotion is word of mouth and referrals from satisfied clients. So, our main promotion tool will be our focus to overpass expectations of all clients through excellent services and dedication to owners’ and dogs’ satisfaction. In the opening period we will try to get to as many possible potential clients. We will mail flyers to potential clients; we will have flyers in the offices of business partners (from pet services and from other industries).We will have an ad in a dog magazine and a press release. We will reinforce to existing clients our brand by sending news letters and e-mails on dog’s birthdays. For faithful clients, for persons who are bringing more dogs and for long-term stay we will offer coupons or spa procedures for free.
People In this business, employees are very important. We will have experienced persons, highly trained for their jobs and with deep love for dogs. They will have complete knowledge on what is expected from them, adequate tools and trainings to fulfill their work, feel supported and respected by the management and staff, and they will have fun at work and a pleasant atmosphere.
P a g e | 27|
“PetResort” – Pet Hotel Startup Business Plan
7. Operations 7.1.Running PetResort 7.1.1.Setting up Space To set up the pet hotel we need a number of subdivided workspaces: an area for our staff to supervise group play a reception area to greet clients and accept payment, area for pets to rest and sleep, and an office for filling paperwork and making phone calls. We also need to equip these areas with the right equipment and supplies.
7.1.2.Areas Needed PetResort has roomy, private spaces for each dog or cat to sleep in, a place for dogs to play or exercise, a lobby for pick-up and drop-off, laundry room and office, storage, and an area for employees to take a break. For dogs we will require a rather large play area - the current industry recommendations are anywhere from 15 to 35 square meters (for an average of 25) per dog in our care, depending on the breed of dog. The play area is outdoors since we have plenty of room and it also includes a pool for completing a safe-and-fun area. We are an all-suite dog boarding and doggy daycare. We have no cages and our suites range from 2x2 to 2x3 meters with sofas and porcelain tile floors.
7.1.3.Layout and Design Considering the flow of dog owners, personnel, and pets on our premises we came up with the following layout which also takes into account the particularities of the land.
P a g e | 28|
“PetResort” – Pet Hotel Startup Business Plan
We also considered the landscaping, as seen in the following perspective:
P a g e | 29|
“PetResort” – Pet Hotel Startup Business Plan
Not all our pet hotel suites are the same size. Also depicted below is the Office Building:
P a g e | 30|
“PetResort” – Pet Hotel Startup Business Plan
7.1.4.Special requirements Our pet hotel features improvements to the ventilation and heating/cooling systems, improved sound resistance, and of course, upgraded flooring. Tile is the most suitable material for certain areas such as rest suites, which are also heated. We also ventilate the building so that there is no offensive lingering pet odor and to reduce airborne viruses, cool or heat it to a reasonable temperature as needed, and provide natural or artificial lighting for pets and caretakers. This helps our pet hotel to be germ and odor free. Most clients should notice that it smells really clean and fresh. Air conditioning is crucial in summer months - even with the dog doors open all day. And heated flooring is especially good in winter months, so the heat is down at the dogs’ level. Outdoors, we build a fence to keep dogs of all sizes secure. This means taking a look at where little dogs could squeeze out, where diggers could tunnel out, and where jumpers could make it up and over. We plan to replace our grass regularly, or look at an alternate outdoor groundcover solution.
P a g e | 31|
“PetResort” – Pet Hotel Startup Business Plan
In terms of security, all our doors will be alarmed, and the hallways are monitored at night, so if a dog gets out or a person breaks in, the system calls manager’s phone and then the police department. Same for smoke detection monitors - it calls managers phone, and then immediately the fire department.
7.2.Equipment and Supplies 7.2.1.For the Pet Hotel Pet Hotel Checklist •
Brushes and combs
•
Crates and accessories
•
Collars and leashes
•
Cleaning supplies (animal-safe) and equipment
•
Dog-safe fencing
•
Drinking water
•
First aid kits (human and pet)
•
Flooring (paw-friendly and easy-to-clean)
•
Food and water dishes
•
Play equipment (slides, pools, etc.)
