Is this a viable business?

[Aebaa]

Hi All.

My business idea is an indoor dog play park/groomers/café and shop/swimming pool/party room and out door secure yard. So basically anything dog related will be under one roof.

The start up costs we have estimated around £50000
The premises rent is £40000 a year for 1228sqm area so is big enough to stay.
Business rates are around £15000 a year
Have no idea on cost of utilities yet.
Staff wages??? 1 groomer, 2 in café, one on reception, 2 in play park to start.

I have an appointment with a business advisor in a couple of weeks but wanted others opinion first.

thanks in advance.

 

[MikeJ]

£40k per year in rent
Let's assume each of your 6 staff costs £25k, including NI, pensions, etc. Another £150k.
£15k per year in rates.
Assume the start up costs are written off over 10 years, at 0%. Another £5k per year then.
That's £210k per year, before you've done anything about insurance, utilities, etc.

Do you think you'll be able to bring in £10,500 per week, every week? At £10 per hour, that's 1000 dogs per week coming in for an hour. If you're open 40 hours per week, that means you've an average of 26 dogs in at any one time.

What do you think?

 

[Mr D]

2 staff in play park to cope with 26 dogs?

How many dogs can one member of staff work with / keep an eye on at any one time?

And is there sufficient demand within reasonable travel distance to cover your costs?

 

[Chawton]

Mike J makes some excellent points. I'd also add to that: 'maintenance'. The more bells and whistles/facilities you have, the more stuff will break down and need repairing. A swimming pool, well I dread to think what that might cost to keep in good working order. Also, if your premises are 1200 square metres you will have a 13,000 square foot roof over your head. I've got one of those with a five a side business that I built. They leak. You're on the hook for that, not the landlord.

More fundamentally though I think I'd question the attraction of an 'indoor' venue when it comes to dogs. If you do need 30-40 of them indoors per hour to make any profit, that sounds like hell on earth. They're not all going to behave like they're at Crufts-they'll be going after each other and making an unconscionable noise. I'm not a dog owner or a doggy person, but that would put me off from the get-go. You'll also be abandoned in the summer/fairer months because then it's actually a pleasure to be outdoors with your dog.

If you're absolutely wedded to the idea, I'd recommend renting some land/outdoor space (as geographically suitable as possible) and maybe spending 10-20k fitting out a modular building with some facilities and plonking that onto it. A couple of 40ft shipping containers might do it. That way you'd even have the opportunity to mitigate by flogging the building again afterwards if it didn't work out.

 

[Aebaa]

Thanks for the replies..
Mr D it won't be a creche it's more of a stay and play park where the owners have full responsibility for their own dogs.

MikeJ: That costing would just be the use of the play park. There will be separate pricing for the all the other services which will be inline with other separate facilities within the area. There are no other places that offer all these in one place within a 250 mile radius to the unit.

 

[Mr D]

Thanks for the replies..
Mr D it won't be a creche it's more of a stay and play park where the owners have full responsibility for their own dogs.

MikeJ: That costing would just be the use of the play park. There will be separate pricing for the all the other services which will be inline with other separate facilities within the area. There are no other places that offer all these in one place within a 250 mile radius to the unit.

We have a stay and play park near me. I take my dog.
We stay and play on the grass and its free. Lots more space than your building.
What is the draw you have for dog owners?

Something so rare there isn't anything else like it within 250 mile radius - that's a negative to me.

 

[Mark T Jones]

Start converting your annual / total estimated into monthly figures and start building a cash flow forecast.

The big question is less can it be profitable, more when will it run out of cash.

 

[Gordon - Commercial Finance]

Mr D it won't be a creche it's more of a stay and play park where the owners have full responsibility for their own dogs.

Why would people pay to come there rather than in literally any other place which is totally free?
The money these days seems to be in dog daycare. I pay £25 per day for someone else to take my dog for a full day. I can watch her on a webcam on my phone, and she comes back absolutely knackered.
I use this service at the moment because my wife is 8 months pregnant and I wanted to give her one less thing to deal with at home, but loads of people who work every day will pay that to put there dog in while they're at work. The place I go is on the outskirts of Glasgow, and they have around 20 or 30 dogs in there at any one time. They have 3 full time staff in to look after the dogs, plus a driver to do pickups and drop offs, and a manager. Can be very lucrative but also a very cash-intensive business.
Seems like your proposal is absolutely not viable, but with that kind of space available to you, why not consider modifying it a bit to cover daycare?

