• Pet Boutique with Grooming Department Business Plans



    Since 2000 there has been a sharp increase in the number of pet boutiques with grooming. No wonder. Studies show that retail environments record up to 30% more in retail sales when services like grooming are also offered. The foot traffic of the grooming clients increases retail sales, and no pet care service is more frequency based than grooming. Solid grooming clients can be counted to come in every 4 to 12 weeks.

    Pet boutiques, like pet salons and shops, are typically in commercial locations located in upscale areas. They rarely qualify as a home-based business, and of course they are not a mobile operation although some may own a mobile and provide that extra service, including delivery of retail goods and bags of pet food (usually holistic brands).

    Pet boutiques can be anywhere from 500 to 1,000 sq. ft. but if they have grooming at least 300 sq. ft. should be allocated to a small grooming department. The build out of a grooming department is more expensive than the retail area. Never overlook the requirements for plumbing and electrical improvements to satisfy the demand of grooming equipment.

    Another major concern is dirt and dander. Pet boutique owners can overlook this factor easily and then realize with a busy grooming department they are dusting the retail twice a day! It's very important in your design to build the grooming department with floor to ceiling walls, and we prefer to add soundproofing the walls too. Don't leave doors open to the grooming but do add windows so that visitors can see into the public portions of the grooming department. Contain nose, dirt, dander and fur is most important, and it can be done. Look to ventilation design specific to the grooming department to exhaust heat and humidity too, and remember to contain the noise.

    We believe adding grooming can be very worthy. We have written dozens of business plans for boutiques with, and adding, grooming departments and the bottom line clearly showed the potential of added profit. Of course, there is the added management of the grooming department as well. You can actually acquire one of the real grooming boutique business plans and purchase software to write one easily at Grooming Business in a Box®.

    Pet boutique sell "specialty retail." You stock few items that are also sold at pet superstores or in the discount box stores like Wal-Mart. Why would you compete with them? We highly suggest you acquire upscale pet magazines such as Modern Dog and Bark Magazines and discover more about specialty retail. Les Poochs is another example of a fine line of upscale products with prices ranging from the $25 area to thousands. We suggest that you mix your high end retail with unique products affordable to middle class families that love pets too. On our Magazines recommendations you should also acquire pet retail trade magazines such as Pet Business, Modern Dog and Bark to learn more about retailing pet products. We also have lists of Suppliers in the PetGroomer.com Yellow Pages that can supply you with pet care products, toys and treats to resale. Also, don't overlook the possibility of a pet bakery. Some do very well indeed selling an average of $300 to $500 a day.

    The cash demand required to open a pet boutique with grooming is moderately demanding compared to mobile, home and small shop grooming businesses. Don't forget you can start small and grow too, and don't overlook selling your retail online as well.

    Many boutique and grooming owners have to borrow money through a business plan and bank loan to open a salon or shop, and today the absolute shoestring startup cost is $50,000, and more often and more comfortable would be $75,000 to $100,000. A pet boutique can be done in this same range, and they usually spend more on the start-up retail inventory and equip a smaller add-on grooming department.

    The greatest cost factor is "leasehold improvements." The new location is certain to need some plumbing, electrical, flooring enhancement, carpentry and signage work to prepare for a grooming operation. These "leasehold improvements" typically require half of the money borrowed. PetGroomer.com staff have written over 100 business plans in the last few years, so we speak from substantial experience. One of your main concerns for retail is your lighting and retail displays. The same stock displayed and lit better at a competitor can make a tremendous difference, and you need the right location to serve upscale pet owners attracted to your specialty store.

    It is always a bit of joy when the new business owner has family and friends that are legally able to do some of the leasehold improvements at a reduced cost. Sometimes the landlords will absorb a portion of the improvements, or reduce the rent to acknowledge the investment in their property. Here's our number one rule, NEVER sign a rent or lease contract no matter how much pressure you are under unless you have clearly, absolutely have a guarantee of cash investment required as stated by your business plan, especially if it is coming from a bank or investor. If you sign a lease or rent contract and don't get your financing, you are stuck paying the rent your contracted for and that is only one caution. As consultants specializing in the process of opening new, or expanding, pet care businesses, we suggest you consider our assistance described at Grooming Business in a Box®. Even a short consultation can save you thousands, and we have a long history of doing just that as most pet groomers are first time business owners, and we learn by experience, don't we?

    Everyone wants to know, what can we earn as a salon or shop owner. Well, how much do you want to earn? Except for the tiniest shop of just 200 to 300 square feet, the saying "The sky is the limit" may apply. Often mobile groomers and home groomers face a daily limit of the number of pets they serve. You can build a salon or shop to do 20, 30, 50, 75 or even 100 grooming appointments a day. We have clients in all those ranges. We started out as a small shop we grew to a 7 day a week operation grooming around 100 pets a day. The only other significant restriction is the "market area." Are there enough people and pets in your area to provide you with the number of pets you want to groom?

