• Shop, Salon & Spa Business Plans



    Let's start by saying that there is little difference in the term "shop" versus "salon." Most consumers sense the use of the term "salon" as being more upscale, and not necessarily a larger business than a shop. "Shop" is simply casual. So for the purpose of discussion here unless otherwise noted, we mean the same thing whether we use the term "shop" or "salon." If your interest is a pet spa this is your section too. The term "pet spa" has been around for some time but its use is on the increase in upscale areas. These businesses promote specialty services from hydrotherapy to "blueberry facials."

    Salons and shops as we use the term are in "commercial locations." They do not 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.

    Salons and shops typically have 1 or more employees. Now that is perhaps the most common delineation between home and mobile groomers and owners of salons and shops. There are some home and mobile operations with employees, but the percentage of employers is dramatically higher among salon and shop owners. If you don't want employees, you won't have a typical salon or shop, but there are some exceptions of very small one person shops usually in 200 to 300 square foot "nooks."

    Most commercial salons and shops are in a leased space. Some pet groomers acquire the funds enabling them to buy their business building which can be a terrific financial move when done correctly and eliminate the rent expense. Some commercial salons and shops are leased from a large kennel or pet store operation equipped with grooming departments.

    The cash demand required to open a grooming business is typically the greatest for commercial salons and shops. If you are interested in opening a salon or shop be sure to read our Startup Cost Information Main Menu and the Salon Design Information Main Menu. Look for more design information in this Resources section in 2011 too. Keep in mind that even the largest pet grooming salon was once a small one. Most groomers 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. 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 hundreds of business plans in the last 20 years, so we speak from substantial experience.



    Photo Courtesy of MDC Romani/Clipper Vac

    Work Styling Stations © All rights reserved


    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. 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 to large salon. We do have consultation clients that enjoy $100,000 to $250,000 annual personal incomes (prior taxes) from very large salons earning business income of $500,000 to $900,000 a year (what they ring up on the cash register). These figures are grooming services only and could be higher if you factor in additional sources of revenue such as retail goods.

    Let us state here an important point. In the last 8 years nearly half of all business plans 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®.

    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 grooming business owner 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? 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 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 salons and shops are simple to build out while others plan to be large and add a retail pet products department and perhaps other revenue services.

    The graph below shows the start-up funding required for a commercial building requiring little renovation. The groomer starts small but plans to grow to employ several groomers. It also has a modest retail department. The owner projects requirements as $46,000 in "start-up assets" and $4,000 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 $50,000 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 $32,000 and her investment of her own money (light blue) will be $18,000.
    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 a salon business above.

    Break-even Analysis (Pet Care Services Only)
    Monthly Units of Services to Break-even130
    Monthly Gross Sales of Services to Break-even$4,222
    Assumptions
    Estimated Monthly Fixed Cost$4,222
    Estimated Per Unit Variable Cost$0.00
    Year 1 Sales of Services$45,380
    Year 1 Units of Services1,394
    Average Per Unit of Services Revenue$32.55

    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.

    There's no simpler way to write a professional grooming salon or shop business plan suitable to present to banks than with Pet Grooming Business Plan Helper & Sampler. In fact, one of the sample plans is a complete one-person to staffed grooming business achieved by one of our clients. No one else has ever released similar information and tools customized to the needs of pet groomers. Take a look at Grooming Business in a Box®.

    Talk with Other Grooming Business Owners

    We suggest you come to the GroomerTALK Message Board and search the term "salon grooming" and read previous discussions of salon and shop grooming related topics. You are also most welcome to register on the Message Board and start some discussions, ask for help and make friends with salon 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.

    Salons & Shops as Part of a Retirement Plan

    Unlike most people in the grooming industry we have substantial experience in selling medium to large grooming businesses whose selling price can make a substantial difference in the retirement of their owners. Salon and shop owners need to realize that unless they pay into self-employed "pension plans" or similar investments they will look to the sale of their grooming business to contribute to a more comfortable retirement (or career change). It's take years of planning before they sell to make the best returns.

    If you plan to retire someday, you will want to do so comfortably. Pet grooming business owners can create a business that provides them with such a retirement. The stereotypical image of the average pet grooming business owner is unfortunately not adorned with the vision of selling a business that provides them with such a retirement. Today, more pet grooming business owners are at least participating in some of the few retirement programs offered by leading trade associations, or those of their individual choice.

    The size of your client base is directly proportional to the value of your business. So, the more your business is worth, the more you will receive for your retirement. Use management information to build the net worth of your business. The leading source of information to grow the net worth of a pet grooming business today is From Problems to Profits. However, don't overlook other business management publications and higher education sources, and professional working relationships with a bookkeeper, business attorney, accountant and financial planner. Every home, mobile or commercial salon needs management and professional advisors. Be sure to check out the resources at your local SBA or SBDC.

    What you plan NOW affects you many years from now. Just saying to yourself you will think about it later is not wise. Strategize your career in pet grooming with a map of sorts. Create a business plan, because to create one you must identify short-term objectives, and those five, ten and twenty years ahead. You are not locked in and prevented from making changes, but you will surely make less mistakes. Today's industry has far more resources to assist you than ever before, but you must take the time to learn and strategize. Be realistic and grow in stages. You will find new inspiration each time you achieve a goal, and then you go after the next one. Be more than a pet groomer, be a business person that grooms, and you will have a more profitable and satisfying career in pet grooming whether you operate in the home, in a van or a commercial location.