PET CARE IN THE USA
Document Type:Business Plan
The business will adhere to the legal articles dealing with pets including the Article 3-D Sales of Dogs and Cats of the New York State. That is, the business will be started in New York then rolled to the rest of the country. Financially, the start-up funding for the pet business will be US$300,000, and it will cater for fixed and working capital. Again, leasing of assets will significantly reduce the start-up capital needed to start the business. The shareholders will be protected by its limited liability nature since the business will be informed a company. 3 The Business Opportunity 3 1. 1 Rationale Behind the Business Idea 3 1. 2 Target Market, Customer, and Accessibility 4 1. 3 Business Model 5 1. 4 Structure of the Report 5 Chapter 2: Business Opportunity 6 2. 1 Defining the Research Problem 10 3.
2 Design of the Market Research 11 3. 3 Information Types and Sources that are required 11 3. 4 Proposed Methods of Data Analysis 12 3. 5 Formulation of Findings 12 3. 2 Project Funding 28 3. 3 Cash Flow Projections 28 3. 4 Profit and Loss Projections 28 3. 5 Breakeven Analysis 29 3. 6 Risk Evaluation 30 3. 1 Product and Service Idea 45 5. 2 Legal Issues 46 5. 3 Financial Requirements 46 5. 4 Risk Issues 47 5. 5 Marketing Matters 47 5. Firstly, it helps the students develop realistic projections and plans. That is, the project connects the student with the real world of writing a business proposal. It enables the students to be realistic about how to cause a break even in the business. Writing the proposal helps the students to research the risks and challenges and develop suitable mitigation measures or determine the viability of the business (Stenger, 2016). Secondly, the knowledge of developing business proposal can help the student secure funding.
That is, it helps everyone directly linked to the business, from the low-level employees to the board members, to understand the business. It enables the stakeholders to learn the daily running of the business (Stenger, 2016). Furthermore, it enables the entrepreneur to learn how and where to get started in case of a new business idea. As a business course, the Business Development Proposal helps the student with everything including identification of customer base, development of an effective and efficient marketing strategy; and turning a business idea into a successful company. 2 Selection of a Scenario There are five Business Development Proposal scenarios: a new company start-up; exiting company owner; current employing organization; a commercial entity; and a not-for-profit organization. Consequently, it is vital to start a pet care business in the United States of America.
Pet care is a promising industry in the United States. More than a half of the United States’ households own at least a pet. It translates to about 80 million households have at least a lizard, fish, bird, horse, cat or dog among other in the United States (Franchise Help Holdings, 2018). The pets need to be kept clean, food, and accommodation hence the creation of diverse demands. The general group can be categorized into four. Firstly, is the health-conscious customers who care about their health and that of pets. They often look for natural ingredients that do not have significant filler materials. Quality is critical to them hence they want best accessories, health supplements, treats, shampoo, and food for their pets. Secondly, pet-specific customers are those that look for unique store catering for their pets.
The first physical location will be New York with the intention of creating one at each of the city-states. The store will have attractive animal species such as piranha, kinkajous, sailfin dragons, and store mascot to attract customers (Mohan-Gibbons et al. The customers will access the services either through online or brick-and-mortar stores. 3 Business Model The pet care store will offer some goods and services. These will include pet sitting and walking; dog training; pet grooming; pet treats and foods; and upscale pet products such as toys and clothes. The pet industry in the country has managed to keep the owners of the pets happy. For instance, some of the owners of the dogs think it wise to buy their pets Juicy Couture sweater even though the dogs might not feel the difference.
The study also ascertained that high incomes homes account for 60 percent of the total amount spent on dogs in the United States with the rest coming from the rest of the economic levels. The pet industry in the United States has already established hence many business opportunities. Some of the leading corporations in the industry include Petco and Petsmart which are the most recognized businesses (Franchise Help Holdings, 2018). However, each of the segments differs based on the price, quality, and types of goods and services. The research study also shows that 64. 2 million Americans or 6 out of 10 households in the United States own at least a pet (Entrepreneur Press & Kimball, 2008). Not all of the households have employed a pet stroller or the marabou-trimmed beds for their pets.
However, a significant amount of people but products to pamper their kitties and pooches. The target customers will include pet owners in the United States. 2 Mission Our mission is to offer goods and services for pets in the United States at a fair price with the intention of achieving efficiency and effectiveness. 3 Vision Our vision is to be the most customer-centric company in the pet industry in which customers can have comprehensive services, products, and information under one roof. 4 Products/Service The products and services to be offered include pet sitting and walking; dog training; pet grooming; pet treats and foods; and upscale pet products such as toys and clothes. The business will also offer comprehensive research information and entertainment avenues to its customers.