    Please realize that there is no "right or wrong" or rules that say you have to grow a large grooming salon or shop. Most boutiques do not have a large grooming department. It's your choice, and it should be tied to your financial expectations and financial projections. If you want to earn a personal income (your income or "your paycheck" from the business after operating expenses) of $50,000 or more a year (prior taxes) you are going to have to grow a moderate salon with more than one groomer, but the weight of your profit going to your personal income is going to come from the retail sales. Pet grooming departments with 1 groomer will make you some profit, but not much. The all important factor is they bring you foot traffic to boost retail sales.

    We do have consultation clients that enjoy $100,000 to $250,000 annual personal incomes (prior taxes) from popular boutiques with 2 to 3 groomers in businesses grossing $500,000 to $1,000,000 a year (what they ring up on the cash register).

    In the years 2000 to 2010 nearly every business plan we wrote for new grooming salons and shops included a specialty retail department (retail not generally found in corporate pet stores or event Mom and Pop pet stores) and sometimes a bakery, and about 20% of the time they also offered self-service pet wash tubs in addition to full-service grooming. Having multiple sources of revenue is very important to ensure that your business income is adequate to pay for leased space, bank loans and interest and other operating expenses. What this means is that YOU MUST LEARN HOW TO PROJECT INCOME AND OPERATING EXPENSES BEFORE YOU OPEN A GROOMING BUSINESS, OR BUY AN EXISTING ONE. Our book From Problems to Profits offers some help in creating an Income Projection, however the most professional financial software for groomers is included in Grooming Business in a Box®.

    The Really Big Factor

    Are you a grooming business owner that grooms and hires staff to run the front counter and boutique sales?

    Are you a boutique business owner that manages the front counter and retail sales, and you don't groom at all but hire groomers. Wow is there a tremendous difference in costs of operation and profitability factors! When a new customer calls us for consultation on a boutique our first question is, "Who is doing the grooming?" If they have to hire a groomer, and it's a good idea, their income projection must show that most of the grooming sales income goes out the door to operating expenses. Pet grooming wages can easily run 50% to 60% plus the cost of payroll taxes, worker's compensation and benefits. Therefore the reality is that the non-grooming owner is in many ways using the grooming department facility to attract a greater clientele to increase retail sales, and the retail sales pay the expected salary to the owner. As you can imagine we have taken up this subject in a 4 hour seminar, so here you are getting our opinion in the smallest of nutshells. Working with Sales Forecasts and Income Projections in Grooming Business in a Box you will learn where our wisdom came from, the numbers, and not our opinion. You need to do the same. In the end, if you asked us if we owned a pet boutique would we have grooming, our answer would be absolutely yes. It's the same reasoning that leads the pet superstores today to have grooming and even boarding in nearly all of their new locations.

    Learn Management

    If you are looking to your business to provide for your retirement, you need to build the largest business possible with a clientele that comes in often, and site it in a commercial location with a good, long lease. Make sure you have a very professional sign, and that your operation is conducive to selling, meaning that the buyer knows they can come in and take over and run the business in the same way as you. The more "systematized" you are, with a well-documented business history, the more likely you can encourage a higher appraised value, and more buyer confidence.

    It's never to early to extend your grooming excellence with pet grooming business management excellence. There are two important "business books" for salon owners. Read both of the two best grooming management books, From Problems to Profits and The Art and Business of Pet Grooming. They should be in every pet groomer's library.

    If you meet your objectives, and your objectives are very clear and appropriate, you enjoy success regardless of operating your business in a salon, shop, home or mobile van. Have you written down your personal and business objectives yet? Do you have a business plan[/URL]? If not, there are resources to assist you in this site. Please use them. I am reminded of the saying, "If we fail to plan, we plan to fail." You must discover and record your clear objectives in order to properly choose between a home, van or commercial business, and not endure the limitations of lifestyle preferences or money limitations where they exist.

    Do your homework for your business!

    It's also important that you create a business plan for a new business. You can be sure one will be required if you seek a business loan or investor. It's no small task but perhaps the most important task to protect your investment in your business.



    Chart generated by Pet Grooming Business Plan Helper & Sampler, a Grooming Business in a Box® product.

    Copyright 2007 Find A Groomer Inc. All rights reserved


    You need to project your business sales income for 3 to 5 years in advance from the day you open for business (see graph above). Then you need to project the cost of goods sold and operating expenses and deduct them from your projected sales income thereby giving you an estimate of what personal income you can expect to earn from your business (see graph below). Going into business in the dark without knowing what you can expect to earn in sales and personal income is an unacceptable risks to banks or investors, and for good reason.



    Chart generated by Pet Grooming Business Plan Helper & Sampler, a Grooming Business in a Box® product.