•
Pet beds
•
Pet carriers for emergency vet trips
•
Pet furniture
•
Pet linen
•
Pet food
•
Registration forms & release
•
Rubber gloves
•
Storage bins
•
Spray bottles P a g e | 32|
“PetResort” – Pet Hotel Startup Business Plan
•
Soundproofing material
•
Throw blankets
•
Treats or toys
•
Uniform (pet-hair resistant)
•
Webcam
Dog Walking Checklist •
Bottled water and a few snacks
•
Bug spray
•
Collar and leash
•
Disposable raincoat
•
Gloves for cold weather
•
Hat and sunglasses
•
Ice walking shoe attachments
•
Poop disposal bags
•
Portable dog water
•
Sunscreen
Obedience Training Checklist •
Agility equipment
•
Clicker
•
Collars
•
Feedback forms / Report cards
•
Harnesses
•
Leads
•
Muzzles
•
Retrieval items
•
Treats / rewards P a g e | 33|
“PetResort” – Pet Hotel Startup Business Plan
Spa/Grooming Checklist •
Animal handler gloves
•
Bows and bandanas
•
Brushes
•
Combs
•
Conditioners
•
Dental care supplies
•
De-tanglers and odor handlers
•
Drain hair catcher
•
Ear cotton
•
Ear grooming tools and supplies
•
Matt splitters
•
Nail trimmers
•
Scissors/shears
•
Shampoos
•
Skin care products
•
Styptic powder
•
Tool caddy or storage
•
Towels
7.2.2.For The Office As a pet hotel business we need an office to keep records and client information up to date. It's important to be able to answer phone calls from clients there. Answering calls while the dogs are barking may make our pet hotel sound unprofessional. Therefore we take calls somewhere away from the action. Our office has a desk where we can write or use a computer, a comfortable chair, a telephone, and adequate lighting. Our reception area includes: •
Artwork
•
Calculator P a g e | 34|
“PetResort” – Pet Hotel Startup Business Plan
•
Calendar
•
Chairs for guests
•
Computer
•
Debit/credit machine
•
Fax machine
•
Filing cabinet
•
Garbage and recycling bins
•
Printer & cartridges
•
Reference books on pet breeds and behavior, and pet health
•
Storage bins or cabinet
In terms of office tools and supplies we consider: •
Agenda or electronic organizer
•
Business cards
•
Cell phone
•
Digital camera
•
Envelopes (various sizes)
•
Paper, pens/pencils, paper clips, notepads, etc.
•
Promotional materials
•
Software
•
Stamps
•
Stationery (letterhead, client forms, etc.)
7.3.Selling Pet Supplies Who doesn't feel like their pet deserves a treat for being so good while "mommy" or "daddy" was away? We also sell pet products and supplies to our clients as a way to improve margin and revenue, and give better service to our clients. Some products we sell include the following: •
Beds P a g e | 35|
“PetResort” – Pet Hotel Startup Business Plan
•
Brushes and combs
•
Carriers
•
Collars and charms
•
Costumes
•
Jewelry and tiaras
•
Pet cologne
•
Pet food
•
Pet toothbrushes and toothpaste
•
Shampoos and detangles
•
Sweaters
•
Treats
•
Toys
Pet supplies are purchased from distributors, who sell them to our pet hotel at a price that is typically half of the retail store price. We also seek out local artisans or small businesses who can supply us with unique pet items at a low price. In order to reduce the upfront cost we try to get these businesses to sell through our hotel on consignment - this way we only pay them for what sells. Pet suppliers are recommended by pet industry experts, we will likely develop a relationship with a few that meet our needs the best. We'll save on shipping costs if we can find a supplier that is dose to us. We can also attend industry tradeshows to meet suppliers (who will have booths there), or ask our fellow pet business owners via an online message board community.
