Executive Summary
Pet Store will enhance the quality of life of the pets by offering them the food and care services of heath, which are best in the business. All the care plans will be custom made, according to the requirements and needs of the clients. Our home care aides, and companions are trained to provide pets care and assistance with the activities of daily living.
The prime attraction of our service is that we will be reaching out to pet owners, facilitating our customers at the outdoor parts in Aberdeen where pet-owners need us the most; thus adding value to their quality leisure time.
Our goal is to provide home help to residents of Aberdeen, Scotland, the United Kingdom (UK), and creating the best service based operation, which can exceed the customer's expectations, and to increase business profits by 25% per annum.
Financial Summary
Introduction
Planning in terms of business and organizations are always effective from the viewpoint of an organization, and effective actions should have been taken by the companies accordingly to protect their rights in an effective manner. Planning is the foremost part of the field of management, and there are some other elements as well that deem significant, known as organizing, controlling and leading. Planning of the business requires an operational plan, a marketing plan and a perfect financial plan to analyze the level of investment on the initial outlay.
All of these things should have been managed in a perfect manner in an organization for their long term effectiveness and sustainability in particular. The financial mantra of the business should be kept in a perfect manner, as it could bring financial capability and effectiveness in the analysis. This plan is all about the making of a business plan of a Pet Store that provides food, care and washing services to the pets, especially dogs. All the data has been collected and manage in this project depends upon the entire planning of the business and its core effects.
Company Description
A clean pet is a healthy and happy pet; and this is what every pet lover wants. Pet Store is a startup venture, which offers a pet food and care services to the pets with special emphasize on the washing services of the pet’s focused around outdoor pet parks in Aberdeen, Scotland. People of Aberdeen, Scotland are especially known for their pet-friendly disposition; and the city, with around fifty-five outdoor pet parks in the metro area, has been currently ranked as the “#1 City for Pets”. Even if people set up appointments with pet groomers to clean and care their pets, they still have to carry their dirty pets in their cars to them causing great hassle. Amidst this problem, Pet Store has spotted a business opportunity; i.e. to provide services that produce a clean and healthy pet to take home from the park. It will provide and offer quality caregivers with flexible timings; along with other relevant products/equipment at reasonable prices for the residents of Aberdeen, Scotland, the United Kingdom (UK).
Industry Overview
The industry has great potential, as the need for home help services will continue to increase, with older people becoming the major share in the population. The majority of these people will require home based pet services. The average life expectancy is increasing; along with number of age-related diseases among the pets. Older generation will wish to retain their independence, by continuing to live in their own homes; rather than moving to a retirement or care home. Due to this factor, there is an increasing need for home pet care assistants to help these individuals.
Overview of Products and Services
Capital Needs
Pet Store is looking forward to initiate its operations in the Aberdeen, Scotland, and the United Kingdom (UK). For that purpose, there is a need for financial support in order to launch the operations. Since the management has planned to target a limited geographic market during the inception phase; so the investment amount required is £90,000. Management has planned to pay back the borrowed capital in five years time.
The Company and the Concept
Vision
Mission
We are a pet store which is serving Aberdeen citizens so that they can enjoy quality time exercising and socializing their pets in the parks without having to worry about the hassle of bringing back home a dirty and unhygienic pet or transporting it to health care specialist.
Competitive Advantage:
Our biggest competitive advantage is our low cost operations, which will help us keep our services affordable for our customers.
Challenges
Some of the challenges we are likely to face are:
- Determining and obtaining license in order to position the vans within the premises of the park
- Supplying the vans with the water and electricity needed to operate on location
- Establishment of similar mobile grooming companies
- Accelerating pressure of competition
Company Overview
Pet Store is a startup business which has been registered as Limited Liability Company. The business will be located at Aberdeen, Scotland, the United Kingdom (UK). The company aims to develop and maintain reputable business in the field of PET STORE that provides food, care and washing services to the pets. It will provide and offer quality caregivers with flexible timings; along with other relevant products/equipment at reasonable prices for the residents of Aberdeen, Scotland, the United Kingdom (UK). The company intends to apply for SBA / bank loan to meet the start-up costs; estimated fund required is £90,000. The website will be launched in the near future.