1 Defining the Research Problem a. Problem formulation Pet industry projections and trends show that pet industry is promising for the unforeseen future. However, there have been several trend taking shape in the industry. For instance, natural pet products are gaining popularity since people have become more conscious of sustaining and improving the health of their pets. Pet owners are increasingly growing negative attitude towards harmful materials including synthetic chemicals. b. Aim of the Current Market Research The market research aims to determine the suitability of the products and services to be offered in the pet industry in the United States for development into a business proposal. 2 Design of the Market Research The main styles of market research are causal, qualitative, quantitative, descriptive and exploratory research design.
Exploratory research was conducted to identify the products and services that are suitable for the development of the business proposal. The exploratory research was also conducted to identify the market gap while market accessibility will also be verified. Statistical techniques were used whenever appropriate. Similarly, inferences made, plots and graphs will be used appropriately. 5 Formulation of Findings The market research helped access the comprehensive information in the market. Some of the statistics that were collected include competition, products, and customers in the pet care industry. It also helped determine the suitable products and services in the market. 2 Market Research to Identify Business Opportunity 3. 1 Exploratory Research The pet industry is steadily growing in the United States. American Pet Products Association argue that 50 percent of the Millennials are practicing pet ownership (Arenofsky, 2017).
In the United States, the second fastest growing ethnic group is Hispanics. They are second to Asians. The 2008 recessions also saw some pet owners minimizing their visits to the veterinarians where they can get information on pet insurance. Furthermore, the pet owners fear that they will lose the sense of ownership of their pets to the insurance companies. That is, they fear the insurance companies will make all the health and medical decisions regarding their pets. The pet industry in the United States has been experiencing steady growth when it comes to spending. Figure 2 shows the total expenditure on the pets in the United States. It is also predicted that as Millennials join the industry, the high margin accessories are more likely to be bought for the pets courtesy of the photos to share on social media.
Pet being considered part of the family also has made them trend. Today, most people travel with pets to vacation sites and work trips hence increasing the demand for pets training and socialization. Consequently, some of the services that are needed in the pet care industry include play dates, dog parks, sports outings, obedience shows, rally courses, training pets on agility, boarding facilities, and day care services (Arenofsky, 2017). Pet food covers the most significant portion of expenditure in the pet industry as shown in figure 3. Psychographic segmentation can be used to segment humanization trend. Anthropomorphism of pets has shaped the human behavior against pets. Psychographic or pet lifestyle segmentation shows absolute differences between owners of distinct pets such as dogs versus cats.
It shows the how the pet owners relate to their pets, their attitudes, and attachments (Woodruff). Pet owners can be categorized into three: pet people, pet parents, and pet owners. In fact, the generational differences determine how the pet owners spend on their pets. For instance, the baby boomers mainly spend money and time on their pet products which are bought from specialized pet stores. On the other hand, the millennial bargain for the pet products and services online. Again, they have a discriminating attitude on what is best for their pets. Demographic trends show that millennials are mainly the pet owners. The second and third generation of the Hispanics is continuing to make the most significant portion of the Hispanic population in the United States hence likely to increase the number of pet owners in the country significantly.
The pet owners in the urban regions are more likely to purchase pets that have special nutrition needs. They are also more likely to be concerned with pets when they are having food intolerances or allergies. Compared to their rural counterparts, the urban pet owners are more likely to prefer natural or organic food products over the standard brand products (Packaged Facts, 2018). There fear towards food contamination or product safety is higher than that of the rural or peri-urban pet owners. For instance, pet sitting and walking might need quite a little startup capital. However, pet training, grooming, and boarding will need an enormous upfront capital to cater for equipment, safety, and health certifications, and facilities (Scott, 2017). The pet industry in the United States can also be a risky business venture.
That is, the turnover of the customers can quickly happen in the industry since it might take some time to develop a loyal base of customers. Pet business, by nature, also need a long hour of work and a policy that supports on-call services (Scott, 2017). In 2019, the wearable market for the pets will be worth $2. 6 billion. 4 Description of Products and Services Products: Firstly, foods and treats are one of the products in the pet industry. A pet store can make much money through specializing in foods and treats for the pets. Most of the pet owners are ready to spend so much to ensure a healthy life for their pets. Again, specializing in a particular type of product enables the store to be relatively simple.