7.4.Setting our Fees What we will charge clients will be based on our local market and economy, what other pet hotel businesses are charging, and the quality and type of service that we offer. Please see below our fee schedule: Daycare Overnight care With own food After a stay of 7 days a daily discount of After a stay of 14 days a daily discount of
70 RON 100 RON 5 RON reduction 10 RON 15 RON P a g e | 36|
“PetResort” – Pet Hotel Startup Business Plan
Special food, medical care Obedience training
1 RON for each application 20 RON individual training
Price Reduction Schedule 30% 10% 10% 5%
For the 2nd guest dog of an owner For a time period of minimum of 8 days in the period of November to March outside holiday seasons For a time period of minimum of 30 days Early reservation (minimum 2 month before arrival and immediate money transfer)
7.5.Factors that Affect Our Fees To set our fees, we wanted to start by taking a look at what other pet hotels charge. But it's not as simple as making our fees the same too. While charging the same as other overnight or long-term pet care providers makes sense on the surface, it doesn't factor in how our business may be different. For example, we have a little more overhead, target a wealthier clientele, have more specialized services, and last but not least may have different profit goals than our competitors. We think the first place to start when determining our fees is our competition, but we also feel strongly that perception is reality sometimes a higher price (within reason) equals higher quality in the eyes of a customer.
7.6.Policies and Payment As much as working with pets for a living is its own reward, we still enjoy getting paid by our clients. At pet hotels, payment for service is required either in advance of the service, or at the time service is rendered. We don't want to get into billing clients after the fact, as this is time-consuming and doesn't always result in getting paid. It's best to be up front with our clients about all our business policies, including our payment policy.
Setting Policies We conduct an initial meeting with owner and pet to get the background information needed to properly care for and supervise the pet. Policies and points to cover include: •
Pick up and drop off procedure and times
•
What will take place in an emergency or natural disaster
•
What vaccinations are required for group play
•
What types of collars are acceptable P a g e | 37|
“PetResort” – Pet Hotel Startup Business Plan
•
Reasons a pet may be refused or terminated from care
•
How dogs will be disciplined
•
What holidays the hotel is closed
•
Late pick-up policy and fees
•
Communication policies (web cams, report cards, activity reporting)
•
Payment Options
•
At busy times of the year such as holidays, we encourage our clients to book early and reserve a spot. Reservations can be paid in full, or we can take a deposit.
7.7.Day-to-Day Operations This section deals with the day-to-day parts of running PetResort such as scheduling clients, hiring staff, and cleaning and maintaining our hotel.
7.7.1.Scheduling Although we may prefer the hands-on time with pets, part of our job will be time management. This starts by setting our pet hotel pick up and drop off hours. In general, our hours have to match the needs of our clients. We start with 8AM to 8PM for pick-up and drop-off and plan to improve if needed. Reception is not open on Sundays. We use software to keep track of the pets coming and going each day. This will also help keep us sane during our busiest times, when we and/ or our employees may be seeing many pets a day.
7.7.2.Hiring and Managing Staff Getting Ready to Hire When we will build our pet hotel, we will put a "now hiring" sign in the window displaying a number to contact us at while construction is taking place. This will hopefully save us some of the costs of help wanted advertising in the newspaper, which can be hundreds of lei per add. Positions to hire: •
Dog trainer
•
Dog supervisor
•
Janitor
We will get vets and groomers come in to our premises as contractors. P a g e | 38|
“PetResort” – Pet Hotel Startup Business Plan
We should also check backgrounds of potential employees, and driving records of anyone who will drive on our company's behalf.
Keeping Employees Happy In an industry that is infamous for turnover, we should do whatever you can to help our pet hotel retain employees. There's no single magic way to prevent turnover, but as smart owners and managers we should figure out ways to keep people happy to call our business their place of work. To begin, we will set a salary that is competitive with what others in the industry are offering. Obviously if we will be able to afford to pay higher than others, that will help us attract and retain employees. We will not overlook the value of perks, as well as health care, planned raises, paid vacations and Christmas bonuses to help us keep people around. In general, we believe employees are happiest when they: •
Know what is expected of them. We will create an employee manual that details our policies and procedures. We should also prepare a job description that lets each employee know what is required for the position. Review these descriptions at least annually. If responsibilities have changed, add or remove them (in writing) for our employees. Employees will also need to report to us on any incidents involving pets in their care, such as dog fights or injuries.