Products and Services
Driven by the rising demand of pet grooming and care services, Pet Store will start its operations with the major intentions to serve Aberdeen people to better enjoy their time with their pets at the outdoor parks.
It provides two different services pertaining to pet washing and health care. Pet Store offers food and washes services with self services or to hire the pet washer employee for this specific reason. Apart from that, it also offers nail trims for pets at reasonable and competitive price.
Mentioned below are the services which Pet Store is providing to its clients:
- Food, Care and Washing facility to the pet owners outside Aberdeen, Scotland, the UK.
Our charges will depend on the level and type of care; the range will be between £20-£30/hour. The device can be purchased, rented, or leased. They cost £200 to more than £1500.
Short Term Milestones
The objectives for the first year of operations include:
- Providing home help to residents of Aberdeen, Scotland, the United Kingdom (UK)
- Creating a service based operation whose primary goal is to exceed customer's expectations
- Increasing revenue by 2% each month
- Forming a business that is able to eventually survive off its own cash flow
- Developing a website that includes online booking capability
- Increasing traffic to the company's website by utilizing direct mail, targeted direct ad print and/or targeted ad inserts, word-of-mouth and other marketing strategies
- Building the business by offering additional services to military veterans to broaden the company's market share
Long Term Milestones
The objectives for the first three years of operation include:
- Increasing the number of clients served by 20% each year
- Increasing the business' profits by 25% each year
- Increasing the company's website traffic by 50% by year two
- Increasing the company's marketing budget by 30% by year two
- Market Size
The market size of the pet industry is quite substantial. Different pets of various species are kept by Americans.
Figure 1: Market Share of Pets Owned in U.K. 2011
Source: Britain’s pet products
The U.K. pet industry is huge and shows the loving nature of nation towards nature and animals. The ownership of dogs, as pet across U.K. is 3rd highest; after freshwater fish and cats. They amount to a share of 21% amongst other pets with a number of 78.2 million approximately.
- Market Growth
The pet care industry has observed growth in the past few years, even the recession period has not been able to restrain this industry.
Figure 2: Growth of U.K. Pet Care (except veterinary) services (£ Billions)
Source: US Census
The table illustrates that, in 2008, the total revenue generated by pet care industry was £2.4 billion. The growth observed in pet care market in 2009 was 4.16%, which served to drive up the revenue to £2.5 billion. Similarly, 2010 also proved to be a growth oriented one for this industry; with 8% rate of growth, which raised the level to £2.7 billion.
Factors that influence the growth of the pet care industry include patron concerns over their pet health and vulnerability towards viruses, family members getting affected due to pet disease or virus, government regulations and medical researches on pets etc
Business Strategies
Pet Store will enter in the market in order to challenge the existing players operating in Scotland, the United Kingdom (UK). The reason to choose this particular marketing strategy is to cater huge market of the state, where Pet keeping stance is growing rapidly and need for quality home care and food services are required. The growing need for customized services along with lack of supply from existing players and government agencies, offers a clear opportunity for us, to cater this gap and become one of the leading home health care service providers in Aberdeen, Scotland and adjacent counties. Despite the fact, there is an intense competition in the market, but these agencies failed to provide quality and tailor made solutions. There are not many market leaders in this sector.
- Different categories of segment will allow us to access additional clientele and revenue bases, adding to our financial stability. To generate maximum revenue by offering vast range of services to this underserved market of Pet Store.
- Build strong relations with community professionals
- Offer customized services, which will give best values to our clients
We would always be on the lookout for better approaches, to make our business competitive in the long run, by providing differentiated services.