Therefore, it is essential to find the appropriate product mix and a suitable location and staff to keep the business afloat. Secondly, there is also a market for the upscale pet-products. The pet owners have been growing the urge to buy their pets goodies such as toys and clothes as a way of treating them as humans. The introduction of pets into Hollywood has seen upscale pet products gain popularity (Entrepreneur Press and Kimball, 2008). Some of the activities that the pet sitter do include giving the pet's medication, brushing them, feeding them, and giving them medications among others. A business focusing on such services should be able to do additional activities such as taking the trash out, watering plants, bringing in mails and newspapers and changing litter boxes to make the life of the customers easier.
In some cities such as New York, doing dog walking can be a great business but need to be accompanied by other services to attract more customers. Both dog walking and pet sitting are still developing as professions in the United States. Another service that is needed in the pet industry is dog training. A subtle touch of a groomer can make a pet healthier and happier. It can act as a reassurance to a frightened pet and calm a skittish one. Groomers also tend to be the first to realize medical issues that affect the pets including ear mites and skin conditions since they are in touch with the pet. Therefore, they allow similar issues to be brought to the veterinarian’s attention.
Apart from passion towards animals, a groomer needs adequate physical strength to lift the pets onto the grooming tubs and tables during grooming. The pet industry in the United States market also needs one to have experience in the pet business hence reducing the number of entrepreneurs that would like to venture into business. Furthermore, starting a business in the industry need a significant amount of capital thus limiting the number of new entrants (Michaux, Cadiat, & Probert, 2015). However, there have been foreign and new competitors entering the market while the companies that are dealing with the health of pets have managed to extend their businesses to accommodate accessories such as toys and clothing. The pet industry in the United States has a high bargaining power of the suppliers.
That is, the demand for the pet products and services is high while the suppliers are limited. For instance, there is a specialized dog shampoo and scissors on the market. However, one can use a conventional scissor and shampoo to conduct the same processes. Due to the economic conditions of the Millenials who own pets, they are willing to buy substitute services and products so long as they have a fair price (Entrepreneur Press and Kimball, 2008). Furthermore, it is most costly to switch the cost of the substitutes on the part of the seller but so cost-friendly on the part of the buyer. That is, the factors that affect the pet industry in the United States is the performance of the substitutes compared to the products and services that one is providing in the market.
Some of the benefits that pet owners experience include companionship thus reduction in loneliness. Pet also help reduce anxiety and fear among the owners. In some of the instances, pets such as dogs and ostriches can offer a sense of security. They can also improve the mood of their owners while they can also eliminate feelings of depression, irritability, sadness, and anger and enhance euphoric feelings. Furthermore, pet ownership fosters human interaction as people who own pets tend to develop a relationship with other pet owners thus boosting emotional wellbeing. However, the industry is likely to experience fierce competition since the large companies such as Petco will offer products at relatively low prices while the sole proprietors will offer affordable pet sitting and walking services.
There are some opportunities in the pet industry in the United States. Some of these opportunities include specialty, niche, and hands down offerings. Also, stores that sell foods of health benefits or made of special ingredients can have a huge market. Also, grooming services and training services are still not comprehensively untapped in the market (Entrepreneur Press and Kimball, 2008). The buyers are expected to pay in cash while the suppliers are expected to be paid a month in advance or immediately after sales. Table 1: Sales Forecast 3. 2 Project Funding The start-up funding will be US$300,000. It will cater for fixed and working capital. The proposed equity for the capital will include own sources, leasing and external investors. Therefore, it is expected that the business will start making its profit after the second year of operation as shown in figure 3.
Figure 3: Breakeven Chart 3. 6 Risk Evaluation Leasing of assets will significantly reduce the start-up capital needed to start the business. Since the business will be informed a company, the shareholders will be protected by its limited liability nature. 6 Resource Requirement Evaluation The promoters of the business plan have some resources. Organizationally, the business promoters do not have pet business relations but know some business suppliers and buyers. The promoters do not have a product that needs intellectual property rights but is in the process of designing recipes that will be purely natural. There will be a need for public liability insurance for the business and government support or approvals such as licenses. Chapter 4: Strategic Analysis and Business Model 4. 1 Strategic Analysis of the Business Idea Value Chain and SWOT A pet business, just as any other business needs a gap in the market.
Secondly, employees that have significant experience in pet grooming and other related services will mean that the business has better services than its competitors in the market. That is, skilled staff will minimize the time needed for capacity building and improve the satisfaction of the customers. Thirdly, the pet business allows for minimizing of the initial costs. In explanation, the market allows for a business model that minimizes the business costs. For instance, service such as mobile grooming need little equipment neither does it need rentals. It is essential to have a passion for pets to start a pet business, but it is also essential to gain experience. In explanation, the experience is a learning process in business and makes one a good entrepreneur.