•
Have the tools to do their job. We will make sure that the equipment in our pet hotel works well, and is maintained on a regular basis. We will create a repair and maintenance manual that lists equipment and annual service schedules. Stock the supplies our staff will need on a daily basis, and monitor inventory levels.
•
Feel adequately trained to do their job. Paying for our staff to take outside training courses like pet first aid, or attend a conference on pet care issues will help them do their job better and with more confidence. We may also find that refreshing or adding new skills will help long-term employees find new motivation and enthusiasm for their work.
•
Feel respected. We will try to create an environment where staff members feel like they can speak to you openly. A weekly or monthly meeting can foster an environment of good communication.
•
Feel like their work in a day matters. Thank staff members when they do an exceptional job, or even just for regularly doing their best. It's also important to share positive and negative client feedback with our staff members, and ask staff for their input when we make business decisions that will affect them. Let staff know a bit about how the business is doing overall.
P a g e | 39|
“PetResort” – Pet Hotel Startup Business Plan
•
Feel supported by management and staff. Encourage our staff members to act like a team. Don't allow gossip at work, and if a conflict between staff members occurs, get all the information we can before deciding what needs to be done to resolve it.
•
Have fun at work. Celebrate staff birthdays or other events, bring in coffee and snacks for no reason. Take the time to learn staff spouses' or children's names, and share a bit about our own interests and hobbies with them.
7.7.3.Hygiene, Health and Safety Having safe hygiene, health and safety practices in place at our pet hotel is paramount. Here are some strategies to keep us, our staff and our workplace clean and safe.
Cleaning Routine A daily cleaning routine is a must. The cleaning products we will use should be appropriate for pet care businesses. Bedding, suites, crates, toys, play space need to be cleaned and disinfected before being used by another animal. Floors need to be finished with a material that is easy to clean, and then cleaned and disinfected often. We will use a special biological safety product called Ecocide S. The one piece of equipment we use daily is our cleaner machine, is what we use to disinfect the rooms every day and clean with. Having a cleaning schedule where tasks are checked off as they are completed will go a long way to making sure nothing gets missed. Daily and weekly duties should be included and divided fairly among staff members.
Caregiver Safety Our safety and the safety of our staff are just as important as the safety of the animals. Dog bites and scratches will always be a concern. If we feel after meeting any pet that they are too aggressive for us or our staff to handle, it's better for us to decline to take them in. Our safety has to be a top priority in this business. We will take down a complete pet information history before our staff will be exposed to any animal, and use gloves or muzzles as necessary. If a pet has sore spots or behavioral triggers that are likely to set him or her off, make sure that information gets communicated to everyone who will have contact with that pet. If a dog bite does occur, we will report it to local health or animal control authorities. There are some diseases that can be transmitted from animal to human. Of course fleas and ticks aren't picky who they munch on, and rabies is an obvious one. Mange and ringworm can be transmitted from pet to pet via our grooming equipment. A strict cleaning and disinfecting regimen will help prevent the transmission of illness and disease. P a g e | 40|
“PetResort” – Pet Hotel Startup Business Plan
And although it may seem like a minor matter, staff members with severe allergies to dust or pollen (or obviously, pet dander) may not be able to work comfortably with pets, in particular if the pet goes outside often.
Pet Health and First-Aid We and our staff will always be on the lookout for signs that a pet isn't well. This is easier the better we know a pet, but with more experience and training we will come to recognize the classic symptoms, such as lethargy, vomiting, and signs of dehydration. We will take courses in pet first aid that our staff could benefit from. If we determine that a pet in our care needs to see a vet, will need to contact the owner immediately, as well as provide transportation to the vet's office. If seeking vet care will leave our facility short staffed, it might be better to call a mobile vet instead. We get owners of pets placed in our care to sign what's called a vet release. This paper authorizes us to take their pet to the vet if we deem it medically necessary, and stipulates that the owner will be responsible for any fees incurred. The release also specifies an amount of emergency treatment we are authorized to request without further instruction from the owner.