The Business Environment
Industry Overview
- Porters Five Force Model:
Rivalry among Competitors (Medium)
The competition in Pet Store business in Aberdeen, Scotland, the UK is quite significant. There are many stations, providing these and other value added services as well, along with pet care.
So for that matter we will be required to make ourselves thoroughly competitive and have the required expertise in order to attract large number of customers.
Bargaining Power of Customers (High)
Customers have considerable power, in terms of different offerings available for various pet store services. Most importantly, they can care their pets at home. In addition to that, they would not want to spend large sum of money for this purpose, thus the power of bargain of the customers, have a definite edge over the company.
It is required that our strategy offers the best value and services that can help customers to feel the need of this service.
Bargaining Power of Suppliers (Medium)
There is not much supplier involvement in the operations of our business.
Threat of New Entrants
Entry Barriers (Low)
This is quite a concerning factor, as the companies have to face just few restrictions, before entering this business. New entrants, even with a small amount of investment and resources, can easily make a place in this sector.
Exit Barriers (Low)
At the same time, this factor is favorable for us. Since, companies are not required to fulfill too many legal obligations before diluting the company or services.
Threat of Substitute Products (Mediums)
There are not many substitute products that are available to Pet Store services. All such services fall in the category of pet care itself.
- SWOT Analysis
Strength
On-Location Exposure to Target Audience
One of the most significant strengths of our service lies inherent in our business model. This business model allows our services to be exposed to pet owners where they need our services the most, which minimizes the need for extensive advertising. This will help Pet Store to succeed, as customers can easily see and acquire the services offered by Pet Store on location.
Owner’s Experience & Enthusiasm for the Pets
The owner of this venture has been associated with pet care wash industry in Aberdeen, Scotland for over three years at management level. This renders her capable to manage her new business venture with exceptional leadership and organizational skills. She is herself a pet lover and owns three large pet lover and can identify with her target market and she has been in the same situation.
Low Operational Cost
Pet Store is among those companies, which are operating under low operational cost. Due to this, earning high net income would become possible.
Weaknesses
Lack of Brand Image & Identity
Opportunities
Perfect City for Operations
The company is operating in Aberdeen, Scotland which has been rated as one of the top cities for the pet owners.
No Effects of Recession
Pet Store has emerged as one of the most profitable and fastest growing industries, particularly in the United Kingdom. This industry remained unaffected during the financial crisis and kept the upward trend of growth.
Threats
Permission and Legal Restrictions of the Government
Pet Store business is indeed, one of the most lucrative forms of businesses in the entire United Kingdom. The association of permission and legal restrictions with the industry is so demanding and complex that it is extremely important to adhere with the standards, in order to sustain in this industry.
Accounting Techniques
The company has a physical location at Scotland, the United Kingdom (UK), therefore the company will use the accounting measures of International Financial Reporting Standards (IFRS). The balance sheet and financials of the company has been made with the same method.
The Market
The target market for the Pet Store is very specific, as the company only focuses on those individuals who have pets. Generally, middle and upper class people who could afford to have a pet with an attitude of taking good care of their pets would be targeted by us.
It is analyzed that pet care services are in the growing stage and are expected to increase rapidly in near future.
Factors that may influence our services are climate and public holidays. Though the climate of Aberdeen, Scotland is usually rainy but in extreme cold and hot weather, people might not go to the parks with their pets in order to prevent them from any disease.
- Market Potential Analysis
The consumer of the United Kingdom (UK) invested heavily in the pet care market, because they love their parents without any greed. The personal life style of the UK individuals along with the health and hygiene expectations are transferring now to pets and the market is too happy to cope up with the demands accordingly.
- Weight control becomes relevant as pets because it is one-third, one-fourth of cats and dogs in humans are considered to be overweight. Increasing awareness of pet obesity, prompting some targeted measures, and provide more opportunities for specific diet food for certain species and age.