Lastly, weak business links or networks in the industry might make the business struggle during the initial period of existence in the market. Strong links with business associates and suppliers are essential for a growing business. Therefore, it is essential to look for links for a starting business to ensure sustainability. As a result, other entrepreneurs that are interested in the pet business can grow under the brand. Just like any other business, pet business in the United States has some threats. Therefore, it is essential that an entrepreneur be joining a pet business to prepare for the worst in the industry. For instance, pet business might have stiff competition as more entrepreneurs join the industry (GroomArts, 2018). It might be hard to establish a new brand if the local market is already saturated.
High competition 2. Increased costs 3. Economic fluctuation 4. Sick days Strengths 1. Inadequate competition 2. The improved quality of products and services will be based on the employment of employing specialists and experienced individuals. The promoters will also invest in marketing to improve brand recognition. Networking will also be used to improve business links and enhance collaboration. Since there is a potential of stiff competition in some area of the market, the promoters aim to make the brand strong and capacity build the employees to cater for the small experience that they may be lacking. Furthermore, the business will be insured against economic turmoil even though the risk seems to be less comprehensive. Again, market penetration will increase the utilization by the existing customers through activities such as loyalty schemes.
Market development is a growth strategy in which the pet business will seek to sell its products and service to the new markets. This strategy will be approached in some ways: new geographical markets, new products packaging or dimensions, new channels of distribution, and transparent pricing policies to attract customers and develop new markets (Riley, 2015a). However, market development will be a riskier strategy compared to market penetration since it targets new markets (Spender, 2014). The pet business also might engage in product development which will entail introducing new products into the market that already exists. ’ The hard elements include strategy, structure, and systems while the soft ones are staff, style, skills, and shared values (Ravanfar, 2015). The elements make a network as shown in figure 5.
Figure 5: The McKinsey 7-S Framework Source: Mind Tools Content Team Each of the elements in the strategy has particular roles. For instance, the strategy is the plan put in place to build and maintain a competitive advantage based on the competition. The structure is the way the company is structured and the order of reporting or seniority (Ravanfar, 2015). Consequently, the model will help ensure that the organization is working correctly. 3 Balanced Scorecard The balanced scorecard is a metric of performance that will be used in strategic management to improve and identify several internal functions of the company and their external outcomes. It will help the organization monitor and evaluate its activities (Farooq & Hussain, 2011). Furthermore, the data collected will be used to make decisions in other activities of the business.
The balanced scorecard will be of great importance in the pet business. Figure 6: 4 Bowman’s Strategic Clock Source: Riley (2015b) Figure 6 shows the eight positions of the Bowman’s Strategic Clock. Position 1 is characterized by a low value and low price. It is not a position that a business will claim to be so competitive. At this position, the product is not differentiated, and the customers consider the product and service to be of very little value even though the price is low. It is the bargain basement strategy and calls for the business to have lower prices that no any other business can undercut. However, the products and services need to have loyalty and strong brand awareness to achieve the suitable added value and prices.
The fifth position is the focused differentiation strategy that aims to introduce the product in the market at the highest prices since the customers believe that they are of high value. The position is often easy to implement while working with the luxury brands that aim to achieve suitable prices through highly targeted distribution, promotion, and segmentation. The strategy can lead to significantly high profits if done successfully. However, only the best of brands and products can use the strategy sustainably for a long time. However, in most of the countries, monopolies are firmly regulated to prevent them from setting too high prices on their services and products. The last position is the loss of market share, and it is often associated with disaster in the competitive market.
It entails setting a standard and a middle-range price for a product or service that has a low perceived value. Consequently, they are less likely to win several customers since the buyers have additional better options. For instance, the customers can get a higher value of products and services for the same price in the market. In explanation, the model helps the business to develop its brand through both physical and virtual networks. It gives the business an opportunity to develop a reputation and brand name through the internet and physical presence. The internet also allows the starting business to develop their brands virtually without meeting the customers (Bahn & Fischer, 2003). The brick-and-clicks will also help the business improve its supplier networks.
The internet will give the business a wide range of suppliers and competitive pricing. The model can cause a business to have higher overhead charges compared to the conventional brick and mortar or dot-com enterprise since both the internet presence and physical space has to be maintained (Bahn & Fischer, 2003). If the business had to focus on the internet only, it means that it would have catered for physical space. However, for the model, both the website and the store has to be maintained. Chapter 5: Business Plan 5. 1 Business Plan Overview 5. Additional activities that the pet sitter and walker will engage in will include taking the trash out, watering plants, bringing in mails and newspapers and changing litter boxes to make the life of the customers easier.