    Copyright 2007 Find A Groomer Inc. All rights reserved


    How much do you need to invest? That's another question that must be answered with financial planning. Some boutiques are simple to build out while others plan to be large and require substantial leasehold improvements.

    The graph below shows the start-up funding required for a high end boutique with grooming in commercial building requiring little renovation. The owner is also the groomer. She starts small but plans to grow to employ 2 to 4 more employees. The owner projects requirements as approximately $130,000 in "start-up assets" and $8,000 for start-up expenses. Every business owner learns basic financial terms and you definitely need to know the difference between an "asset" and "expense." In accounting and tax reporting your assets and expenses are handled quite differently. Suffice to say that assets for a salon is major equipment like high-end grooming tables, tubs and dryers. In this example there is also inventory and furniture. If you use the services of plumbers, electricians and other contractors they might be considered leasehold asset improvements. You must get asset vs. expense determinations from a reliable certified public accountant to avoid problems with tax agencies. Certainly the start-up expenses are easier to understand. They have a short lifetime and include grooming supplies, small tools and equipment, advertising, stationery, licenses, fees to name just a few.

    Refer to the chart below once more. We know that the groomer needed $138,000 to cover the purchases of assets and expenses, and some of that asset amount may be cash reserved because you run a new a business at a loss for several months until the clientele and demand increases. The chart tells us that the groomer plans to seek a loan (light yellow) of $68,000 and her investment of her own money (light blue) will be $70,000.

    Remember if you need a loan or investor they are going to want to know exactly how much of an investment you need and how much you are personally putting up of your own money. Don't proceed without knowing the numbers, and have them well-documented. You are certain to be asked for that documentation. If you don't have it you will be perceived as being naive about the conduct required to start-up a business. It's okay to be naive now, but start learning more today.


    Chart generated by Pet Grooming Business Plan Helper & Sampler, a Grooming Business in a Box® product.

    Copyright 2007 Find A Groomer Inc. All rights reserved


    There's another very common question someone is likely to ask you. Again, don't venture into business seeking loans or investors without knowing your projected "breakeven point." Below you will find the breakeven table for the groomer opening the boutique described above.

    Break-even Analysis (Pet Care Services Only)
    Monthly Units of Services to Break-even293
    Monthly Gross Sales of Services to Break-even$10,037
    Assumptions
    Estimated Monthly Fixed Cost$10,037
    Estimated Per Unit Variable Cost$0.00
    Year 1 Sales of Services$60,360
    Year 1 Units of Services1,764
    Average Per Unit of Services Revenue$34.22

    Table (above) generated by Pet Grooming Business Plan Helper & Sampler, a Grooming Business in a Box® product.

    Copyright 2007 Find A Groomer Inc. All rights reserved


    Do you understand the table information? It's not too hard to figure it out once you know your projected average service fee for grooming services you expect in your business, and what your fixed costs are. Fixed costs can include interest payments on your loans to start-up the business, supplies, rent and utilities, etc. In the example above the new business owner knows her business requires $4,222 a month to meet its fixed costs of operation. Because she knew her average grooming fee would be $32.55 it was easy to divide that number into the fixed costs of $4,222. The result is 130; the groomer must sell 130 grooming services a month to meet the required bills, and that doesn't include any personal income for her (unless she included a small base salary in the $4,222 amount). You will impress others if you can share your break-even point, and think about this question. Isn't it easy to count the number of pets you groom or serve as you work through a month? Sure. Knowing that you must achieve 130 units to meet break-even is an easy way to track your progress at any time during the month. You will be better prepared should you not meet your goal, or to celebrate when you exceed your goal and start boosting your profit.

    Keep in mind the table above is using pet care services only. In other words, no retail sales were accounted for as helping to cover the fixed costs. The table could be redone in another perspective using only retail sales to cover the fixed costs. We used the table as it is above because the business was owned by a groomer also doing the grooming, and the retail area was second in priority. We suggest boutique owners to create two break-even analyses, one based on retail sales only and one on pet grooming services only. As we have stated before there is a great divide in boutiques with grooming. There are owners that never groom, and owners that groom full-time. The owner that grooms full-time is more likely to find the break-even analysis based on services more comfortable and easy to assimilate. The opposite is true for the owner not grooming, and again we state this advisory, owners that do not groom should never count on large profit from a small grooming department. Therefore, they do best keeping their focus on reaching and exceeding break-even in terms of sales of retail units.

    Talk with Other Grooming Business Owners

    We suggest you come to the GroomerTALK Message Board and talk with grooming business owners. You are also most welcome to register on the Message Board and start some discussions, ask for help and make friends with boutique owners, groomers and others. Better yet, how about sharing your experiences with grooming in order to help others. That's what PetGroomer.com is about, opening up lines of communication between groomers that is still so sorely missing from our industry.