- Dog owners are usually more sensitive to price than cat owners due to the higher volume of food, dog consumption, and through the purchase of various foods such as dry food more complete response. Complete dry dog food has grown four-fifths of the dog you want to use a significant user, similar to dry cat food
- Another way the brand is able to continue to grow sales by leveraging on pet parenting trends, 70 percent of pet owners, treat their pets as much care, they will be a child, with products such as greeting cards and other gifts.
- The impact pets have on the amount of the required type of accessories; cat owners need relatively few "family silver", when it comes to toys, the dog is the clear winner (68% of dog owners buy toys compared to 51 cat owners %). However, families with children under 10 years old offer to buy any pet accessories, not just the biggest motivation toys.
- Our Target Market
Pet Store is strategizing to focus on people having pets. People who are looking forward food stuff for their foods along with different care services are out primary market of focus.
Source: CLR search
Trends in U.K. Pet Industry
.
The Marketing Plan
Marketing Strategy
Since, we will be catering different segments of the huge market; so we will be building our brand and services strong and differentiated; that any of the competitors would not be able to pose a big threat. We are in the market where many service providers are offering, somewhat similar products, and in order to be different, we need strong branding, huge network of referrals and business identification in the market. We can be unique, only when we produce customized services and satisfy our client’s needs completely; like: custom made plans for each individual, personal contacts with pet food suppliers and care agencies, extra ordinary customer service, reliability and trust, high rate of customer satisfaction. We will closely watch our rivals and always come up with better value services.
Our objectives as challenger within our target market include:
- Since, we are dealing in limited market segment of the industry therefore; we have to make sure that we have strong services to satisfy our clients rather than to offer vast range of services/products.
- Since, we are targeting one segment of the market, so we have to remain competitive by defending our small target segment and offering our customers differentiated services along with good value.
Product Strategy
Pet Store, through its flank attack strategy will be looking to offer a complete package of high standard pet food and care services. We are competing in high competition market, so we need to compete well for our market share. Management intention would be to remain competitive and profitable while focusing on customer satisfaction; instead of just giving them services. We as business strategist have planned to deliver our services in the most adaptable manner and right according to the need of our clients. Therefore, we are adapting strategy that is a blend of attack and defense. We will not attack directly on competitors, but we will promote awareness and build links with professionals for recommendation.
Pricing Strategy
The pricing strategy adopted by Pet Store Services is competitive pricing. The reason for choosing this particular strategy is that there are already numbers of companies, which exist in this business. This strategy will help us to ensure a reasonable profit, after deducting the expenses and will allow us to grow and prosper.
Pricing Strategy Model:
Promotion and Outreach Strategies
There are selected mediums, which Pet Store has opted to pursue in order to advertise. All the practices inherited will help the business in creating awareness in public, and influencing them to utilize our services for their needs and satisfaction. We will focus on pull strategy through direct and indirect channels.
Offline:
Magazines
The company will use magazines for publishing the features and benefits of our services and products.
Newspaper
Pet Store Services is strategizing to use newspaper facility to promote its services in potential customers. This particular medium would be worthwhile, as far as a new entity is concerned and the company will certainly get benefit from this.
Direct Mail
Direct mail is yet another important offline medium, which will be used by Pet store in order to promote its services. The company will directly mail the services newsletters at the door steps of the targeted customers.
Online
Website
Pet Store is planning to buy a website from its start up expense. The company will then use this website to give information regarding the services and products on offer.
Social Media Marketing
This is another very significant medium. We will be promoting our name on Face book, Twitter, and YouTube. Videos of products and services will be provided and uploaded on all such mediums, which will be as effective as T.V. advertisement.
Telephone Directories
Pet Store will use online telephone directories in order to promote its services through telemarketing.
Sales Strategy
Customers would be served through both online and offline mediums. In terms of e-commerce business model, the emphasis would be on the food items and care services of the pets. In traditional means of service delivery; both services and products would be focused. However, in this medium services of the company would be helpful in driving the revenue of products.