Handling Client Complaints When you work with the public, complaints from clients are an inevitable part of doing business. It's never fun dealing with them, but if handled professionally, there is usually no long-term harm done. Handled unprofessionally, complaints can do serious damage to our business' reputation, and if they become public, can even put us out of business permanently. First and most importantly, no complaint should ever be ignored or not followed up on. It's well known that dissatisfied customers will tell far more people about their negative experiences than they talk about their positive ones. This is not the kind of word-of-mouth we want working for (or in this case, against) us. It's best that we as the owner be available personally to handle complaints. If we were not in the pet hotel when the incident occurred, we can follow up with a phone call later.
7.7.4.Pet Hotel Registration Form Today's Date: Client Information Owner First and Last Name: Address: City: P a g e | 41|
“PetResort” – Pet Hotel Startup Business Plan
Phone: Cell or alternate phone: Email: Emergency Contact Info (friend or family): Alternate person who may pick up pet from hotel: Special Password:
Pet Information Name: Age & Birth Date: Breed: Weight: Male or Female: Check one: Spayed
Neutered
Unaltered
Valid Tag or License #: Microchip or Tattoo Number: Pet Health Pet has received up-to-date immunizations "Please attach a photocopy of immunization record “ Yes No
If no, explain:
Name and phone number of vet: Clinic Name: Medical Conditions: Allergies: Has had flea/tick prevention:
Yes
Has had heartworm prevention: Yes
No No
Physical Limitations (sore back, hip dysplasia, etc.): P a g e | 42|
“PetResort” – Pet Hotel Startup Business Plan
Insured? __ Name of Company: Pet Background Previous training: Previous hotel stays (Y/N): If dog, is he/she crate-trained? Does pet enjoy grooming? __ Any sensitive spots? How long have you owned this pet? How does your pet generally react to other animals? Pet is afraid of: Pet's preferred reward: Favorite toys: Favorite games: Other notes: --------------------
Pet Behavioral Challenges (check all that apply): Biting, hissing or growling at people (explain reasons) Aggressiveness with other animals (explain reasons) Shyness Jumping on people Jumping over fences Chewing or digging Chasing small animals Escaping out an open door Excessive pulling on leash Pulling out of leash Running away Other P a g e | 43|
“PetResort” – Pet Hotel Startup Business Plan
Feeding Current feeding schedule: Feeding instructions (time, amount): Preferred brand:
Treats okay? Yes
No
Any brand of food/treat pet may not have? Guest Stay Dates Monday
All Day
am/pm
am/pm
Tuesday
All Day
am/pm
am/pm
Wednesday
All Day
am/pm
am/pm
Thursday
All Day
am/pm
am/pm
Friday
All Day
am/pm
am/pm
Saturday
All Day
am/pm
am/pm
Sunday
All Day
am/pm
am/pm
Start Date: End Date: Payment Cost per day: Pre-purchase
Cost per week Payment Received:
Future payment arrangements: I have read and understood the liability waiver and release form. Client signature:
Date
P a g e | 44|
“PetResort” – Pet Hotel Startup Business Plan
8. Financials Year 2010 •
3 owners / investors; 2 bring 210,000 RON each, 1 brings land evaluated at 210,000 RON, for a total of 630,000 RON
•
Capital is invested in buildings and landscaping which is scheduled for being functional in 2011
•
After 6 months we get a bank loan of 300,000 RON which will be used for continuing construction and ensuring cash flow for the first months of operation. Interest rate plus all bank charges amounts to 15.62% per annum. We also get a grace period of 6 months (until operation starts) during which we only pay interest. After that, we return principal and interest in 5 yearly installments, at the end of each period.