Also, the business will offer dog training services that will be conducted by professionals. It will entail training the pets and their owners hence a comprehensive process. Also, it will involve talking to the pets kindly and dealing with them patiently then reinforcing their behavior. After which, the same will be done to their owners. , Certification Council for Pet Dog Trainers, Association of Companion Animal Behavior Counselors, and Animal Behavior College. There are several professional organization in the pet industry in the United States such as American Kennel Club and American Humane Association. The professionals in the business will be encouraged to be members of these professional bodies. The business will adhere to the legal articles dealing with pets including the Article 3-D Sales of Dogs and Cats of the New York State.
3 Financial Requirements The start-up funding will be US$300,000. 4 Risk Issues Leasing of assets will significantly reduce the start-up capital needed to start the business. Since the business will be informed a company, the shareholders will be protected by its limited liability nature. 5 Marketing Matters The pet company will target both the all kinds of pet owners from high-end to low-end. The general pet industry is valued at $60 billion in the United States (Scott, 2017). However, technology has managed to change the dynamics in the industry through allowing the local businesses to engage in activities such as pet training, grooming, sitting, and boarding with the intention of reaching customers. The pet industry in the United States can also be a risky business venture.
That is, the turnover of the customers can quickly happen in the industry since it might take some time to develop a loyal base of customers. Pet business, by nature, also need a long hour of work and a policy that supports on-call services (Scott, 2017). It needs the entrepreneur to be available during the holidays and weekends when the owners of the pets might be going for vacations or busy conducting other activities. The pet industry in the United States is still in the initial growing stages hence less competition. 6 Organizational Feasibility Pet is always associated with positive impact towards the psychological well-being of humans. Therefore, any business that aims to better the health of pets aims to improve the lives of humans.
Again, human-animal bond has for main elements. These are constancy, kinship, intimacy, and safety (Flynn, 2008). Pets offer great social support to their owners that in turn improve the physiological and psychological health. Baby boomers prefer pets over children hence pampering them. However, pet spending peaks when the owners are at the ages of 55 years to 64 years (Entrepreneur Press and Kimball, 2008). Millenials consider the pets to be more humans than animals hence making loyal customers in the industry. The revenue in the pet industry has been steadily growing even during moments of economic turmoil. Therefore, the economic strength that the United States is currently enjoying will continue to boost the economic status of the industry (Entrepreneur Press and Kimball, 2008). 7 Overall Resource Sufficiency The promoters of the business plan have some resources.
Even though some of the resources are not yet available for the promoters, plan for accessing them is underway. Financially, the promoters aim to get about 50 percent of the initial capital from personal savings, family, and friends. The promoters aim to get the rest of the amount through partnership and loans. Technically, the promoters do not have the equipment needed to run the business apart from the internet and personal computers. 2 Proposed Plan of Action 5. 1 Action Plan Task No. Description Duration in Weeks Dependency 1. Market Survey and Feasibility 2 None 2. Funds Arrangement 3 1 3. Business Strategy, On Going Refinements, and Innovation 5. 3 Discussion of Critical Success/ Failure Factors There are so many factors that can make a business succeed or fail. Firstly, planning is an essential element in business.
Long-term and short-term planning determines the success of a business in the long or short period. Secondly, leadership is vital in business. Management is also critical to the business. Poor management makes the business fail and entails actions that show low trust among colleagues, working minus systems or standards, inadequate feedback, and poor communication. Inadequate capital can also make a business fail since it shows that the business might not be able to engage on its financial commitments such as paying loans and bills. Inadequate capital makes it impossible to expand the business and stop daily operations. Again, premature scaling can affect business negatively. Startups success is based on the ability of the entrepreneur to make suitable adjustments and the business to pivot quickly.
Many people also tend to use business funds for personal use hence making them fail. Other factors that can affect the business include overexpansion, macroeconomic factors, poor succession plan, and having a wrong business partner. Appendices Profit and Loss Statement Years 0 1 2 3 4 5 Sales 300000 330000 363000 399300 439230 COG (50%) 150000 165000 181500 199650 219615 Gross Profit 150000 165000 181500 199650 219615 Wages&Salaries 50000 51500 53045 54636. 36 General Expenses 60000 61800 63654 65563. sagepub. com/sbr-1863-102160-2772364/20170227/the-pet- industry Bahn, D. L. , & Fischer, P. P. P. Social creatures: A human and animal studies reader. New York: Lantern Books. GroomArts (2018). Starting a dog grooming business. , & Allison, M. Evaluation of a novel dog adoption program in two US communities. PloS one, 9(3), e91959. Niazi, B. R. com/Pet-Population- Ownership-10858348/ Ravanfar, M. M. Analyzing Organizational Structure based on 7s model of McKinsey. Global Journal of Management And Business Research.
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