Distribution Strategy
Our place strategy will comprise both offline and online mediums. These will be constituted over zero level channels; with clients located in the above mentioned cities. Place strategy will have the prime value in our marketing mix strategy, since it is our core operation.
Offline Place Strategy
In terms of physical existence, we will target the old and handicapped people through different mediums.
Customer Service
The best part, as far as customer service is concerned; is that all the end services will be provided at the door step of the client. Client has motley options available to pay against rendering the services of the company or buying the products including cash, debit, credit cards and checks. In order to entertain the clients in a perfect manner, the company also accepts returns, but only for the new units. It accepts all the responsibilities of repairing and replacing an equipment in the given time period which is one of the greatest provisions in customer orientation.
Risk Analysis
Pet Store is a company that provides full pet services to its consumers include food and washing facility. There are several systematic and non systematic risks involved with respect to our operational activities. Following are risk factors associated with our business:
External Risk Factors:
Legal risks:
In U.K., legal system is structured and there are many laws directly involved with homecare services. The changes in these laws may affect the business. To negate such risks there should be a clear understanding of these regulations. Policies should be made accordingly, which can beneficial as well as predict any uncertainty.
Other risks:
This includes natural disasters, like, flood, earthquakes, etc. We cannot predict or stop such events; but we can make sure our records are safe and backup data is secured.
Financials
Balance Sheet
Pro Forma Cash Flow Statements
Capital Budgeting with 10% WACC
Capital Requirement and Use of Funds
Repayments of Debts
Management will borrow £ 90,000 to finance all company operations and intends to pay off the debt within the time period of 5 year. Company will take the specified loan on 6% interest rate.
Exit Strategy
The owner of Pet Store plans to exit this venture, after making it a flourishing business that could be sold for a substantial profit; by means of an IPO or to private equity investors. Though, it is the owners' plan to continue with this business until she is willing to retire or to sell it and start another one. If the business is generating solid cash flow, owner might remain in this business and receive dividends on yearly basis.
Assumptions
Following are the number of customer the company will have in the 1st year. From 1st to last month
Following is average payment made by customer in the 1st year. From 1st to last month
The personal mark up is 11%
Each month has 20 days of customer consumption
Each day has 4 hours of customer consumption
Following are the start up expenses of fees and licenses for the year 1
Following are the yearly operating expenses for the 1st year which are expected to grow @ 10% yearly
Depreciation rate on fixed assets is 10% yearly
The Company has taken £ 90,000 loan from bank @ 10% interest
The tax on operating income is 30%
Following are the assets purchased by the company on the first year starting
The loan repayment is 15% of initial amount £13,500 each year
References
Storage Clover Sites, accessed on 25th November, 2014, http://storage.cloversites.com/immanuelstaffing/documents/Newsletter_3.pdf
Storage Clover Sites, accessed on 25th November, 2014, http://storage.cloversites.com/immanuelstaffing/documents/Newsletter_3.pdf
Agein Place Tech, accessed on 25th November, 2014,
http://www.ageinplacetech.com/blog/how-do-home-care-agencies-use-technology
Private Duty Home Care, accessed on 25th November, 2014, http://www.privatedutyhomecare.org/downloads/NPDA-FactSheet.pdf
Private Duty Home Care, accessed on 9th October 2012, http://www.privatedutyhomecare.org/downloads/NPDA-FactSheet.pdf
UK Census, accessed 25th November, 2014,
http://www.census.gov/econ/nonemployer/
Freedonia group, accessed 25th November, 2014,
http://www.freedoniagroup.com/Home-Medical-Equipment.html
Freedonia group, accessed 25th November, 2014,
http://www.freedoniagroup.com/brochure/24xx/2447smwe.pdf
CLR search, accessed 25th November, 2014,
http://www.clrsearch.com/Atlanta_Demographics/GA/Household-Income
CLR search, accessed 25th November, 2014,
http://www.clrsearch.com/Atlanta_Demographics/GA/Population-by-Age