•
During this year we only consider marketing and interest expenses
•
We consider, according to current legislation, we have to pay “Poll tax” “Impozit forfetar”
•
Depreciation is considered linear and according to terms specified in Romanian legislation Inflation has not been taken into account We considered maximum occupancy rate cannot be more 80% Since in this industry it is not customary to have delayed payment terms for both clients and suppliers we consider costs and revenue paid and collected during the analyzed period
• • •
Year 2011 • • • • •
Operation start We assume an average of 450 occupied days per month (50% occupancy) Revenue considers 50% occupancy with an average price of 84 RON / day Costs are presented in Appendix 3 – Cost Model Overview 50,000 RON worth of dividends are paid
Year 2012 • •
Revenue is considered on an average of 20 dogs / day which equals an occupation rate of 67% and an average price of 84 RON / day In order to accommodate business growth the following items are purchased: P a g e | 45|
“PetResort” – Pet Hotel Startup Business Plan
• • • •
○ Toys, Accessories – 3,000 RON ○ PC – 1,000 RON ○ Tools – 2,000 RON A second car is leased, at the same cost as the first one Extra contractor work is needed which increases labor costs by 20% Other expenses increase also by 10% 150,000 RON in dividends are paid
Year 2013 • • • •
Revenue is considered on an average of 22 dogs / day which equals an occupation rate of 73% and an average price of 84 RON / day nu se mai investest in minic Extra contractor work is needed which increases labor costs by 10% Extra cash is invested into short term deposits 200,000 RON in dividends are paid
Years 2014 – 2015 • •
Some investments into maintenance and landscaping Following the same forecasts we had for 2013 the initial investment will be returned in a maximum of 3 years, at an IRR of 13%
NPV
2010
2011
2012
2013
2014
2015
2016
-630,000
50,000
150,000
200,000
200,000
200,000
200,000
IRR
1,513.98
12.88%
Cash Flow Direct cash flow
2010
2011
2012
2013
0
453,600
604,800
-63,300
-159,492
-219,072
0
-72,293
-96,390
665,280 -231,48 7 -106,02 9
Cash Flow from Operations
-63,300
221,815
289,338
327,764
Investments
420,000
0
0
0
Machinery / Equipment
-34,500
0
-6,000
0
0
0
0
0
Land & Buildings
-577,500
0
0
0
Intangible Assets
-2,000
0
0
0
-194,000
0
-6,000
0
300,000
0
0
0
Cash in from operations Cash out for operations - Fix Cash out for operations - Variable
Vehicles
Cash Flow from Investing Loan taken up / interest received
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Installment payment Interest Bank charges
0
-60,000
-60,000
-60,000
-23,430
-46,860
-37,488
-28,116
-1,000
-2,000
-2,000
0
-50,000
-150,000
275,570
-158,860
-249,488
-2,500 -200,00 0 -290,61 6
-2,200
-17,073
-19,056
-21,624
0
16,070
61,952
76,746
16,070
61,952
76,746
92,270
2011
2012
Dividends Cash Flow from Financing Taxes Liquid Assets Beginning of the Period Liquid Assets End of the Period
Profit and Loss 2010 Net inconme
0
Material costs-variable costs
0
Gross profit
0 1,000 0
Bank charges Utilities Selling - promo
453,600
2013
604,800
665,280
72,293
96,390
106,029
381,308
508,410
559,251
2,000
2,000
2,500
9,000
9,000
9,000
5,400
5,400
5,400
5,400
0
98,784
142,249
156,474 50,588
Salaries Other operating expenses
0
38,714
54,069
Depreciation / Amortization
11,667
35,000
37,000
37,000
Operating expenses- fix cost
18,067
188,898
249,718
260,962
Interests
23,430
46,860
37,488
28,116
7,595
7,595
8,354
10,025
31,025
54,455
45,842
38,141
-49,092
137,955
212,850
260,148
2,200
17,073
19,056
21,624
Net profit after Taxes
-51,292
120,882
193,794
238,524
EBITDA
-13,995
180,550
258,204
307,173
Extraordinary expenses Non operating expenses Net profit before taxes Taxes
Break Even Analysis We consider the Initial investment, Fixed Costs, and Variable costs for the first 5 years of operation, plus year zero (setup, construction). Initial Investment
720,000
2010
Fixed Expenses
159,492
2011
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Interest
Fixed Expenses for 6 years
Variable Expenses
219,072
2012
231,487
2013
231,487
2014
231,487
2015
24,430
2010
48,860
2011
39,488
2012
30,616
2013
21,244
2014
11,872 1,969,5 35
2015
13.4
Based on the above we compute a number of 27,897 days of occupancy, resulting in an average occupancy rate of 52% over the 5 years of operation.
