Boarding facilities, pet daycares, veterinarian clinics and retail pet stores are prime candidates for adding a pet grooming. The concept is excellent for one significant reason. Most pet grooming clients can be relied upon to return every 4 to 12 weeks, and about 30% of them will spend money in other departments. No wonder retail pet superstores add pet grooming to most new locations, and some now include boarding and daycare in upscale areas.
At one time the veterinarian considering an ancillary service such as pet grooming did so with the intention to build a larger business, and to provide more convenient services to clients, and to increase gross revenue. Today, the latter has become most important. Ancillary services are key to veterinary clinics in an effort to boost revenue to pay for expensive medical equipment.
Many veterinary businesses find it mandatory to add many ancillary services because of their low profit margin on veterinary services in a state-of-the-art equipped clinic. Pet grooming is a natural service to expand the revenue base of a medical pet care operation. The best aspect of grooming is the return frequency. Most pet owners that use grooming services regularly visit their groomer several times a year more often than visiting their veterinarian.
We have worked with several veterinary clinics implementing some of the sources of pet grooming operations information below, and they surpassed their projections. Today, we hear from some pet grooming business owners that the majority of veterinarian clinics have added pet grooming in their respective areas. That trend is likely to continue, and it will offer more employment for pet groomers. However, pet grooming business owners may lose business if they do not continue to add to their more professional environment which apparently attracts them to move to grooming operations in veterinarian clinics.
For the clinic manager, or managing partners of a veterinary practice, we strongly suggest the sources of information below that have been used to establish pet grooming departments, or to boost the performance of an existing grooming department of veterinary grooming departments. Today we have developed the premium product, it’s Grooming Business in a Box®. Most important you start by using the Pet Grooming Business Plan Helper & Sampler.
Using the extensive workbook and CD-ROM software you can create a truly professional set of financials to project the financial performance of the add-on grooming department. Many have used the software to create a written business plan for the grooming department and presented it to their bank to finance the project; it’s that good. Better yet, the sampler section includes a copy of a real add-on grooming department plan. Kennels, veterinarians, daycares and retail pet stores considering the addition or improvement of a grooming department will find no other product so advanced and easy to use in order to achieve their objectives.
Groom the Financial Numbers for a Grooming Department Accurately
How much can you earn from adding a grooming department? Everyone wants to know that. Well, how much do you want to earn? Except for the tiniest department 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 starter department and expand to do 20, 30, even 50 or more grooming appointments a day if your market area has a population adequate to support the demand.
We started out as a small shop we grew to a 7 day-a-week operation grooming around 75 pets a day, and you know what? Several veterinarians opened new clinics next to our location. It’s the repeat appointment frequency of pet grooming clients that makes them very special. Never believe that large businesses offer less quality. The old adage quality versus quantity is a myth. There are plenty of small grooming businesses as little as one owner that don’t necessarily offer better grooming or attention to pets. In fact, it is harder for the one person business distracted by carrying so many hats they cannot provide the benefit of full-time receptionists providing quality control checks and client relations throughout the day. Many use cage-drying whereas many large business hand dry every pet without exception. We were very large, but every pet got more hands-on grooming time than many businesses decrying us for being large saying we were quantity-oriented. They made no sense and the facts of how much time was spent hands-on with no cage drying proved it along with full-time multiple client relations staff. We even had walkers provide pets with a break while awaiting the return of owners.
We encourage you to project conservatively and plan to grow your department to the level of 8 to 12 groomings a day at the end of your first year offering grooming services. You will need 1 to 2 employees and some teams of 2 can do a bit more.
Please realize that there is no “right or wrong” or rules that say you have to grow a large grooming department. The largest grooming departments we have seen are in very large kennels, however, there are veterinarian clinics that have expanded building a separate pet salon next door to their clinic even adding daycare and boarding. It’s your choice, and it should be tied to your financial expectations and financial projections. Let’s not forget that one of the most important attributes of having a grooming department is the increased foot traffic it will bring to your sources of revenue including medical care, retail and other non-grooming pet services such as boarding and daycare.
Managing a pet grooming operation is not similar to pet boarding, veterinary medical care, retail or any other pet service. You probably knew that fact, but we want to emphasize it. Finding and keeping pet groomers can be a challenge if you don’t know how to manage them and keep their interest. Pet groomers are artists unlike the staff in other pet service and retail operations. You can learn some aspects of managing a grooming operation with our book, From Problems to Profits and other Grooming Business in a Box® workbooks all based on the original book.
The Really Big Factor
Pet grooming is labor intensive, and labor means payroll. Many groomers will desire at least 50% of the grooming fees your business charges, or more. Therefore a small grooming department is NOT a big net operating income source in itself for the owners. In such cases the grooming department should be seen as a boost to your other departments as revenue sources, and project the image of your business as being a one-stop source for pet care needs and retail. If you can grow the grooming department to require 3 to 5 groomers you should certainly expect under cost-efficient management that the department does more than complete your “pet care center” image but also add some profit to the bottom line for the owners. You need to clearly understand what has been said in this paragraph.
Many businesses adding grooming departments are quite satisfied with a 1 to 2 person grooming department enjoying the added and regular cash flow and being able to tell their clients that grooming services are available. Don’t open a department without listing in order of priority what you expect from its addition. If it is simply more net operating income, you are going to have to grow a large department.
Do your homework for your business! Are you ready to do a business plan for your new department? You can be sure one will be required if you seek a business loan or investor for the project. It’s no small task but perhaps the most important task to protect your investment in your business. Below you will find a sales forecast for a grooming department looking to eventually employ 2 groomers and 2 bathers.
Chart generated by Pet Grooming Business Plan Helper & Sampler, a Grooming Business in a Box® product.
Copyright 2007-2015 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.
How much do you need to invest? That’s another question that must be answered with financial planning. Some grooming departments are simple to build out while others plan to be large and require substantial leasehold improvements.
Chart generated by Pet Grooming Business Plan Helper & Sampler, a Grooming Business in a Box® product.
Copyright 2007-2015 Find A Groomer Inc. All rights reserved
The graph agove shows the start-up funding required for a standard grooming department being added to a vet clinic (similar costs for a boarding facility or retail pet store) in commercial building requiring little renovation. The owner projects requirements as approximately $24,000 in “start-up assets” and $2,500 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 owner needed $26,500 to cover the purchases of assets and expenses. The chart tells us that the owner doesn’t plan to seek any amount through loans (light yellow) and instead plans to make a personal investment (light blue) in the amount of $26,500.
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 2007-2015 Find A Groomer Inc. All rights reserved
There’s another very common question someone is likely to ask you if you seek a loan. 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 owner adding a grooming department.
Break-even Analysis (Pet Care Services Only)
Monthly Units of Services to Break-even: 108
Monthly Gross Sales of Services to Break-even: $3,725
Assumptions
Estimated Monthly Fixed Cost: $3,725
Estimated Per Unit Variable Cost: $0.00
Year 1 Sales of Services: $47,160
Year 1 Units of Services: 1,368
Average Per Unit of Services Revenue: $34.47
Figures (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 department owner knows the business requires $3,725 a month to meet its fixed costs of operation. Because the average grooming is projected at $32.55 it was easy to divide that number into the fixed costs of $3,725. The result is 108; the department must sell 108 grooming services a month to meet the required bills. You will impress others if you can share your department’s 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 108 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 department 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 talk with grooming business owners and those operating departments. You are also most welcome to register on the Message Board and start some discussions, ask for help and make friends with 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. ♦