 

[Mr D]

Agreed Gordon - if had to leave the dog alone for the day I'd want him to be in some sort of daycare rather than pining at home.
Something other than home, and many kennels will take overnight but not just for a few hours daytime.

 

[Toby Willows]

There is a market for secure dog play areas, especially for puppies. Buy yourself three or four acres of grazing land (should be in good condition if recently grazed and fenced off already) for circa £20k, pay another £10k or so to partion it off into one acre plots and dog proof it, then rent those out by the hour. One member of staff max is all that’s needed and you can also flog dog treats and coffees etc for additional income.

Worst case scenario is it fails but you’ve still got £20k of land to sell on rather than commitments of £100,000’s over the coming years on a commercial unit.

 

[The Byre]

The big question is less can it be profitable, more when will it run out of cash.

This enterprise is such an obvious turkey that I hope the OP drops the whole idea before he/she commits one penny to such a doomed idea. @MikeJ put down the obvious back-of-envelope calculation and as he puts it in his signature "I advise you to listen to his advice!"

@Toby Willows has made a sensible suggestion.

 

[KAC]

Do you have any dog training qualifications?

 

[APW]

First thing to check is what restrictions the council will have on licensing. My local council state a maximum of 4 dogs per staff member for day care. Thats a massive hurdle and will push prices up.

The second main issue is finding a unit thats suitable as a lot of units will refuse due to potential noise complaints.

A fully qualified dog groomer will start at £20K a year with an assistant at 14K.

Crunch those numbers then see how many dogs you will need per day.

Edit:

If you are planning to have owners look after their own dog you are still obligated to provide staff trained in dog handling and dog first aid. You will also need a watertight insurance policy as you will be responsible for any injuries and dog attacks.

Check what restrictions your council have in place.

 

[MikeJ]

If you want a viable dog based business, take a look at these ...

https://www.facebook.com/pg/EddiesDIYDogwash/services/?ref=page_internal

http://dogzonestirling.webs.com/services-rates

Set that up, with a cafe on the side if you want. Have people around that will do the washing if people are willing to pay extra, but if you don't do that then your overheads are minimal - you're pretty much only paying money for water, etc, when people wash a dog.

 

[Aebaa]

Thanks for taking the time to reply everyone.

There are 3 of these in Wales the first opened in 2014 and you can buy a franchise. With first year turnover of 240k up to 400k in third year.

The one in the UK had 200 dogs in the first 3 weeks of opening become a member at £30 a month. There are cafes popping up all over that have resident dogs that you go and pet for a fee. Statistics show that UK spend over 10 billion a year on pets so I'll do some more research and more local market research as my first lot was a relatively small number. Perhaps need to scale back till I've made the money to expand.

 

[Mr D]

If you want a viable dog based business, take a look at these ...

https://www.facebook.com/pg/EddiesDIYDogwash/services/?ref=page_internal

http://dogzonestirling.webs.com/services-rates

Set that up, with a cafe on the side if you want. Have people around that will do the washing if people are willing to pay extra, but if you don't do that then your overheads are minimal - you're pretty much only paying money for water, etc, when people wash a dog.

Pampering pets works - every couple of months my baby gets his nails done, his hair trimmed, a bath and a ribbon attached to his collar. For a mere £34.
The place we go to can groom up to 4 dogs at a time on the tables plus a couple more being bathed in the back. Labour intensive of course and there is some upselling of additional services.
The woman who started the business did it from an old van as a mobile service to start with, then a small shop, then a bigger shop, now two shops and about 12 staff. In less than 10 years and without debt.

 

[Mr D]

Thanks for taking the time to reply everyone.

There are 3 of these in Wales the first opened in 2014 and you can buy a franchise. With first year turnover of 240k up to 400k in third year.

The one in the UK had 200 dogs in the first 3 weeks of opening become a member at £30 a month. There are cafes popping up all over that have resident dogs that you go and pet for a fee. Statistics show that UK spend over 10 billion a year on pets so I'll do some more research and more local market research as my first lot was a relatively small number. Perhaps need to scale back till I've made the money to expand.

Just remember turnover is nothing, profit is everything. There are big companies with much higher turnover and no profits. And small companies with low turnover but a high percentage of that being profit.

 

[Aebaa]

Mr D they are reporting that the net is 55k in first year increasing to 150k in third. Obviously I need to take into account things like differences in the area, population ect.

Thanks again you've all made me think about different options and variables.