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9. Future Developments Aside from continuing expanding and franchising the business in year 11, we also considered entering the pet hotel business for other kinds of pets, such as cats, birds, and even more exotic pets such as snakes, lizards, spiders. Another area we believe is worth exploring is a lateral mapping toward producing our own brand of pet food which would be fed to the pets during their stay and would also be sold to pet owners in our pet shop. The long stay parking service which we offer as a perk to our guests’ travelling owners may become increasingly popular and we may consider turning this into an associated revenue stream based on travelers who do not necessarily leave their pet in our care.
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Bibliography 1. 2. 3. 4.
Jennifer James- FabJob Guide To Become a Pet Hotel Owner www.bplans.com www.entreprisescanada.ca/gol/bsa/site.nsf/en/index.html canadabusiness.gc.ca/servlet/ContentServer?pagename=CBSC_ON/display&c =GuideFactSheet&cid=1081945275379&lang=en 5. www.ideideafaceri.ro 6. www.inns.ro 7. standard.money.ro/articol_20722/piata_de_pet_food_a_crescut_de_zece_ori_in _ultimii_sapte_ani.html 8. www.zf.ro/companii/nordic-petfood-vrea-sa-castige-jumatate-din-volumulpietei-de-hrana-pentru-animale-in-urmatorii-doi-ani-3344227 9. www.zf.ro/afaceri-de-la-zero/in-jurul-acestor-caini-si-pisici-graviteaza-ointreaga-industrie-3015265 10.www.revista-piata.ro/articole/analize--tendinte/animalele-romanilor-au-prinsgustul-specialitatilor.html 11.www.muzohotel.com 12.www.dogdaycare.com 13.www.paws-inn.com 14.www.bellotel-sudwalde.de 15.www.care-royal.de 16.www.hundehotel-satke.de 17.www.dresaj.ro 18.www.aldovet.lx.ro 19.zoopensiune.sunphoto.ro 20.www.k9studio.ro 21.www.pisicilearistocrate.ro 22.www.salvanim.ro 23.www.marcovet.ro 24.www.taras.ro/pensiune.php 25.www.pensiuneacanina.ro 26.www.canisresort.com 27.petshotel.petsmart.com/ 28.www.dacia.ro
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Appendix 1 – Car Lease
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Appendix B – Premises
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Appendix 3 – Cost Model Overview Initial investments Land Utilities Building offices Building dog houses Building pond Incorporation, Operation Permit Toys, Accessories PC Phone
RON 210,0 00 21,00 0 63,00 0 378,0 00 52,50 0
Ongoing costs (per month) RO Variabl RO Fixed N e N Water Electricity Gas Phone
2,000 6,000 2,000 1,000
Vet Internet Website Flyers
Tools (Gardening, etc)
5,000
Dog Trainer
A/C
8,000
Fridge + Electric stove
4,500
Washer & Drier Furniture
3,000 5,000
Dog Helper Janitor / Maintenance Car operational lease Fuel
Car lease down payment HR Website
6,964 0 0 10,00 0 38,89 8
Other Risk
Dog food Other Risk
500 Water Electrici 150 ty 0 Gas
680 400 Fuel Dog 0 Food 500 633 Risk
50 0
100 Phone 0 Vet 50 0 400 4,93 9 3,29 3 1,64 6
50
20 5
80 50 13
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Appendix 4 – Who we are Marketing Superstar – Madalina Lupica Vlad
Operations Superstar – Gabriel
P&L Superstar – Bogdan Chirila
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“PetResort” – Pet Hotel Startup Business Plan
Special Guest Finance Superstar – Simona Miklos
Special Guest Architectural Design Superstar – Anton “Toni” Budileanu
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